Bolivia’s Radical Realignment

W ith the nationalization of Bolivia’s natural gas and petroleum resources, President Evo Morales is dramatically reshaping his country’s destiny. On May 1 he proclaimed “an historic day has arrived. Now the gas and oil that flows from our land will no longer belong to foreigners.” This came just after his return from Havana, Cuba where he signed the People’s Trade Agreement with Fidel Castro and Hugo Chavez of Venezuela. 

Until these dramatic steps, it was somewhat unclear in what direction Morales was moving during his first three months in office. He and his foreign minister held at least four talks with U.S. Ambassador David Greenlee in which both sides seemingly extended the olive branch. As Greenlee said in March after one meeting, “We have a constructive dialogue with the government of Bolivia over a wide range of themes and mutual interests.” 

Two factors compelled Morales to seize the country’s national resources and to realign the country internationally: (1) the militancy of the country’s peasant, worker, and indigenous movements, and (2) the decision of the U.S. to foist “free trade” agreements that would damaged Bolivian exports to other Andean nations. 

Morales and his political party, MAS (the Movement for Socialism), took power in January with a clear popular mandate. Until May 1 some of the country’s popular movements felt that Morales had reneged on his campaign promises as he did little more than state that Bolivia already “owned its resources.” His approval ratings dropped from 80 to 68 percent. But as one observer in La Paz notes, “Evo is a masterful politician. Morales chose this moment to act because of the elections for the Constituent Assembly that are scheduled for July. The assembly will have the power to redraft the country’s constitution and reshape its political institutions.” 

As Vice-President Alvaro Garcia Linares has noted, the goal of MAS is “to achieve hegemony” and the Constituent Assembly is central to this process. Bolivia has been unstable for years because of poverty, military revolts, and the conniving of the country’s political elites as they loot the public treasury. As in Venezuela, prior to Hugo Chavez’s election, the traditional parties are viewed as bankrupt. 

With the government’s expropriation decree, 15 corporations have been nationalized, along with foreign capital from a wide variety of nations, including the U.S., Spain, Great Britain, Brazil, France, and the Netherlands. Seizing control of these enterprises goes hand in hand with Bolivia’s audacious steps in the trade arena. MAS and Morales view neo-liberalism, U.S. trade agreements, and corporate-driven globalization as major obstacles to their country’s development. This year Colombia signed a so-called “free trade agreement” with the United States that is particularly harmful to Bolivia. Sixty percent of Bolivia’s major agricultural export, soy beans, currently goes to Colombia. The U.S.-Colombian accord means that subsidized U.S. grains will flood Colombia, driving out Bolivian soy production. 

Peru has also signed a trade agreement with the U.S. that will have an adverse impact on Bolivian exports to Peru. These accords have ruptured the 37-year-old Andean Community of Nations, a trade pact that included Venezuela and Ecuador, as well as Bolivia. Chavez announced in April that Venezuela was withdrawing from the pact because the U.S. had “fatally wounded” the community. Morales has also stated that Bolivia is reconsidering its membership. 

This discontent with the Andean community led to the signing of the People’s Trade Agreement on April 29. The accord is particularly favorable to Bolivia as Cuba and Venezuela have agreed to take all of Bolivia’s soy production, as well as other agricultural commodities, at market prices or better. Venezuela will also ship oil to Bolivia to meet domestic shortfalls in production while Cuba will send doctors.