Bolivia: the challenges to state reform

Mariano Aguirre Isabel Moreno
14 September 2006

Bolivian society and its institutions are passing through a tense moment. The political triumph of Evo Morales and his Movimiento al Socialismo (MAS) party in the presidential and legislative elections of 18 December 2005 was followed by the 1 May announcement of the reclamation of the country's energy reserves from foreign ownership. The political as well as the electoral momentum was with the president.

Evo Morales, however, wants to change and not merely govern Bolivia; and to do that he needs to create the constitutional framework necessary for his movement's radical programmes and ideas to be implemented. This meant a second set of elections on 2 July 2006 to a new body: an asamblea constituyente (constituent assembly, based in the city of Sucre, the country's legal capital) which would spend a year drafting and arguing over a new constitution for the Bolivian state.

This is where things start to get more complicated for "Evo" and his colleagues. As in the legislative elections, the MAS won the largest number of seats in the constituent assembly, but not the two-thirds majority needed to pass its proposals. As a result, Morales's government has begun trying to change the rules so that a constitutional reform may be approved by a simple (50%-plus-one) majority.

Moreover, the government wants to invest the asamblea constituyente with powers of "origination", meaning that its decisions would in principle be prior to and above the existing legal framework of the state. In other words, the asamblea could modify the structure of the Bolivian state - even to the point of altering the balance of power between the executive, legislative, and judicial branches.

The opposition has launched a hardline campaign against this governmental initiative, and has even gone so far as to ask for protection from the Organisation of American States (OAS) from what it calls an "auto-coup d'état". It has also highlighted the effects of the 1 May nationalisation of energy resources on the state oil-and-gas company YPFB, some of whose officials chosen by the president himself have been accused of crimes.

How will these tensions and arguments develop, and will Evo Morales be able to achieve the comprehensive reform of Bolivia's state structures that he seeks? A recent visit to Bolivia and discussions with several of the leading actors in the reform process, gave us an insight into the scale of the MAS project and the obstacles in its path.

Mariano Aguirre is a journalist and writer on international relations. He is co-director of the peace & security and human-rights programmes of the Fundación para las Relaciones Internacionales y el Dialogo Exterior (Fride) in Madrid

Isabel Moreno is researcher in the peace & security programme of Fride in Madrid

Among Mariano Aguirre's articles on openDemocracy:

"America underneath New York"
(November 2004)

"The many cities of Buenos Aires" (February 2005)

"Exporting democracy, revising torture: the complex missions of Michael Ignatieff"
(July 2005)

"The Hurricane and the Empire"
(September 2005)

"Haiti: living on the edge"
(February 2006)

"Bush's security strategy: defend the nation, change the world" (March 2006)

"Bolivia: the challenges to state reform" (15 September 2006) – with Isabel Moreno

A claim of right

On 2 July 2006, the Bolivian people voted on two key questions of the reform project proposed by the MAS: who will be responsible for drafting the new constitution, and whether the country will be organised from the centre via a system of regional departments.

The new government's failure to win an absolute majority opened the door to complex negotiations about the state and power that will take at least a year to resolve. At the same time, both questions highlight a series of problems which affect the structure of the Bolivian state itself; in particular, its democratic capacity to carry out a reform which could facilitate the construction of a more equal society that could combat endemic poverty and accommodate Bolivia's different identities (ethnic, linguistic, social and regional).

These issues are of more than local significance. For at least three reasons, Bolivia is a country at the centre of international attention.

First, Bolivia's huge hydrocarbon reserves make it of exceptional geo-strategic interest. The 1 May reform made Bolivia an integral element of the global debate about oil and gas prices, the exhaustion of future supply and the political use of these resources, one that reverberates from Venezuela to Iran, Angola to Saudi Arabia.

Second, the impact of the nationalisation on Brazil and Argentina is an example of how (in Latin America especially, but also more widely) the political programme of Evo Morales combines resource-extraction, attention to the rights of the indigenous people, and attempt to reform land ownership, in ways that could have much wider appeal.

Third, as a country of extensive coca production led now by a populist left-winger, Bolivia has attracted close political attention from the United States.

Decide, then act

The MAS party won the general elections in December 2005 on a programme that expressed the different views of the groups which compose the MAS coalition and was to a great extent defined by the political struggles of the last decade: the "water wars" in Cochabamba and elsewhere, and rejection of the neo-liberal economic policies of the 1990s. The latter was especially important: for a huge number of Bolivians, neo-liberalism brought no benefit, and for a majority of the population the very words "state", "political corruption" and "neo-liberalism" came to mean the same thing.

