Managing Bolivian Capitalism

Evo Morales’s administration has scored some successes, but it has failed to deliver on its more radical promises.

Internationally, capitalism is in crisis. But in Bolivia, South America’s poorest country, it’s being managed with some success by the government of Evo Morales and his Movement Toward Socialism (MAS) party, now three-and-a-half years into its second term in office.

On a Friday evening in late June, I sat down with Marianela Prada Tejada in the office of the Ministry of Economics and Public Finance. She’s presently the executive of the cabinet that runs the ministry, and has been working in different posts within it since 2007. She began our conversation by noting the bad reputation left-wing governments developed over the years in terms of economic management in Bolivia.

Pinning this baggage mainly on the unprecedented hyperinflationary crisis that occurred under the watch of the short-lived Democratic Popular Unity (UDP) administration in the early 1980s, Prada Tejada believes that UDP failure opened the door for the long neoliberal night that followed. As a result, a collective notion has lived on in the country’s imaginary, which says that “progressive governments, governments of the Left in Bolivia don’t know how to administer the economy of the country.” Even worse, she laughed bitterly, this time, with Morales, it was an Indian in charge. There was no doubt for the racist opposition that “a left-wing Indian was going to be a disaster for the country.”

With hindsight, even by neoclassical standards, it seems Morales has been a better night watchman over private property and financial affairs than the Right could have hoped for. “Thankfully,” Prada Tejada told me, “with a very responsible administration of the economy, all of this speculation that there would be a crisis, that we wouldn’t be able to run the economy, has disappeared.”

But if such stress on fiscal responsibility on the part of the government was beginning to sound reminiscent of introductory economic textbooks in the United States, she assured me I was mistaken. “We don’t see macroeconomic stability as an end in itself. We don’t believe in the maintenance of stability at any cost. Rather, we think of it as a medium through which we can achieve all the rest of the policies of the government. We can achieve these policies without distorting the economy. Starting from this vision, the Morales government has been able to achieve an extraordinary level of macroeconomic stability since it assumed office, indeed stability without precedence in the country.” She paused for emphasis. “Every year we’ve run budget surpluses, we’ve accumulated substantial international reserves, and inflation has been controlled at every moment, apart from a brief deviation from this trend.”

Amid a commodities boom driven by China’s dynamism, aggregate economic growth has been steady in Bolivia, averaging 4.8% between 2006 and 2012, with an apex of 6.1% in 2008 and a low of 3.4% in 2009, in the immediate fallout from the world crisis. The first quarters of 2013 have witnessed 6% growth, with above-average projections for the year as a whole from even the likes of the International Monetary Fund (IMF). Growth has been maintained in spite of a general and accelerating decline in mining-mineral prices at the international level since April 2011, with the prices of lead dropping 10%, tin 14%, and silver 28% in 2013 alone.

Living on Gas

Bolivian growth hasn’t suffered thus far because natural gas prices and regional demand for gas have been moving in the opposite direction. The export of natural gas to Brazilian and Argentine markets continues to outpace all other national exports. Between January and May 2013, the value of external sales of natural gas reached $5 billion, up 15.6% relative to the same period in 2012. According to figures from the National Statistics Institute of Bolivia, gas exports constituted 52.8% of total exports in the first trimester of this year, followed by industrial manufacturing (24.2%), mining (17.2%), and agriculture (4.5%). Last year, the country logged a record peak of foreign direct investment, again mostly in gas. The Morales era, as Prada Tejada rightly notes, has witnessed an unprecedented accumulation of international reserves, and inflation rates have been clamped at levels that would keep Milton Friedman resting peacefully in his grave.

The general development strategy, according to Prada Tejada, is to “take advantage of the possibility of growth through the exploitation of natural resources, with the state capturing the surplus and redistributing it to social programs and to other economic sectors that generate employment.”

Indeed, Morales has been able to capture a bigger share of the rent generated from this commodities boom than did orthodox neoliberal regimes of the past, due to moderate increases in the taxes and royalties exacted from multinational petroleum companies, even if this doesn’t warrant the label “nationalization.” As a result, there have been notable declines in poverty and extreme poverty, and improvements in health and education.

One redistributive channel of rent to the poorest sectors has been a series of targeted cash-transfer programs, which now reach roughly a third of the population — Bono Juancito Pinto (funds to encourage children to attend school), Renta Dignidad (a small monthly payment to the elderly poor), and Bono Juana Azurduy (funds to improve healthcare for expecting mothers, as well as medical care after birth). Official government figures suggest an impressive fall in poverty from 60.6% of the population in 2005 to 45% in 2011, and extreme poverty from 38.2% to 20.9% over the same period. Rural areas have been most affected, with extreme poverty falling from 62.9% in 2005 to 41.3% in 2011.

