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Class, ethnic conflicts paralyze Bolivian reforms

JUNE | JULY 2008 Federations
b oli v ia
By Fran z X. Barri os Suve lza
hen socialist candidate Evo Morales became
the first indigenous president of Bolivia in
2006, with a mandate to bring about sweeping
change, there were expectations from
his supporters that he would do great things.
Bolivia is a society divided along economic
and ethnic lines. Morales’s supporters are also
indigenous, and are mostly economically underprivileged.
The challenge is significant. Bolivia is one of the poorest
countries in South America and the country of 9.2 million people
had a shopping list of expectations.
On one side, indigenous peoples, mostly in the mountainous
western regions, want improved democracy, a stronger
negotiating position with the multinational oil and gas companies
and a total reform of the constitution with a formal
recognition of indigenous rights. Indigenous Bolivians make
up as much as 70 per cent of the country’s population and are
Morales’s strongest supporters.
On the other side, wealthier Bolivians in the eastern lowlands,
mostly of Spanish and mixed descent, want the national
government in La Paz to agree to greater autonomy for their
Initially in early 2006, these two groups had an uneasy peace
under Morales’ leadership. But many of Morales’ supporters
wanted him to dismantle so-called “neo-liberalism,” the policy
of unfettered markets and small governments that do not interfere
with the flow of capital and goods. That is where the two
first collided after Morales nationalized the oil and gas sector in
May 2006.
In the east, which chafes under Morales’s rule, four out of
Bolivia’s nine regions wanted to block Morales from heavily taxing
their soy plantations and cattle ranches, and hoped,
through the process of devolution, to gain a larger share of their
natural gas revenues, which are now under Morales’ control.
The pro-Morales forces – led by his Movement Towards
Socialism party – want the wealth generated by those eastern
regions to raise the standard of living elsewhere in the country.
Class, ethnic conflicts
paralyze Bolivian reforms
President Morales dithers on decentralization
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
constitutional self-rule.
The five countries under study in this edition of the magazine
are at different points in the continuum between basic
decentralization and full-fledged devolution. None are facing
the imminent secession of any of their sub-national
Of the five, Japan is among the least devolved. The
Economist magazine recently commented that, “more than
any big rich democracy, Japan concentrates political power
and financial resources at the centre.”
However, earlier this year a government panel recommended
the quasi dismantling of the centrally governed
state that has existed since 1867. The proposal would limit the
central government to 16 areas including diplomacy, national
security and trade policy. Under the plan, regional governments
would also have responsibility for areas such as public
works and industrial promotion.
In Morocco the government is seeking to defuse the anger
of radical youth and put a halt to terrorist bombings that
shocked the country five years ago. Part of its strategy is to
give responsibility for social and economic development to
the local level.
In the South American countries, Colombia has provided
significant funding to fuel decentralization, but the reforms
do not come close to resembling devolution.
In Bolivia, populist President Evo Morales is fighting a losing
battle against sub-national regions in the east of the
country voting to transfer national fiscal powers to the
regions. For Morales, this decentralization is a power grab by
wealthy landowners and a means for them to duck their tax
burden. Morales wants that extra tax revenue to help the
poorer, largely indigenous 70 percent of the population.
Meanwhile, in Peru, decentralization has advanced in fits
and starts over the last 29 years. Martin Tanaka and Sofia Vera
of the Institute of Peruvian Studies, write that decentralization
in their country has been chaotic and thus far failed to
establish a coherent and orderly institutional framework for
providing government services to the people.
Franz X. Barrios Suvelza is a consultant with the UNDP in La Paz,
JUNE | JULY 2008 Federations
At first it looked as if both of these two irreconcilable goals
could be achieved. But neither the Morales forces nor the eastern
regions were prepared to compromise.
Autonomy advocates confront Morales
Unrest with the new president and his programs had been
brewing for some time in the east. In July 2006, Morales’ opponents
won a first round of referendums supporting the
principle of provincial autonomy in four regions in eastern
Bolivia. It served as a dress
rehearsal for the definitive
referendums soon to come
and a sharp warning to
Morales. The stage for the
autonomy movement was set
in motion back in December
2005 when, in the first democratic
regional elections since
1825, six of Bolivia’s nine
regions elected governors
from parties opposed to
Morales’s socialist party.
Time slips away
Meanwhile, while the eastern
seats were preparing for
additional referenda, time
was slipping away on Morales
and his bid to have a new
constitution adopted rapidly,
a constitution that he promised
would entrench political
and economic rights for his
indigenous supporters.
It took 18 months of frustrating
sessions of the Constituent Assembly to complete a draft
constitution. That constitution, written exclusively by the progovernment
majority and a few allies, was adopted amid
tumult. The referendum on the constitution, originally scheduled
for May 4, 2008, was put on hold by the government after
the electoral court held that the referendum could not be organized
in time for that date. No new date has yet been set.
In the constitutional negotiations, the constituent assembly’s
pro-Morales forces refused until the last minute to cede a
modicum of legislative powers to the regions in the new constitution.
The pro-government faction feared that allowing such
legislation would mean giving up political powers that they just
could not concede, and wrongly calculated that the demand for
autonomy was simply manoeuvring by the wealthy
In a last-minute effort by Vice President Alvaro Garcia to
reach agreement with the eastern factions, the final draft of the
constitution introduced legislative powers for the subnational
sphere – in what was a concession to the regions seeking greater
autonomy. But those powers were not deemed satisfactory by
the landowners. For their part, the pro-Morales forces inserted
into the draft constitution a variety of provisions such as autonomous
entities, as well as regional and indigenous ones, which
created a complex and potentially unmanageable network of
In an interview with the
BBC on Apr i l 24, 2008,
Morales accused his opponents
in the eastern regions
of really being interested in
money, not in devolution,
claiming that the more
wealthy easterners only
became interested in devolution
when they lost control of
the central government.
