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Impact of Evo Morales' landslide victory in presidential vote
The "new" Bolivia?

January 20, 2006 | Page 8

TOM LEWIS analyzes the political situation in Bolivia after last month's presidential election.

EVO MORALES and the Movement Toward Socialism party (MAS) won Bolivia's presidential election last month with a stunning 54 percent of the vote. Morales, an Aymara Indian, is the first indigenous president of Bolivia.

The election campaign shaped up as a national referendum on neoliberal economic policies. After 20 years of privatization and cuts in social spending, Bolivia remains the poorest country in South America. Morales' victory December 18 sent a strong message from Bolivia's majority to the captains of international finance, industry and trade.

In the days immediately following the election, Morales met in Cochabamba with leaders of the social movements who had supported him. This step broke the traditional pattern of meetings between the president-elect and the heads of political parties that will form the official opposition.

Shortly after, Morales announced that he would repeal a 1985 decree that provides for privatizing state enterprises and imposing "flexibility" on Bolivian labor. That strikes at the heart of the legal foundation of neoliberalism in Bolivia.

Morales also indicated that he will use last May's ruling by the Supreme Court--a ruling that invalidated existing contracts with transnational oil and gas companies--to negotiate new contracts on terms more favorable to Bolivia's treasury.

Morales moved simultaneously to placate the conservative leaders of the oil- and gas-rich eastern provinces, who want autonomy and have threatened secession if Morales goes too far in dismantling neoliberalism. Morales approved private exploitation of the region's iron and manganese mine in Mutún over the protests of environmentalists, unionists and peasant groups.

Morales also issued a statement guaranteeing the private property of big business and large landowners. And despite what many consider irrefutable proof, he absolved Repsol, the Spanish-Argentine transnational corporation, from allegations that it trafficked in contraband hydrocarbons.

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MORALES HOPES to use super-profits from natural resources to pay for significant improvements in the living standards of Bolivia's workers, peasants, poor and unemployed.

But unlike Venezuelan President Hugo Chávez, Morales isn't inheriting an already nationalized and developed hydrocarbon industry. The need to negotiate with foreign investors for development capital will limit how far Morales can go toward full nationalization. His stated plan is to nationalize only subsoil resources--the gas, oil and minerals in the ground--and leave surface property and exploitation largely in private hands.

Despite continued dependence on foreign investment, Morales will find himself in a strong position for other reasons. Natural gas prices have risen quickly--even faster in percentage terms than oil prices--since the start of the Iraq War.

Should Europe's transnational corporations, which presently dominate Bolivia's hydrocarbon industry, and U.S. companies prove stubborn in negotiating new contracts, China awaits its chance. And Chávez himself may be willing to contribute substantially toward financing the development of Bolivian gas.

Morales's central political challenge will be to retain the loyalty of the social movements while keeping the confidence of Bolivia's ruling class.

Unlike President Luiz Inácio "Lula" da Silva of Brazil, the former union leader who has disappointed his supporters by maintaining neoliberal policies, Morales is more directly accountable to a broad social movement that has ousted presidents and transnationals alike since 2000. Bolivia's social movements can and will challenge if he betrays their expectations for radical social change.

Enthusiasm prompted by Morales's political victory over his neoliberal rivals is tempered by wariness at his increasingly moderate record since 2002. Morales was instrumental in bringing about a settlement to the gas wars of 2003 and 2005. For most of 2004, he became the main prop of the government of President Carlos Mesa, who had continued in the neoliberal footsteps of toppled President Gonzalo Sánchez de Lozada.

In 2005, Morales was the last prominent figure to sign on late to the popular campaign to nationalize natural gas and oil. And Morales' assurances to global capital today have already caused rumblings among some of the groups with the greatest capacity for mobilization.

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MORALES PROCLAIMED in the last days of the presidential campaign, "We will bury neoliberalism." Significantly, he did not say, "We will bury capitalism."

Morales' Vice President-elect Álvaro García Linera candidly acknowledges that their party, the Movement Toward Socialism (MAS), is a "center-left" formation, and that their goal is "Andean capitalism."

If the MAS prevails, neoliberalism is on the way out in Bolivia. But socialism remains a project that the MAS claims must be postponed for 50 to 100 years. Instead, Morales is seeking a new accommodation with global capitalism based on a revitalized role for the state in providing for the wellbeing of its citizens.

At stake in Bolivia is whether neoliberalism can be reformed away--or whether ending neoliberalism, like overthrowing capitalism, requires revolution.

The world's imperialist powers recognize these stakes and have moved to smooth some of the rough edges in Bolivia. The International Monetary Fund has forgiven $251 million in Bolivian debt, and Spain has written off another $120 million in private debt.

These steps will help put money at Morales' disposal to inject into social programs. But the dynamic of severely polarized class forces may frustrate imperialism's hope for as little change as possible--and Morales's hope for as much change as he can get away with. It is extremely unlikely that neoliberalism--still backed 100 percent by Washington and the bulk of the European Union--will be surrendered without a struggle.

Morales deserves the support of socialists for every blow he strikes against these policies. And he deserves our criticism for every accommodation he makes to global capitalism.

In the end, the fate of neoliberalism and capitalism in Bolivia rests in the hands of the masses who are increasingly asserting their own control over the future.

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