Morales Seeks Compromise With Right Wing in Bolivia

by Gerry Foley / December 2006 issue of Socialist Action Newspaper

Since Evo Morales was voted into the presidency by a substantial majority in the December 2005 elections, the political and social situation in Bolivia has remained fluid.

This is hardly surprising since the country experienced two national mass upsurges that came to the brink of insurrection in 2003 and 2005. But it does demonstrate that Morales has not satisfied the demands of the masses who drove his predecessors from office.

Since assuming the leadership of the country, Morales’ popularity ratings, although not yet falling below a majority, have fluctuated dramatically. This is explained by his promises of radical change on the one hand, and the very limited results on the other, as well as by Morales’ fast footwork.

Morales’ popularity rating was plummeting before he announced the nationalization of the country’s hydrocarbon resources on May 1, and it was plummeting again when an open war opened up between the cooperative miners and the unionized miners at the Huanuni tin mine at the beginning of October.

The national union confederation, the COB, was threatening a general strike in support of the unionized miners. Morales responded by rebuffing the cooperative miners, even though they were linked to his party, the Movimiento al Socialismo (MAS). Moreover, the “cooperativistas” were presumably stars of the “Andean capitalism” proclaimed in particular by his vice president, Alvaro Garcia Linera—that is a sort of “people’s capitalism” of small enterprises.

Morales ousted his minister of mines, Walter Villarroel, who was linked to the cooperatives, and appointed Jose Guillermo Dalence, reportedly a former miners union leader, as his replacement.

The miners’ cooperatives are subcontractors, many of which employ workers who do not get the benefits and guarantees of the unionized workers. According to the radical news service Econoticias of Oct. 31, they control about a third of Bolivian mining production. The big foreign capitalist companies control about two thirds, and the state corporation, Comibol, only about 5 percent.

The conflict at the Huanuni mine, a hotbed of working-class revolutionary ideas, was provoked by the attempt of the cooperatives to grab more of the mine, while the unionized miners were demanding that Comibol hire more workers.

Morales defused the conflict by announcing that the mines would be renationalized and offering 4000 jobs for the cooperative miners under Comibol. His decision was a concession to the miners union, but a very limited one.

The only mine where nationalization was extended was Huanuni, which accounts for about 4 percent of Bolivian minerals exports. Further nationalization was promised for next year.

However, Econoticias reported Oct. 31: “The government, through Vice President Alvaro Garcia Linera, assured that all the concessions that the state, as the owner of the mines, granted to the native and foreign private companies, whereby they make only token payments of royalties and taxes, will be respected.”

The article also noted: “In its first nine months in government, the indigenista neoliberal policy continued, with the privatization of the world’s biggest iron mine, El Mutún, to the [East] Indian transnational Jindal, with a series of onerous concessions, such as a subsidized price for natural gas that amounts to transferring $100 million a year to Jindal along with permitting massive exploitation of raw materials with a low level of industrialization (only 5 percent of the iron mined will be made into steel.)”

At the end of October, the Morales government signed contacts with the foreign oil companies that were affected by his dramatic May Day proclamation of nationalization.

Morales announced that the new contacts would bring billions of dollars of additional revenue to Bolivia, enabling it to solve all its social problems. The government sweetened its announcement by beginning immediately to hand out payments to school children that it said were the fruits of the new income.

However, a closer look at the deal with the oil companies indicates that it was far less favorable to the Bolivian government than Morales had claimed.

Morales revealed that the deal offered legal security to the big corporations for 30 years. He was quoted in the Oct. 30 Le Monde as saying: “We are going to respect what the companies have always demanded, judicial security. We will never violate these transparent contacts. We have assured our sovereignty over our resources without confiscation and without expelling anyone.”

One indication, moreover, that there was something fishy about Morales’ claims of victory in Bolivia’s dispute with the oil companies was the fact that these rapacious capitalist corporations declared their satisfaction with the deal.

Econoticias reported Nov. 1: “The chairman of Petrobras in Brazil [the largest oil company operating in Bolivia], Sergio Gabrielli, said Tuesday at a press conference that the firm signed the contract because it was more favorable than that projected by the nationalization decree and did not require the company to make new investments.”