Unsurprisingly in this context, the government is popular. In a poll of the major cities conducted in June of this year, the administration’s nationwide approval rating was 54%. In El Alto, the indigenous shantytown that borders the capital city of La Paz, support sits at 66%. And, for the first time, just under half the population of Santa Cruz — historically the national heartland of reaction and white supremacy — approves of the government, even though it’s led by the country’s first indigenous president. Indeed, Morales as a personal figure is more popular than his administration as a whole, enjoying an extraordinary 73% approval rating in El Alto, and 51% in Santa Cruz.

The right-wing electoral opposition remains in a shambles. Samuel Doria Medina, a multimillionaire, leads the National Unity Front, the main political expression of the Right at the national level. Across the country, National Unity captured a dismal 21% approval rating in the same poll, notably failing even to inspire its natural base in Santa Cruz, where a meager 28% of residents expressed support. For its part, the center-left party Movement Without Fear, led by former La Paz mayor Juan del Granado, split from a long alliance with the government in 2010. It is presently going through internal elections to establish its candidate for the 2014 presidential race, but no one is expecting much of a challenge to Morales from this camp, as its geographic influence doesn’t extend much beyond the capital and its immediate vicinity.

Interlocking Layers

In his recent book The Rule of Law as Tyranny, Luis Tapia, one of the great interpreters of Bolivia’s most influential twentieth-century Marxist René Zavaleta Mercado, and now a left-wing critic of the Morales government, provides a moving cartography of the series of overlapping and intertwined social cleavages that cut across Bolivian history.

First, there is a structure of cleavages of a national or colonial type. Within this type there is, on the one hand, a division on a world-scale between the impoverished country of Bolivia and the various manifestations of neocolonial power arrayed above it. On the other hand, and still within the national-colonial cleavage, we encounter the internal colonial division between the economically and politically powerful light-skinned descendants of the Spanish colonizers, and the historically oppressed indigenous majority of workers and peasants. Bolivia is one of only two countries in Latin America — the other being Guatemala — where the indigenous population survived the conquest as a majority.

A second structure of cleavages, for Tapia, is rooted in the uneven economic development of capitalism. This includes the combination of different modes of production, capitalist and noncapitalist, over the course of Bolivian history. Also within this capitalist cleavage, there is the specific formation of the Bolivian working class since the late nineteenth century, which occurred on top of and through the already long-established internal race relations.

A third and final structure of cleavages is constituted through the competing ideological currents and clashing conceptions of culture and nation that grew out of and informed the evolution of the colonial and capitalist axes of power.

These myriad forms of domination and oppression, I discovered, are captured in a single frame through the architecture, geography, and sociology of the World Bank offices in the upper-middle-class neighborhood of Sopocachi, in central La Paz. I arrived in late June for my morning appointment with a senior economist of the Bank’s Bolivian operations. I’m cleanly shaven, nicely dressed, and packing my University of London credentials and Canadian passport. At the base of one of only a few skyscrapers in the city, I detail my intentions and offer up my various papers to the indigenous Aymara security guard at the reception desk.

His hand is marked with the familiar tattoo indicating service in the military. In Bolivia, this is an ostensibly obligatory component of citizenship, but the wealthy consistently and openly buy their way out. The elevators are unlocked and I make my way up to the skies. The office space is mostly glass, but the receptionists and secretaries sit behind a slightly discolored, transparent, seemingly bulletproof shield, and address newcomers through speakers. I’m ushered into the waiting area, and eventually into a meeting room. Two light-skinned Bolivian economists arrive and we’re served coffee and tea by an indigenous woman.

The city of La Paz, the highest capital in the world, is situated in an Andean valley which once was a giant lake. Ascending the mountainous walls of the valley, the poor build their brick or adobe houses, often without legal permit, and therefore always subject to the whims of the state. The higher the altitude, the more precarious the earth, the thinner the oxygen, and the gustier the winds. The poor live high. The poorest live in El Alto, a shantytown where 82% of the population identify as indigenous. It sits on the high plain, or altiplano, directly above the valley, and is contiguous with the capital city. On the top floors of the opulent bank offices, you’re almost face-to-face with the escalading networks of poor barrios running down to the city center.

Colonial Banking

I give my professional card to both Bank officials, and while I begin the interview addressing the senior economist, I notice in my periphery that the junior one starts surfing the internet on his tablet. I’m sure he’s going to find my research profile and that this meeting will sour quickly, but he remains mute for the formal part of the interview, and I am able in the end to conduct the process without hiccups.

What strikes me immediately is the Bank’s overwhelming esteem for the macroeconomic management of the Morales administration. “Our overall evaluation of the economic record of the Bolivian government is very positive,” the senior economist notes. “We are living through a cycle of growth that begins, in fact, before the first government of Evo Morales, really as far back as 2003, but then accelerating in 2005 and 2006. So we’re in a cycle of almost ten years of growth, something we haven’t experienced in Bolivia for decades. With careful macroeconomic administration on the part of the government, within a spectacular external environment, this has permitted economic growth and, more importantly, a reduction in poverty, as well as a reduction in inequality.”

