Bolivia: Country in turmoil (Updated)

Today is a very important day for the country of Bolivia. It is also, perhaps one of the most challenging for its President, Evo Morales. In the state of Santa Cruz, the country's wealthiest which accounts for 30% of its GDP, and is rich in natural resources such as gas, fertile land, iron ore, water and forests, a referendum is being held on whether it should become autonomous from the central government in La Paz. Support for the referendum, within the state, according to most polls, stands at 74 percent, which is far above the two-third majority needed for it to pass. Additionally, depending on the outcome of the referendum in Santa Cruz, three more states (Beni, Pando and Tarija) in the lowlands of the country (also the wealthiest), have indicated that they will go ahead with their own autonomy referendums this coming June. Combined, these four states account for 35% of the country's population and 65% of its GDP. If the referendum's pass, the country of Bolivia would effectively be divided into two parts, one controlled by the indigenous majority in the highlands, and the other by European descended elites. For his part, President Morales, with international backing has called the referendum illegal and unconstitutional. In this post I want to look a little deeper into the situation and the many reasons behind the current turmoil. The post, will also be updated later tonight to reflect any known electoral results, and reactions.

There are many components to this conflict as it traverses various issues at once. It is a conflict that stems not only from the economic, but also from ethnic/racial and ideological divides. Bolivia, due to its colonial past, contains many of the vestiges from the era, including a European descended elite, and an impoverished indigenous population, which until the election of Evo Morales two years ago, had very little to no access to the levers of power in the country; this, despite the fact that they make up to 60% of the country's population. In fact, the indigenous population was so marginalized that until the revolution of 1952, Bolivians of indigenous descent were not allowed near the presidential palace. Part of the disdain with which mestizos hold the indigenous population was evidenced when Ms. Bolivia suggested that her country was not an indigenous nation, because there were many people like her who were not only tall, white, but could speak English.

Even now in Santa Cruz, there is evidence of historic racism against the indigenous population of Bolivia. TV reports indicate that members of a youth militia known as Unión Juvenil Crucenista, who have promised to protect voters as they make their way to the polls, have been seen not only roughing up indigenous street merchants, writing graffiti with the message to "grab your weapons, and kill the kollas," (the derrogatory term used for the indigenous people of Bolivia) but also, and perhaps more troubling, wearing swastikas, denoting a far more radical bend.

Cruzeños (as the people of Santa Cruz are known) reject accusations of racism and point instead to economic factors, and President Morales' leftists ideologically driven programs as the main reasons behind the referendum. To be sure, there is much evidence for this starting with President Morales' pledge, when running for office, to not only nationalize the country's industries but also to redistribute wealth (particularly land) in favor of the country's indigenous poor. In a country were 10% of the population, own almost 90% of the land, this measure did not go down well for the elite.

This past May Day, President Morales through decree announced the nationalization, in the form of gaining a 51% controlling stake of three major energy companies, including "Transredes (controlled by Ashmore and Shell), Andina (controlled by Repsol) and Chaco (controlled by Pan American Energy)." Moreover, he also ordered the taking over of DLHB (controlled by Peruvian and German investors). Additionally, President Morales announced, the re-nationalization of Bolivia's biggest telephone company, Entel, which was purchased by Telecom Italia SPA as part of the privatization efforts of former President Gonzalo Sanchez de Lozada (in 2003 was forced to resign due to mounting pressure and protests led by Morales) during his first presidential term (1993-1997). Something that will likely be important given the today's referendum, is the fact that Morales has sent police and soldiers into Santa Cruz to secure offices belong to Entel. Many analysts believe that the nationalization of companies, also has a political benefit for Morales, since it prevents these companies, now owned by the state of Bolivia, from being taxed or expropriated by any future autonomous region like Santa Cruz.

As alluded to above, however, the nationalization of foreign owned companies, while disturbing to the elites in the country, is not the main economic reason for the referendum and opposition to Morales. Instead, the main justification for the referendum stems from Morales' pledge to redistribute wealth, and to use the recent constitutional convention and/or a nationwide referendum to advance a law that would effectively prohibit the owning of more than 5,000-10,000 hectares of land. This, in a country where some families own as much as 200,000 hectares used mostly for Agribusiness. In fact, the government has already given landless peasants deeds for to 10 million hectares of "unused" land.

The conflict over land redistribution, also borders on the international since many of the current owners are from outside Bolivia, particularly from the US, Europe, Asia and neighboring countries such as Argentina and Brazil. One of the most salient examples of this, is the much hyped conflict (by the Bolivian government) between the Montana born, US rancher, Ronald Larsen and Bolivia's Vice-Minister of Land. The government accuses him of leading violent opposition to it's land reform program, including the attacking of the Vice-Minister of Land's convoy as it made its way through his property. The incident, was followed by two weeks of rancher road blocks and violence that left 40 indigenous people injured. Larsen, is also accused of having kidnapped the vice-minister for eight hours in February. As a result, the Bolivian government has filed a complaint against Larsen and his sons (one of whom recently won the Mr. Bolivia pageant) for crimes including robbery and sedition. The government of Bolivia has used this conflict as a means of rallying opposition to the referendum, by pointing to American meddling, not only by its nationals, but also accusing the US Ambassador to Bolivia of supporting the opposition and their referendum.