Furthermore, Petrobras announced in a press release that the Bolivian government’s share of the oil profits would only increase by four percent over the level established by the law that was on the books before Morales took office.

Econoticias noted: “Since the signing of the new contract between the YPFB [the state oil company] and Petrobras, Brazil’s minister of mines and energy, Silas Rondeau, maintained that both sides had to ‘yield’ in order to achieve an agreement, and thereby showed clearly how it is possible to overcome small differences strategically: ‘Certainly Bolivia gave something, certainly Petrobras gave something. I do not know who gave most, but both sides are satisfied.’”

Petrobas announced that the profits would be shared 50/50 with the Bolivian state, after the company recovered its investments.

However, the audits that have been done since May have shown that the oil companies greatly exaggerated the real extent of their investments. Furthermore, the major profits from the hydrocarbons industry come from the processing of oil and gas, not from the sale of the raw materials as such. And from the former, Bolivia will not collect a cent.

Even Morales’ former minister of hydrocarbons, Andres Soliz Rada, pointed out in a statement published Nov. 15 in El Mundo, the major daily in the right-wing stronghold of Santa Cruz, that the deal allowed the companies to post their Bolivian holdings as assets and therefore raise capital based on them, thereby depriving the Bolivian state oil corporation of that possibility and thereby of acquiring the means for doing its own investment in the development of the oil fields.

Soliz also lamented that Morales had promised the oil companies that there would be no expropriations. He said that such measures were essential, although he proposed only expropriations with compensation. Moreover, a Nov. 1 Reuters dispatch reprinted by Econoticias noted: “The contracts are mostly symbolic, since a lot of issues remain to be negotiated, mainly the price of the natural gas that the mountain country sells to Brazil.”

Obviously, the actual sum accruing to Bolivia will be a percentage of this price. So what Bolivia will finally get remains unclear. The accounting practices of the oil companies involved have been notably fraudulent and shown to be so by what investigations the Bolivian government has been able to sponsor.

One of the basic accusations that the Econoticias staff have made against Morales is that he has exonerated the companies from any legal responsibility for their past robberies by signing these contracts. But it is clear that the new contracts do not fundamentally alter the exploitation of Bolivian resources by the oil companies. The rules of international capitalism remain firmly in place. And therefore, the basic dilemma of the Bolivian masses remains the same, despite the political hype of the Morales regime.

On the other hand, public tensions remain high between Morales’ government and the traditional right wing—essentially on three fronts. The first is the agrarian reform, which, despite limitatations, worries the big landowners. The law was passed by the lower house of congress but stalled in the upper house, where the right has a small majority. Morales has called for peasant marches to try to put pressure on the Senate.

Then there is the law on the provincial governors, which would give the federal government more oversight and possibility even the ability to remove local officials. The right holds the majority of governorships, and notably all the governors of the provinces where the hydrocarbon resources are located.

And the third question is the Constitutent Assembly, which is the depositary of Morales’ promises to “refound” the country on a basis more favorable to the masses, in particular the indigenous peoples. Morales’ problem is that in the elections to the Assembly, his party failed to get the two-thirds majority that the original rules required for the adoption of changes.

Recently, the MAS has incensed the right by changing the rules to permit the adoption of changes by a simple majority. But it remains unclear what effect this will have since the final document can still only be approved by a two-thirds majority. Thus popular changes could be thrown out at the end of the process in the name of making a necessary compromise with the right in order to get the new constitution adopted.

These tensions reveal the die-hard reactionary nature of the Bolivian right, but Morales in every case has called for more “dialogue” with the parties of the oligarchy to overcome them. It is hardly likely in these circumstances that there will be substantial changes in the way the country and its economy are run.

In other words, although Morales was elected on the back of the upsurge against exploitation by imperialists and local capitalism and landlordism, he is serving more as a cushion for these interests than as a battering ram against them. His identification with Cuba and the anti-imperialism of Hugo Chavez in Venezuela serves him more than his proclaimed international comrades.

If the workers and peasants of Bolivia are going to achieve their aims and counter the backlash of the right, they will need to be able to get Morales out of the way and find a leadership that genuinely represents their interests.

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