While President Evo Morales is visiting Algeria, Libya and Iran to strengthen ties, unprecedented in the history of the Andean nation, Bolivia is in the midst of the most severe political crisis in Latin America. Violence continues to escalate as anti-government forces from Bolivia’s half-moon region (Media Luna in Spanish) conformed by the four eastern, gas – rich lowland departments of Santa Cruz, Beni, Pando and Tarija staged strikes and road blockades. On Friday, protesters stormed a small airport Friday and blocked major highways across eastern Bolivia in a standoff against the government.
The President’s attempts to change the constitution, redirect natural gas revenues to fund spontaneous social programs, basically giving away money to some sectors of society without a plan and begin a land reform which would mean the nationalization of private property are being met with staunch opposition from the country’s resource-rich eastern provinces (which together account for most of the country’s natural gas production, industry, agribusiness and gross domestic product) who are seeking greater autonomy from Morales’ leftist government.
Soon after Morales assumed the Presidency in January 2006, he nationalized the natural gas industry and accelerated land handouts to the poor. The opposition claims that the President wants to impose a socialist economic model, copying his Venezuelan counterpart, Hugo Chavez and argue that Bolivia is turning into a totalitarian state, that the President is only focused on making a new constitution that would allow him to run for president indefinitely and unfairly privilege indigenous groups. They also accuse him of misusing the revenues of gas to instill Chavez’s “socialist revolution.” Recent demands include the objection to the presence of an unrevealed number of Venezuelan military in the country, including air force pilots who shuttle Morales around in two Venezuelan helicopters.
The leaders of the lowland provinces have drawn up their own autonomy statutes, which would give their provinces the right to administer their own natural resources, collect taxes, pass laws on the use of their land, and create their own police forces. They maintain that too much of the state’s wealth is sucked away by the central government to subsidize Bolivia’s poor in the western highlands. They also argue that Bolivia should charge more for the natural gas it exports to neighboring Brazil and Argentina because they are giving it away. Bolivia produces about 1.4 billion cubic feet a day, of which Brazil alone buys 1.1 billion cubic feet, or half the natural gas consumed.
The issue of Hydrocarbons
The issue of how that money should be allocated between the national and regional governments is at the bottom of the current confrontation between the departments of eastern Bolivia, where the gas fields are located (and which have declared themselves autonomous), and the central government, which collects the taxes and royalties.
The opposition is demanding that the government give back the money it has collected by taxing hydrocarbons in order to fund the pension plan. The president of Santa Cruz’s civic committee, Branco Marincovick, said the tax is constraining regional development and the leaders of these cities say their departments have the right to control their own affairs, including the access to gas revenues. The opposition claims that they want to manage the resources to reinvest in infrastructure to continue producing gas and that they should be able to allocate the resources efficiently according to their needs and that the government is misusing their revenues.
The national government initially cut off, by decree, the departments’ share of taxes paid by oil and gas companies to Bolivia. In recent days Morales made threats to cut off more revenue from oil and gas that had been going to the departments by cutting off the departments’ share of royalties.
The recent crisis unfolding
In May, 2008, Bolivian President Evo Morales set August 10th as the date for a recall referendum that would allow voters to cut short his term in office, as well as those of his vice president and the country’s eight provincial governors. On the scheduled date, Bolivians returned once again to the ballot boxes. The referendum asked Bolivians to vote yes or no on the continuance of their president and of the country’s nine prefects (elected governors). 67.41% of voters said yes for Morales and his political party MAS which now has a stronger mandate than before to move for the approval of the new constitution, which according to Vice President García Linera, is essential to “institutionalizing the changes the President promised.”
Although Morales’ won, the prefects from the four eastern, lowland departments-Santa Cruz, Beni, Pando and Tarija-who have been spearheading the opposition, were also ratified. Santa Cruz has taken the lead in asserting its autonomy from La Paz and in rejecting the text of the new Constitution drafted by a constituent assembly in 2006-07. These cities held referendums from May 4th and June 24th to voice their desire for regional autonomy which was approved by an overwhelming majority in all of these states. Thus the outcome of the recall referendum strengthened both the government and the opposition, preventing a decisive victory for either side and revealing a high level of political polarization giving both sides more time to continue with their agendas.
The night of the referendum, Mr. Morales expressed his determination to deepen the reforms and transformations that his government has been attempting to carry out, but he also expressed a “commitment to dialogue and compromise” for the sake of national unity. He said that both sides should find a way to merge the new draft constitution passed by the MAS-dominated Constituent Assembly with the Autonomy Statutes drawn up by the opposition forces in the lowland departments. Morales called the prefects to La Paz to begin the negotiation process but talks broke down with each side accusing the other of being unwilling to compromise.