The US, however, is not the only player involved as Brazilian land owners are also worried about Morales's move toward land-reform. Brazilian businessmen, have invested over $1 billion in Bolivian land for the cultivation of soy beans, whose farming accounts for 7% of Bolivia's economy, and adds 150,000 jobs to the country. Brazilians are especially worried, given the manner in which Morales' is perceived to have backtracked on promises to respect Brazil's oil company, Petrobras as a partner in the country, following its earlier moves to nationalize the industry.

President Morales, on the other hand, faces a lot of pressure from the indigenous population for faster results. This, since as far as 2006 he has been trying to enact reforms such as land redistribution and has so far failed. What's more, even with regard to the autonomy issue, Morales has to walk a fine line. On the one hand, he opposes the autonomy referendum in Santa Cruz and other lowland states, but is working to give such autonomy to the country's 36 indigenous groups, whom as noted above, are getting impatient with the pace of reform. Already, in the past, Bolivia's government has fallen by failing to heed the demands of the indigenous population. This was the case in 2003 when Lozada was forced to resign, in a chaotic process that eventually led to the election of Evo Morales as President.

The divide between Santa Cruz, and other lowland states with the central government in the country's highland's is also ideological. As noted before, due to their wealth most of the lowland states are bastions of the right; while the highlands, due to their poverty and history of oppression at the hands of the country's mestizo population, are strongholds of the left, and its leader, Evo Morales. The right seeks to protect the status quo, since they have benefited from it greatly, while the left, wants a wholesale change to the manner in which the country is run, including a re-distribution of wealth and better representation for the country's indigenous population. To be sure, the indigenous population has largely been marginalized by the country's mestizo population and many view its wealth as ill gotten, and the product of a post-colonial order that effectively gave them everything, while the indigenous population got nothing.

In broader terms, the conflict is also tied to the divisions within South America, where leftist governments (particularly that of Hugo Chavez) have committed themselves to undermining American influence in the region. This has been evident in the opposition to the referendum from the leaders of Venezuela, Cuba, and even Nicaragua who have accused the US of fomenting the crisis to weaken the leftist leader. In fact, all three countries have promised not to recognize Santa Cruz as an autonomous entity. Morales, with his close ties to Hugo Chavez, and his opposition to the US's coca eradication programs, has not endeared himself to Washington, and a victory for the referendum would likely undermine his government, something Washington would perhaps, if not encourage, at least not look upon in disfavor. The ultimate aim here being, not the break-up of the country, but a weakening of a leftist leader closely aligned with Venezuela and Cuba. It is doubtful, however, that the US is actively involved, despite the accusations from Bolivia's government, since any American action along this line would be seen unfavorably across all of Latin America, even in those countries friendly with the US. In short, the overall benefit would not be worth the risk. The reason for this is that even Brazil, despite its disputes with Morales, would not want to see the break-up of the country. This would be the case, not solely because they would not want to see a destabilized Bolivia, or a country enmeshed in a bloody civil war in the heart of South America, but also because for Latin Americans as a whole, given the history of US meddling in the region and its involvement in the break-away of Panama from Colombia, are very sensitive to such an issue.

At the same time, it is unclear what will happen following today's referendum. Santa Cruz will likely vote for autonomy, but then what? At the MABB blog, Miguel (who is in the country now) ponders what will not only happen today as the referendum gets underway, but also, once it has passed. According to him, things are calmer than one would expect given the tensions in the country, and he expects it to remain that way, with a few exceptions. Miguel reports that in stronholds of MAS (Morales' party) particularly the towns of San Julian and El Torno, and the neighborhoods of Plan 3000 and Villa Primero de Mayo there is increasing hostility towards the referendum. He also notes news reports from San Julian, where "MAS supporters have threatened to burn ballot boxes and to stop people from participating in the referendum." He posits that there is a very real danger that these MAS supporters in Santa Cruz, will come face to face with "the commandos from the Union Juvenil Crucenista (UJC) and the so called 'security forces' who have said they will guarantee the right of citizens to participate and vote." Such confrontations can start small, but quickly get out of hand.

According to Miguel most analysts agree that though the referendum will pass, nothing much will happen in terms of the government of Santa Cruz implementing it, since they see it as more of a bargaining chip for Cruzeños to use to demand more changes to the draft constitution and to revise the referendum on land reform. Indeed, passing the referendum, which will also embolden three more states to follow suit, would give Santa Cruz and the interests they represent an effective means of gaining concessions from Morales. This of course, is much easier said than done, since granting economic concessions to Santa Cruz, would mean backtracking for Morales on promises he made to his indigenous constituency. Additionally, since the ownership of land, and economic prosperity are also seen within Bolivia through the lens of its colonial past, it will be very difficult for Morales to explain to his supporters how capitulating to the elites on fundamental issues such as land reform, will aid him in his much vaunted "re-founding" of Bolivia, where the indigenous population will finally have equal rights and an equal voice in how the country is run, and a stake in their own betterment. This without counting on the Chavez factor, whom as we have seen in the past is not shy about meddling in crises outside of Venezuela's borders.