Losing control
“If we look at history, we see
that there have always been
demands for federalism
when the rich minority have
lost control of central government,
but then when they get
it back again, they forget all
about autonomy.”
The next clash between
the two forces took place on
May 4, 2008. The subnational
region of Santa Cruz held a
referendum, asking voters to approve a statute of autonomy
passed by the region’s legislature the previous December. The
referendum was approved by 85 per cent of the voters. Morales’
supporters had called upon people in Santa Cruz to boycott the
vote, but without much success.
In April, Morales had promised that the new constitution
would guarantee devolution of powers to the regions, according
to the BBC:
“But it will be autonomy for the people, not autonomy for the
rich elite in Santa Cruz.”
The next showdown will likely come right after the date is set
for the referendum to approve the draft constitution. The new
continued on page 22
The Bolivian autonomy
referendum of 2006
The question to voters was: “Do you agree, within the framework
of national unity, with giving the Constituent Assembly
the binding mandate to establish a regime of regional autonomy,
applicable immediately after the promulgation of the
new Political Constitution of the State in the regions where
this referendum has a majority, so that their authorities are
chosen directly by the citizens and receive from the National
Government executive authority, administrative power and
financial resources that the Political Constitution of the State
and the Laws grant them?” – from the referendum of July 2,
2006, in which the four eastern regions voted a solid “Yes.”
An indigenous woman votes in the referendum in May 2008. The proautonomy
forces in Santa Cruz won the vote.
REUTERS/Andres Stapf
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
JUNE | JULY 2008 Federations
Boli via [continued from pa ge 12]
constitution identifies the 36 indigenous people of Bolivia for
the first time in history, lists their languages as official languages
nationally, and requires each region to have at least two
official languages, one of which must be Spanish. Opposition
critics say that if the constitution is passed in its current form, it
will split Bolivia.
This chain of events and
the outcome hold several lessons
for Bolivians. The first is
that Morales was mistaken
when, in 2006, he mounted a
fierce campaign for the No
side in the autonomy referendum.
This act galvanized
voters against him in the four
eastern regions, where the proautonomy
forces would later
win. Morales unwisely campaigned
on the platform that
Bolivia’s only pressing issues
were greater control over its
natural resources and integrat
ion of i t s indi g enous
inhabitants into Bolivian society
and institutions. The
country, however, has other
challenges. One is regional
autonomy. Here Morales
made a crucial error. Not content
to pursue his strategy in
favour of indigenous and antineoliberal
policies, he went
further and dismissed the proautonomy
movement as an
expression of simple greed on
the part of the oligarchy – a
few wealthy families.
Compromise needed
The mistakes Morales made
arise from two different definitions of federalism. One is
Morales’ “cultural federalism” with economic power held
mostly by the central government. The other is a “federalism of
autonomy” of regions like Santa Cruz, which wants to keep all
the revenues from its natural resources. These two extremes
have led to an all-or-nothing struggle between Morales’ supporters
and the richer eastern regions.
Until the two sides acknowledge some validity in each other’s
goals, compromise will not be possible. This common
ground could lay the foundations for a new territorial model,
which is neither completely federal nor completely autonomous.
One way of implementing it could be an agreement on
equalization payments between the richer and poorer regions.
That may not be difficult to agree upon in principle. Where the
battle will play out is over what is to be equalized: government
services, perhaps including medical care and retirement, or the
standard of living?
Morales’s strongest argument against devolution is that it
would lead to a return of the latifundia, the system in early Latin
America that put large landowners in mansions and kept the
peasant farmers living in huts.
The opponents of the president are strongest in the region of
Santa Cruz, the largest of the four easternmost regions led by
the opposition. These four regions – Beni, Pando, Tarija and
Santa Cruz – are commonly called “the half moon” by Bolivians
because on the map, the outline of
the four regions resembles a crescent
The region of Santa Cruz is the
largest contributor to Bolivian GDP
(30 per cent), and generates a major
chunk of the country’s tax revenues.
In 2007 the value of exports from
Santa Cruz was four times that of the
region of La Paz. Second in wealth is
the region of Tarija, one of the four
regions that approved autonomy in
principle in 2006 and which is also
preparing for its own referendum to
implement that autonomy. About 85
percent of Bolivia’s natural gas
reserves are located in Tarija, which
accounts for its economic muscle.
East demands autonomy
The origins of the demand from
Bolivia’s east, for greater autonomy,
go back to the beginning of the
Spanish occupation. The eastern
lowlands, isolated for centuries from
the mineral-based economy of the
west, have an Amazonian climate
and look towards Brazil rather than
to La Paz. Add to that a strong
Spanish presence and some indigenous
peoples quite different from
those of the west, and you get a part
of the country with a very different
With a municipal system that has been democratizing since
the mid-1990s and an irrepressible regional movement, Bolivia
could, with a few changes, invent a new territorial model that is
neither unitary nor federal nor autonomous.
That structure could be one in which the three orders of government
would have equal constitutional powers: national,
regional and municipal. In all federal countries, the municipality
is important but in only some federal countries is it
recognized in the constitution. If Bolivia were to adopt such a
model, it could even surpass Colombia, which has been the
best example of Latin American decentralization in the past few
Unfortunately, Morales has not as yet succeeded in negotiating
a moderate arrangement for a diverse nation. He has less
than two years to go before his first presidential term is up to
square the circle and appease the four autonomous Eastern
regions as well as to transfer greater wealth and opportunity to
his indigenous constituency.
Bolivia’s President Evo Morales holds a hammer and chisel at
a ceremony in which he donated trucks and heavy machinery
to miners in the Cochabamba region in May 2008.
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries