Bolivia Ruling class aims for destabilisation to overturn progressive government

On 10 August Evo Morales will face a recall referendum on his Bolivian presidency. Should he fail to get the same level of support as when he was elected in December 2005 (54%), he will stand down for fresh elections. The same will apply to the governors of the nine departments of the country. The referendum follows determined resistance by the Bolivian ruling class to the reforms Morales has introduced since he was elected as the first indigenous president of the country. This came to a head with an ‘autonomy referendum’ in Santa Cruz department on 4 May which the ruling class claimed as a victory since 79% of the votes were in favour of autonomy.  However, the poor of Santa Cruz city rioted in protest and burned ballot boxes, and 39% of the people abstained compared to 16% in the 2005 elections. The Bolivian people face a tremendous challenge, the outcome of which could have a profound effect on progressive developments throughout Latin America. As Hugo Chavez has said: ‘to hit Bolivia is to hit South America’s geopolitical heart’. Robert Clough reports.

Backed by the US and Britain, the Bolivian ruling class has been mobilising opposition to Morales in its Santa Cruz stronghold. Wealthy landowners and agribusiness representatives orchestrated the referendum which the National Election Court deemed illegal since it involved only Santa Cruz residents. In reality the referendum was not about autonomy but separation. The statutes that were put to the vote would allow the department to:

From the 1950s, successive Bolivian governments and military dictatorships funnelled money into Santa Cruz, supporting the development of vast latifundia devoted to soya bean production and cattle ranching. Bolivia’s Institute of Agrarian Reform (INRA) says that 400 individuals own 70% of the country’s productive land, whilst in Santa Cruz department, 25 landowners hold 22m hectares, 60% of its entire territory. These shameful figures are backed by a 2005 UN report which calculated that 100 families controlled over 20 million hectares of land.

Systematic settlement of Santa Cruz started after the Second World War with pro-Hitler Ustashi Croats driven out of socialist Yugoslavia and Nazis fleeing a defeated Germany. They created a virulently racist culture which expresses itself in a violent hatred of indigenous people. During the Hugo Banzer military dictatorship of the 1970s, vast tracts of lands, some exceeding 100,000 hectares, were handed over to political cronies regardless of whether indigenous people occupied them or not. Much of this land was left idle; where it was worked, landowners established a system of indentured labour which continues today. Banzer even offered 800,000 hectares of land to white Rhodesian and South African farmers, his Immigration Secretary telling them ‘you will certainly find our Indians no more stupid or lazy than [your] own blacks’. Banzer also protected the development of the Bolivian cocaine trade; drug wealth flooded into Santa Cruz, financing a coup in 1980 and causing a US State Department official to declare ‘for the first time the mafia has bought itself a government’. The discovery of large gas reserves in Santa Cruz and neighbouring Tarija departments has augmented the wealth of the eastern part of the country even further.

The Morales government
What upsets the Santa Cruz ruling class is that Morales has delivered on some of his promises and it has a real fear that, however cautious the land reform proposals might be, they will pose a real threat to its wealth and power. In May 2006 Morales announced the nationalisation of Bolivia’s gas and oil reserves, forcing the multinationals to renegotiate their contracts with much higher tax and royalty rates – 82% rather than the 18% set following the 1997 privatisation. Under the contracts negotiated in 1997, multinationals had been paying around $150m a year in tax and royalties ($180m in 2005); in 2007 this increased to $1.93bn, equivalent to more than 10% of GNP. Some of the extra revenue has been spent on providing a pension to the over-60s for the first time, despite determined opposition from the ruling class majority in the Senate.

Bolivia has joined the Bolivarian Alternative for the Americas. In March 2006 it implemented a literacy campaign with Cuban materials and financed by Venezuela which by this April had taught 77% of the country’s illiterate population to read and write. The plan is to become the third Latin American country after Cuba and Venezuela to be illiteracy-free and to achieve this target by November this year. Cuban doctors have also treated tens of thousands suffering from treatable eye diseases.

The Morales government has also sought to restrict US economic and political domination in a number of ways. It has withdrawn from the US-run School of the Americas, the infamous torture school now called the Western Hemisphere Institute for Security Co-operation. It opposed a free trade agreement with the US and in March 2006 refused to renew its standby agreement with the IMF which had been responsible for imposing the neo-liberal policies that devastated the country in the 1980s and 1990s. It also withdrew from the World Bank’s International Centre for Settlement of Investment Disputes, an arbitration system characterised by its lack of transparency and bias toward multinationals. On 14 May 2008 the government accused US multinational Hewlett Packard of failing to pay $12m import duties on computers brought into the country – a standard practice of multinationals.