On mid-August there was a 24-hour violent general strike in the Departments of Pando, Beni, Santa Cruz, Tarija, and Chuquisaca to protest gas revenue sharing with the central government. On August 23, the MAS and its supporters decided in a national meeting that the president should move forward on ratifying the new constitution by convening another national referendum. Two weeks later, when a Bolivian military helicopter carrying President Morales landed in Guyaramerin in the northeastern Bolivian department of Beni, after his meeting with a Canadian oil company, members of the Youth Union of Beni attacked the helicopter with rocks and bottles and the Brazilian military had to be mobilized to help Morales out of this situation.
Finally on August 28, before embarking to the Middle East, Morales announced that the nationwide referendum to approve or reject the new constitution would be held on December 7th. The opposition complains that it was illegal for Morales to issue a decree to hold a referendum on the draft constitution instead of having it approved by Congress, as stipulated by the constitution and the Governors from Santa Cruz, Tarija, and Chuquisaca declared themselves “on a war footing” (en pie de Guerra in Spanish) against any attempt to approve the governmental constitutional. In addition they said that no referendum would take place in any of these departments. Rubén Costas, prefect of Santa Cruz, is moving forward with plans to organize a departmental electoral court and police force.
On September 2, while Mr. Morales was abroad, the country’s National Electoral Court blocked the December 7th referendum decree stating that by Bolivian law, any such vote must be first approved by the Congress. Bolivia’s senate is controlled by Morales’ opposition so the President faces serious political challenges to his rule and to his efforts to lead his so-called “democratic and cultural revolution.” But Morales and his supporters have decided not to acknowledge this decision.
On September 4, an airport was closed in Cobija, on Bolivia’s northeastern border with Brazil, after opposition-allied protesters stormed the runways and seized a military aircraft. Hundreds of vehicles blocked a highway connecting Bolivia’s administrative capital of La Paz with the prosperous eastern city of Santa Cruz. In the southeastern Chaco region there were fuel and food shortages in some communities due to protests. Highway blockades were ordered on Wednesday by the governors of five states that oppose holding a national referendum on a constitution written by allies of the president. For several weeks now, Morales has been calling on his supporters to “defend” the process of “change” but so far, there have been only sporadic reactions mainly in the capital city of La Paz and some confrontations with road blockers.
It’s important to keep in mind that the government and the leftist media are trying to portray the opposition as obstinate and irrational arguing that they oppose an equal redistribution of the wealth which is not the case. There is a lot to be done to correct the problem of the poor Bolivia; However, Morales from the beginning tried to impose his Chavez’s style socialist project while ignoring an electoral minority that controls the country’s resources. It is wrong to impose a constitutional reform whose legitimacy is based on a form of a contract between him and the indigenous populations while excluding the mestizo and white populations of the country. The constitution should represent all.
Since Monday, the situation has gotten worse. The Young Civic Unions of Santa Cruz, Beni, Pando, Sucre and Tarija are directly challenging the state’s authority not only staging road blockades, but also occupying state buildings and are even planning to shut down border entry points. There are threats by supporters of autonomy in the east to cut off natural-gas supplies to neighbors Brazil and Argentina and the President has rushed security forces to protect oil and gas pipelines. As a result President Morales shuffled his Cabinet, changing five ministers including the energy portfolio. But instead of staying in the country to solve these pressing problems, he decides to go and visit Iran, Algeria and Libya to sign energy accords, a trip, which according to many, has been promoted by Caracas. They say this shows who he is loyal to. Bolivia needs a leader who will take this country to the next level by implementing sound economic policies and the opposition knows that in Evo’s mind this won’t happen.
Nicole M. Ferrand is the editor of “The Americas Report” of the Menges Hemispheric Security Project. She is a graduate of Columbia University in Economics and Political Science with a background in Law from Peruvian University, UNIFE and in Corporate Finance from Georgetown University.
 Protesters stormed a small airport Friday and blocked major highways across eastern Bolivia in a standoff against the government. September 5, 2008. The Associated Press.
 Bolivia opposition wants higher-priced gas exports. August 23, 2008. The Associated Press.
 “High Anxiety” reigns as crises threaten. September 1, 2008. Bolivia: A Santa Cruz Perspective.
 Protesters paralyze Bolivian highways, airport. September 5, 2008. The Associated Press.
THE AMERICAS REPORT
NANCY MENGES and
LUIS FLEISCHMAN, Editors
The Americas Report is the featured product of the Center for Security Policy‘s Menges Hemispheric Security Project. It features in-depth, original articles on subjects not regularly covered by the American press.
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