Thus, the Morales government was elected (as one social-movement activist put it) "to put into practice what other governments had decided or accepted". This was, in essence, a response to the failure of the series of "governability pacts" agreed during the turbulent presidency of Carlos Mesa, which had three components:

  • call a binding referendum about how energy resources should be used
  • reform the hydrocarbons law of 1996 to re-establish national sovereignty over energy sources
  • convene a constituent assembly to enhance the construction of an inclusive and more democratic state. 

The political failure to put these pacts into practice led to a loss of legitimacy among the parties which had promoted this economic model, such as Poder Democrático Social (Podemos, the party led by former president Jorge "Tuto" Quiroga. For a large section of voters, Podemos came to personify the traditional political party-game in which a series of formations take turns at being in power and sharing out posts: the so-called "democracy by agreement". In this sense, the triumph of the MAS represented more of a rupture with a stagnant democracy than a threat to an operating one.

The programme of the MAS focused on securing greater control of natural resources and a reform of the constitution to give more power to the indigenous and poorer sectors, promote agricultural reform and hold a referendum over autonomy for the regions. In addition, the MAS government promised to look for new ways of dealing with the issue of coca production for illegal use. In his first nine months in office, Morales has made progress in every one of these areas,   engendering support and hostility,  inside and outside Bolivia alike.

In addition to these political aspirations, the coalition led by Evo Morales embodies two elements of cultural-political identity. The first is Bolivian nationalism, a potent force in the history of the country from independence in 1825, and fuelled by lost wars and more powerful neighbours. Since the populist and modernising nationalist revolution of 1952, the "national" factor has been increasingly present even among the armed forces. 

Nationalism has been a force for unity as well as of difference: it served as vehicle for nation-building (as in many post-colonial societies) and it eliminated almost all references to ethnicity in a country where indigenous people are the majority, thus attempting to integrate the "natives" in worker-producer trade unions and demanding the end of inequality through class alliance.

The second is the indigenous factor. 60% of Bolivia's 8.6 million inhabitants are Amerindian; the indigenous communities have been marginalised by the political process and have suffered harsh exploitation since the colonial era; 62.7% of the population is poor (most of those indigenous); 26.5% live in extreme poverty.

The indigenous people have recently gained more institutional and judicial space, for example through the constitutional reform of 1994 (which recognises Bolivia as a multi-ethnic state) and through Article 171 of the constitution (which recognises collective rights). The so-called "people of the east" have a system of communal justice with established procedures, one that is secondary in relation to the state as a whole. Maria Teresa Zegada of the University Mayor of San Simón in Cochabamba says, however: "these formal gains have not had a real impact on the conditions of the people."

MAS obtained 54% of the votes against Podemos in the assembly elections, which translated into 134 of the assembly's 255 seats. Its victory represented the high turnout and active participation of the social movements that have proliferated in Bolivia in the last twenty years. From the 1980s, onwards movements of land-workers, coca-farmers, casual workers, trade unions in the energy sector and others began to substitute for the traditional trade unionism that had been formed by work in the mines.  Agriculture, mining, the exploitation of energy resources and construction are now the principal sectors of production. The most dynamic of these is the hydrocarbon sector, which is why the government has attached such importance to its control.

An important additional factor is that around 2 million Bolivians living outside the country, and members of the Bolivian diaspora community in the United States, Europe and other countries in Latin America has sent back $860 million in remittances to the homeland.

The assembly and its issues

In light of the foregoing, it can be understood that a constituent assembly represents the historic demand of a great part of Bolivian society. Now, for the first time in the country's history, the project is underway.

The MAS characterises the assembly as "an act of democratic revolution of the people to substitute the old structures after 180 years of an oligarchic regime" and "the materialisation of centuries of struggle by the people."

The debate is now focused on whether the assembly should be considered "originary" or "dependent". The MAS argues that for a true refoundation of the state, the assembly should have the power to act free from the constraints of the three traditional powers (legislative, executive, judiciary). Podemos is strongly opposed to this idea, to the point where it has threatened to abandon the assembly. The contrast is basically between a sovereign assembly with "originary" power, able to change the power structure and define issues such as control of natural resources, versus an assembly with power derived from the pre-existing state order, able only to reform the constitution.