The Morales land reform programme followed a series of decrees in May 2006. In its first year, it distributed six million hectares to landless peasants. It aims to award 20 million hectares, a fifth of the nation’s total land area, over a five-year period, to those with insufficient land or none at all – some 2.5 million farmers out of a total population of eight million. Morales proclaimed that, ‘the goal of this agrarian revolution is to break up oligarchic land holdings and distribute and redistribute land to those who need it’. So far redistributed land has been state-owned, but more recently officials from the INRA moved into Cordillera in the south of Santa Cruz to validate land titles and met armed resistance from landowners and their hirelings. The decrees allow confiscation of estates where INRA determines that there is any form of indebted labour, common in Cordillera.

Politically the most important measure of the government has been the establishment of a Constituent Assembly. Convened in August 2006, its purpose has been to refound Bolivia as a state that represents the indigenous majority rather than the privileged white and mestizo minority. Its deliberations have been fiercely obstructed by representatives of ruling class parties such as the right-wing PODEMOS, led by former president Jorge Quiroga, a one-time Banzer ally, which had a substantial minority of the delegates. In one incident, crowds of racists assaulted indigenous delegates including the president. The assembly finally approved a new constitution in December 2007, exploiting a boycott by the opposition to ensure that its statutes were approved by the necessary two-thirds majority. Plans to put it to the vote in May were suspended when the National Electoral Court ruled that there was not enough time to prepare the vote. The referendum would have given the Bolivian people the choice as to whether to limit landholdings to 5,000 or 10,000 hectares.

What will happen next?
In June three other resource-rich departments in the east plan to hold equally illegal autonomy votes: Beni and Pando on 1 June and Tarija on 22 June. Landowners in the three departments are equally opposed to land reforms which would break up their holdings and hand them over to the ‘Indians’ they so despise. Leading the opposition, however, is Santa Cruz governor Ruben Costas, one-time head of the Santa Cruz Civic Committee, who owns 15,000 hectares of land. The current head of the Committee, Branko Marinkovic, is the son of an Ustashi Croat. Marinkovic is known to own 3,000 hectares together with a vegetable oil factory, whilst his sisters hold a further 14,000 hectares seized illegally from the Guarayo people. Some estimate the entire Marinkovic holding at 90,000 hectares – more than 300 square miles.

Behind these racists stand the US and Britain. In September 2006, the Bush administration appointed Philip Goldberg as US ambassador to Bolivia. Goldberg served in Bosnia between 1994 and 1996 and was Chief of Staff to the US delegation at the 1995 Dayton conference which agreed the break-up of Yugoslavia. From 2004 he was Chief of Mission in Kosovo and helped engineer Kosovo’s separation from Serbia. He is also a member of the Latin American International Centre for Balkanisation (CONFILAR) whose headquarters are in Santa Cruz. The clear reason for his appointment is to promote a strategy of Balkanisation to undermine progressive developments in Latin America. He is being helped by grants from the likes of the National Endowment for Democracy and USAID totalling $120m since 2005. The US Embassy has sent a letter to all US citizens in Bolivia asking them to inform on the activities of Cubans and Venezuelans in Bolivia, and to report any government action against reactionary protestors. Meanwhile the Bolivian Ambassador to Britain, Maria Souviron, has complained that the Foreign Office recently organised a meeting in Parliament with Morales’ opponents.

However, the imperialists are not having everything their own way. Cuba, Venezuela and Nicaragua have made it clear that they stand with Morales. Meeting in emergency session on 3 May, the Organisation of American States also agreed a declaration of support for the Morales government which opposed any attempt to ‘disrupt’ Bolivia’s territorial integrity. Even the Bolivian army has weighed in: General Luis Trigo Antelo, the Bolivian Armed Forces’ commander in chief, has warned Santa Cruz and the other departments seeking autonomy that the army will ‘not allow separatism’. Meanwhile Morales has continued with the nationalisation programme. On 1 May, he announced that the Bolivian government would nationalise the local subsidiary of British Petroleum and two other companies: Ashmore Energy International (in which Marinkovic was a large shareholder) and Compañía Logística de Hidrocaburos Boliviana. That same day he also announced the nationalisation of Entel, the largest telecommunications company in Bolivia, despite threats from its Italian owners who are now taking the Bolivian government to the World Bank.

Crucially, however, it is the masses that will decide, as they did in the Cochabamba Water War of 2000 and the Gas Wars of 2003 and 2005. On the day of the referendum indigenous working class and poor from the huge Plan 3000 slum in Santa Cruz city burned ballot boxes and fought the neo-fascist Union of Santa Cruz Youth. The same day a massive demonstration took place in Cochabamba as up to half a million people showed the depth of opposition to the ruling class manoeuvres. Cochabamba’s governor, Manfred Reyes, who was driven out of the city in December 2006 for supporting autonomy, remains unable to return from his Santa Cruz refuge.

Although the Bolivian economy is expanding and living standards are improving for many, the ruling class is likely to create food shortages and economic disruption to promote a climate of political instability. It is now down to the Bolivian anti-imperialist social movements which organise the mass of the rural and urban indigenous poor, and which have been undefeated for many years, to have the final say.

FRFI 203 June / July 2008