“While the poor don’t have food, the rich won’t have peace,” reads the graffiti scrawled onto the wall adjoining the dual carriageway that sweeps breathlessly from one of the world’s highest airports into Bolivia’s Andean city of La Paz.

In front of the graffiti lie six smashed-up tollbooths, destroyed by protestors who have marched almost daily in May 2005 the eleven kilometres from the impoverished city of El Alto towards the seat of government in the capital, La Paz.

Suddenly the traditional centre of power has been full of those excluded from power for centuries – indigenous women with swirling skirts and bowler-hats, Aymara men in deep-red ponchos with mouths bulging with coca leaves, rural farmers with weathered faces shaded by faded baseball caps, miners with sticks of dynamite ready to storm the congress building.

The resounding call by the largely indigenous protestors is for nationalisation of Bolivia’s gas reserves, currently controlled by six multinational companies, including British Gas and BP. Their march has profoundly shaken Bolivia’s political elite; late on 6 June, President Carlos Mesa offered his resignation – a decision yet to be accepted by congress, which meets in the comparative safety of the southern city of Sucre on 8 June to consider the political options (including early elections) that might defuse the crisis.

Iriaro, a miner, had traveled six hours to join protests in La Paz:

“People are suffering to get here as they have so little money. But I decided to come because we need to reclaim our natural resources. We have been robbed for centuries and our government is robbing us again.”

 

The prehistory of insurrection

The “gas war”, as it has become known, is the fightback against the exclusion of the majority of Bolivians from the country’s wealth.

Bolivia is the poorest country in Latin America, with two-thirds of its population living below the poverty line. But as nearly all Bolivians will tell you, this landlocked country stretching from Andean peaks to Amazonian jungle is immensely wealthy in natural resources. In oil and gas alone, it controls the second largest reserves in the subcontinent.

The seeds for the current conflict were sown in 1990 when the International Monetary Fund and donor governments persuaded the Bolivian government to privatise its gas and oil sector and lower taxes, promising increased income as a result of additional foreign investment.

Also on Latin America’s democratic and social struggles in openDemocracy:

Marco Aurélio Garcia, “Brazilian future” (July 2003)

Sergio Aguayu Quezada, “Mexican democracy in peril” (April 2005)

Guy Hedgecoe, “Losing Ecuador” (April 2005)

Ivan Briscoe, “Nèstor Kirchner’s Argentina: a journey from hell” (May 2005)

If you find this material valuable, please consider supporting openDemocracy by sending us a donation

In fact, government revenue fell – but the multinational energy firms raked in unprecedented profits, taking 58% of all the income from gas and oil in straight profits, making Bolivia one of the most lucrative operating countries in the world.

Moreover, multinational energy firms controlled both the internal and external prices as well as the use of gas. Much of it was exported cheaply to the companies’ own subsidiaries in adjoining countries. None of it was used to try and develop petrol and gas-based products that could help lift Bolivia out of poverty in the long-term.

For many Bolivians, the cheap sell-off of their resources was reminiscent of the Spaniards’ looting of its silver mines in Potosí during the 17th and 18th centuries which helped fuel Europe’s industrial development. Resentment grew.

When, in his second term as president, the enthusiastic free-market liberaliser Gonzalo Sánchez de Lozada announced a new contract to export gas to Chile in the autumn of 2003, the anger felt by millions of Bolivians exploded.

The gas war had begun, and more than sixty people died in the first wave of protests. Lozada fled the country, leaving his vice-president and successor Carlos Mesa to promise a new era including a referendum on the future use of Bolivia’s gas reserves.

The referendum duly took place, but in the eyes of the protestors it had several deficiencies: it was part-funded by the World Bank, its questions were ambiguous, and the key issue that animated the protestors who had initiated the gas war – the nationalisation of Bolivia’s gas reserves – went unasked.

This exclusion temporarily deflected but did not suppress popular anger. On 17 May 2005, the Bolivian congress passed a new “hydrocarbons law” which pleased nobody.

Multinational energy firms and the Bolivian government condemned it as “confiscatory” and said it would damage foreign investment. Indigenous groups, trade unions and other social movements – among which the “Movement toward Socialism” led by the indigenous leader Evo Morales was prominent – condemned the law for failing to return control to the state and the Bolivian people.

The law does increase taxes and re-establishes the national state firm, YFPB. However multinational energy firms remain in control of prices and are not required to consult with indigenous groups from whose lands they extract their wealth. Meanwhile the state gains little strategic control over the development of its own resources.

The continuing favourable environment for multinationals was perhaps best demonstrated when the Spanish oil firm Repsol quietly announced a few weeks after the bill passed that it would be increasing investment in Bolivia, despite months of threats to do the opposite.

A people against the tide

Meanwhile, Bolivia has entered its third consecutive week of protests since the law passed. La Paz has been continually full of protestors, cities across the country have seen marches, farmers throughout the country have blockaded roads. The country has been paralysed, which has its cost as small businesses suffer and much-needed tourism disappears.

However many Bolivians have a strong history of resistance which has often delivered results that have inspired alternative globalization activists across the world. Popular protests in Cochabamba over huge water rates increases in 2000 led to the expulsion of the US multinational, Bechtel. Earlier this year, street protests in La Paz’s adjoining city, El Alto led to the expulsion of another profiteering multinational water firm, Suez.

But the road to nationalisation of gas will undoubtedly be one of the hardest struggles to win. The Bolivian government could not afford to buy out the companies, so would have to confiscate the multinational companies assets in order to nationalise the industry. This would inevitably lead to howls of outrage worldwide and probable isolation of Bolivia by the international community.

Unlike Venezuela under Hugo Chávez, Bolivia is much more dependent on foreign aid and lacks the economic strength to go it alone. International solidarity with Bolivia is weak or non-existent. Faced with this, splits have not surprisingly emerged amongst the popular movements who are resisting the new “hydrocarbons law,” which may weaken the drive to nationalisation.

The reality is that the majority of Bolivians want to forge a path that goes against the tide of corporate globalisation. Within their own country, they are looking to reverse a small elite’s institutional lock on political and economic power for centuries.

In the words of Gilberto, a construction worker in El Alto:

“Those in power have ruled for themselves for too long, living in luxury whilst the majority of people live in misery. What you see on the streets are those who have suffered reclaiming what is theirs.”

 

Further reading:

Latin American Bureau; new report by John Crabtree
http://www.latinamericabureau.org/?lid=3121

Lanic, University of Texas; resources and links
http://lanic.utexas.edu/la/sa/bolivia/index.html

Reuters Foundation; Bolivia country profile and reports
http://www.alertnet.org/thefacts/countryprofiles/152623.htm