In a country where 90% of productive land is controlled by 50,000 people, land ownership is one of the most essential and difficult questions to resolve. Here, there is mutual suspicion between Bolivians of east and west. The state can legally expropriate unused land (of which there are vast tracts in Bolivia), but mechanisms of corruption and inefficiency make legislation almost impossible to enforce; one indigenous leader explained to us that some indigenous people are bribed to testify that some of the land which lies fallow is supposedly being worked.

A state under discussion

The definitive text of the new constitution must be agreed by two-thirds of the members present in the assembly, and is scheduled to be voted on in a referendum on 6 August 2007. An absolute majority of votes will be needed to ratify it; if this is not achieved, the existing constitution will continue to apply. But even if it were passed, the weakness and complexity of the Bolivian state mean that the changes it embodied could not immediately be carried out.

The internal perceptions about the Bolivian state vary greatly: many consider it non-existent, many want to recreate it as an alliance of indigenous nations, and others consider that there is indeed a modern state which but needs a modern form of government. For part of the indigenous population "the state is the local council" - the closest power structure, and one that has come over the last decade to be run by indigenous representatives.  But the state is also, for the indigenous people, the communal land.

The structural conflict of the Bolivian state is, various experts agree, between the nation and the state. This conflict is itself marked by three contradictions: the State and the excluded classes, the state and ethnic groups, and the state and the regions.

The locality and the centre

Evo Morales leads a government in a hurry. This is the first popular, legitimate government in modern Bolivia with wide support.  It must take its chance to reform the state. 

Inside the MAS, there is a certain consensus in favour of having a strong government which can move the reforms forward - even if that means governing by decree. For some of the indigenous leaders and groups, Morales is too moderate and regarded as a figure who will betray the people's high expectations. At the same time, many fear (or predict) that Bolivia could have in the future a democratically-elected government that becomes authoritarian, if not actually a dictatorship.

In reality, the rules of the game do not allow the MAS to have a majority enough to impose its preferred model of the state.  Moreover, it is not clear what this model would be. Álvaro García Linera, Morales's vice-president, indicates that the government wants to create an "Andean capitalism"' which combines the three current socio-economic structures: family, communal and modern industrial. The idea is to "transfer a part of the surplus from the nationalised hydrocarbons to strengthen the role of the Andean and Amazonic forms of self-organisation, self-management and commercial development."

(Even before Morales's arrival in power, 5% of the profits from the sale of hydrocarbons went to the development of local communities, a factor which has given more power to local town halls and accelerated the tendency towards regional autonomy).

But this transfer of resources cannot be simple, especially when (as José Nogales, director of the daily newspaper La Voz in Cochabamba, explained to us) existing tax mechanisms oscillate between inefficiency and corruption, and "evasion techniques" are a fine art. 80% of Bolivians pay no taxes - some because they are poor, others because they are rich, and in many cases because there is no state structure to make them do it. The informal economy constitutes about 70% of GNP, which makes tax collection even more complicated.

The regional question

Alongside the constituent assembly elections, the national referendum on autonomy for regional departments revealed a key conflict underlying the Bolivian state. The results showed that a majority rejects the system of "autonomous departments", but that four of these departments (Santa Cruz, Pando, Beni and Tarija) voted in favour. These form the "half moon" on the Bolivian map where an influential white and mestizo population in areas rich in resources seeks a high level of self-government (or even independence). 

A recent law makes the referendum's results binding on the constituent assembly. Thus, once the new constitution has been promulgated, the departments that supported autonomy will achieve their wish. This would imply an actual division between east and west in Bolivia, and the prospect reinforces already great uncertainty over the tense relationship between the "half moon" and the "highlands". In this sense, the autonomy referendum crystallised the image of "two Bolivias".

The model of autonomy under which the four "yes"-voting western departments will organise themselves is still to be designed.  But the leaders of these regions are resisting the claims by President Morales that the "no" vote at national level is more important.

The debate inside the MAS on the autonomy issue is not so polarised as the election campaign might suggest. True, the MAS campaigned for a "no" vote, but many members of the Morales government do understand and support a specific model of autonomy in the new Bolivia:  autonomy for the indigenous people of the country.

A visit to Bolivia under the current MAS government of Evo Morales leaves no doubt that the existence of "two Bolivias" within the same state structure does reflect the results of the popular vote and the leading sentiment of Bolivian society. The question now is how they are going to relate to each other and reach an essential agreement about the future of the country and the state they are destined to share. The constituent assembly raises this question in sharpest form. Even if the process of agreement slows Morales's project to refound Bolivia on a new constitutional basis, the goal of a strengthened democracy with wider social participation will surely make the efforts worthwhile.  

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