Sunday’s referendum could provide needed impetus to Bolivia’s beleaguered economic development, but at a cost

Sunday’s All-Important Natural Gas Referendum in Bolivia

The memoranda presented below relate to the political and social turmoil affecting Bolivia. The first focuses on the upcoming July 18 natural gas referendum and its implications on President Mesa’s political mandate and on his vocal indigenous opposition. The second broadens this analysis by examining the socio-economic problems that have engulfed Bolivia over the last several decades.

  • A pivotal moment in President Mesa’s search for a political mandate.
  • Democratic process under pressure from increasingly-disenchanted indigenous groups.
  • Split in the Indigenous movement could prove costly.
  • Judgment Day for President Mesa’s Aggressive Agenda.
    On July 18, the Bolivian electorate will decide the future of the country’s immense natural gas resources in a much anticipated national referendum. The plebiscite will be the first chance for the Andean nation’s populace to vocalize their support, or lack thereof, for journalist-turned-politician President Carlos Mesa. His ascension to the country’s highest office came on the heels of violent domestic disturbances due to the harsh neo-liberal reforms of former President Sánchez de Lozada, whose increasingly authoritarian bent and growing reliance on the military led to his ouster in 2003. Lozada’s policies helped to bring about the death of almost 120 protestors after he ordered the armed forces to suppress the popular discontent that led to his forced resignation. The referendum’s outcome is of two-fold importance: not only to determine Bolivia’s future economic development, but also to bolster President Mesa’s fragile backing for his economic strategy.

    Indigenous Struggle to Limit Foreign Exploitation.
    Acting as a conciliatory figure, the non-partisan Mesa assumed the presidency promising to amend his predecessor’s controversial privatization agenda, which caused increased social inequality and fermented widespread domestic unrest. This populist strategy, however, has increasingly been questioned by militant indigenous groups who see Mesa’s fraternization with foreign multinational firms as a betrayal of his October 2003 pledges. Their mistrust is founded on the 500 year history of colonial and neo-colonial exploitation that has plundered the country’s natural resources and has left the nation and its mainly indigenous population economically underdeveloped and mired in abject poverty. Championing the re-nationalization of the gas industry, these grass-roots organizations have highlighted the debatable merit of the financial decisions of the post-Lozada period with nation-wide industrial strikes, widespread road blockages, and anti-referendum demonstrations.

    Through their objection to the upcoming referendum, these indigenous groups, ranging from Felipe Quispe’s United Farm Workers Union of Bolivia (CSUTCB) to Jaime Solares’ Central Obrera Boliviana (COB), are struggling to further their role in determining Bolivia’s economic future. This strenghtened position, however, has been undermined due to consistent political in-fighting within the movement itself that has left the once united indigenous cause split and politically weakened. This costly development could cause grievous damage to a peaceful resolution of the natural gas dispute, hinder the controversial cultivation of coca leaves and raise doubts over the ultimate destiny of the indigenous community.

    Mesa Attempts to Strengthen Fragile Popular Mandate
    Due to the strength of these dissenting voices, President Mesa has modified his economic position, extolling the principles of the popular control over industrial development, but also stressing the benefit of foreign investment in certain key areas. His proposed strategy calls for government regulation of internal and external gas sales and heavy taxes on multinational corporations to fund domestic development programs, as well as the use of the gas issue as leverage with Chile to gain territorial access to a Pacific port. Through such pragmatic solutions, Mesa would have Bolivia emerging from its present quagmire to assert control over its economic and political future. “Bolivia is living through a very difficult moment,” Mesa stated in a recent BusinessWeek interview. “Our task is to combine ever-greater [popular] participation with reconstruction of the relationship between society and the state.” This movement towards social cohesion, however, will be undermined if Mesa cannot address the indigenous community’s grievances over the nature and direction of the country’s economic progress. President Mesa’s predicted victory on July 18 will provide him with a strengthened mandate for his moderately progressive agenda that, as he sees it, will ultimately strive to open a doorway to sustained domestic development. The referendum’s confusing and inherently biased language, however, is a concern that must be addressed to legitimize his victory and ensure the will of the people is upheld. Mesa would be unwise to not incorporate the aspirations of the more radical wing of the indigenous movement into his economic planning. Their skepticism is well merited by half of a millennium of double-dealing and betrayal that have left Bolivia’s indigenous people suspicious of easy solutions for complex problems and of expecting charity from those they see as their traditional exploiters.