Member Article

Background The return to democracy in October of 1982 arrived with a “social debt” derived from the days of the Siles Zuazo government, which, by giving way to the workers’ demands, caused Bolivia to enter into a hyperinflationary downward spiral. The Government of Siles Zuazo ended one year before the end of its term (as Mesa did), allowing Dr. Víctor Paz Estensoro to come to power through the general elections of 1985. Paz Estensoro applied extreme adjustment measures that stopped hyperinflation and drove Bolivia into financial stability and a social calm that lasted until a decade ago. The democratic system continued with unusual normality, but starting from the mid 1990’s; during the constitutional administrations of Sánchez de Lozada and Banzer, an unforeseen social escalade of popular and unrealistic demands began, which coupled with adjustment measures and the capitalization (50% privatization) of State companies gave way to social unrest encouraged by indigenous leaders which had started imposing a new and until then unknown protest mechanism: road blocks. These rural and union leaders penetrated radical sectors supported by impoverished and unemployed social classes, encouraging disturbances that led to critical situations during the governments of Banzer and Quiroga, culminating with the oust of Sánchez de Lozada in October of 2003. In addition, the economic situation started to deteriorate as world markets fell and strong economies such as Brazil and Argentina entered into economic crisis. There are many reasons for the insurgency, but it can be affirmed that some aspects such as Bolivia’s extreme poverty and wealth distribution are valid while others are essentially political. Corruption was the primary reason behind the gradual wearing down of the economic and political system. Political favors, shady negotiations and high salaries caused the deterioration of the “Political Class”, to the point of losing all credibility. This also weakened the democratic institutionalism since it essentially affected Parliament and increased the support for radical popular insurgent leaders that demanded major structural changes. The demands for such structural changes increased during the administration of Carlos Mesa, who became President after Sánchez de Lozada was ousted from power by popular demand. Carlos Mesa offered more than what he could muster, leaving behind issues still unresolved as of today such as a definite hydrocarbons regime, constitutional reform and departmental autonomy. In order to meet these measures, Carlos Mesa conducted a binding referendum, which was carried out on July 18, 2004. The referendum was poorly outlined, and even though all questions had a positive response, most Bolivians are still expecting the outcome. One of the last acts of Congress while Mesa was still President was the enactment of the Hydrocarbons Law No. 3058 of May 19, 2005, which in effect increased royalties to 50% of production. However, given the uncertainty of how this new law will be applied and even though royalties were significantly increased, Mesa resigned due to social unrest demanding the nationalization of all hydrocarbons. The extremely weak government of Carlos Mesa could not continue because it promised everything but delivered nothing. Current Situation At present and as of June 9, 2005, Bolivia has a new president; Dr. Eduardo Rodríguez Veltzé who came to power as a result of a constitutional provision that allows the President of the Supreme Court to preside when the Vice President and the President of Congress are unable. In this case, there was no Vice President and the President of Congress, because of past political links, was not allowed to take power. Rodriguez Veltzé is not a politician and has no political ambition. He has assumed power in order to preserve democracy and will return to the Supreme Court as soon as general elections can be organized. He has however, taken command of a ship that in many ways continues to sink. Potential gas markets have taken interest in other less unstable gas rich countries such as Perú. This situation will continue until a government with a firm hand can guarantee and protect foreign investment. Weak governments such as that of Mesa or Sánchez de Lozada will only encounter their same fate, which in turn, will strengthen socialist radical movements that want to convert Bolivia into a communist State. This new government will also have the task of resolving issues such as constitutional reforms and departmental autonomies. In spite of the chaotic situation in which the country is immersed - from being an example of renewal and change to becoming the worst South American example of disorder - we can only hope for the situation to improve. It is important to point out that Evo Morales, the head of the MAS party, is at present the only clear political leader and candidate for the next general elections. This does not mean that Morales will be the next president, but it is quite possible that he may obtain the majority of votes. Notwithstanding this, estimates show that voting results for Morales will not surpass 25%. Therefore, in order to govern and legislate in peace, it will be necessary for him to enter into political agreements with other parties that have obtained a significant amount of votes and representation within Congress. This will force Morales to discard his current radical leftist political line to a more moderate center left government. Manfredo Kempff M.