This generic praise then concentrates on Morales’s record of fiscal austerity. “Since data has been recorded,” the Bank official emphasizes, “we have never had a situation in which for several years there has been a consistent budget surplus, as there has been since 2006. This is unheard of in Bolivia; it’s absolutely atypical. This has resulted in a situation in which the public sector is receiving more than it is spending, which has meant an increase of savings for the government steadily since 2006.”

Similarly noteworthy has been the “enormous accumulation of international reserves by the Bolivian state, flowing from massive sales of gas and mineral exports. This has led to a huge flow of dollars, and thus the growth in international reserves.” If this weren’t enough, the Bank sees reason to celebrate the financial sector as well. “The banks have never had a situation so healthy. They have grown incredibly.”

Against this overarching environment, the World Bank has been able to build a close working relationship with the Morales administration, indeed one far closer in some ways than that with its predecessors. “The years immediately prior to 2006, as a result of political uncertainty and the rapid changing of presidents that we experienced, the work of the Bank in Bolivia had been reduced dramatically,” according to the economist, “because basically there was no one definitively in government with whom to develop a strategy.” Morales assumed office in 2006, after the overthrow by way of mass protests of neoliberal presidents Gonzalo Sánchez de Lozada in October 2003, and Carlos Mesa Gisbert in June 2005.

According to the Bank official, the initial contact with the government was “timid” because “we were new partners who still didn’t know each other.” But since that time, “we progressively moved closer in our relationship, with a lot of openness and flexibility on the part of the Bank. And so, very significantly, already by November 2006 we had established a two-year strategy with the new government,” which defined key development priorities and the pillars of cooperation between the two entities.

Since then, among other agreements, a medium-term strategic accord between the Bank and the government has been arrived at which will last until 2015. The thirteen World Bank projects now active in Bolivia have ushered in over $500 million, two-thirds of which are geared toward “improving productivity in rural development,” according to the official. The rest of the funds are geared toward infrastructure projects like road and highway development, as well as urban development initiatives.

A June 2012 IMF report on the financial institution’s consultation process with the Bolivian government echoes the World Bank’s accolades: “Prudent macroeconomic policies, accompanied by strong terms of trade, have allowed Bolivia to achieve impressive economic results over the last several years.” If the Morales government is initiating a long transition away from capitalism, and is in confrontation with imperialism, it would appear that for now, at least, it has the most powerful international financial institutions on board.

While speaking to World Bank officials in La Paz, I was taken back in time to a debate in London I participated in on Venezuelan politics immediately after the reelection of Hugo Chávez in October 2012. One of the other speakers, virulently anti-Chávez, was an economist from the conservative Economist Intelligence Unit. After attacking Chávez’s record for what he took to be inflationary populism, he wistfully pointed to Bolivia’s regime of austerity and macroeconomic stability as a model for reasonable and rational Latin American governments to emulate.


When I asked Prada Tejada about the weaknesses of the economy from a self-critical government perspective, she suggested that “one is the extent to which we’ve been unable to rupture fully with the preceding neoliberal model. Neoliberalism was introduced in this country through the Presidential Supreme Decree 20160 in 1985. Our government has abolished this decree. But neoliberalism only started with this decree, and from that basis, developed for over twenty years, resulting in an entire juridical and policy structure, and forms of thinking that are still with us today — the idea, for example, that there really is nothing possible beyond neoliberalism.”

Because the MAS government did not come to power “through a violent revolution or armed struggle,” Prada Tejada maintains that “we continue to live alongside the structures of the old state. The bureaucratic logic of these structures has not been broken.” This leaves Bolivia “in a situation with two competing systems: the old one that has not finished dying, and the new one that has not yet been born. And, unfortunately, the old one has a tremendous historical weight and legacy on the present.” In sum, she explained, “it’s not possible to change the neoliberal model overnight.”

A parallel narrative is maintained in an interview I did during the same week in June with Manuel Canelas, a member of the editorial board of the new left-wing magazine El Desacuerdo. Canelas is one of the sharpest journalists critically defending the broad parameters of the present government, and his conceptualization of rupture and continuity parallels in many respects the prolific analytical writings of vice president Álvaro García Linera. There is a dance in Canelas’s thinking between certain theoretical abstractions rooted in Latin American Marxism and critical European social theory on the one hand, and a resolute pragmatism when it comes to economics on the other.

“Morales’s assumption to office in 2006 marked a sharp change in the country,” Canelas argued. “The new government was able to unify two imaginaries that have run in parallel form throughout the history of the Bolivian left, and indeed the Latin American left. One is associated with the national-popular, from the period of import-substitution industrialization and the first populisms in the region, and the other is indigenism. In the 1960s, 1970s, and 1980s there weren’t many points of coincidence between the two in Bolivia or Latin America generally. José Carlos Mariátegui is the Latin American theorist who historically tried to deal with this most thoroughly, but as vice president Álvaro García Linera has pointed out, the more traditional Marxism of Latin America had a limited epistemology in terms of being able to understand the question of ethnicity. The political project of the MAS incarnates both of these imaginaries in the figure of Evo Morales.”

I mentioned to Manuel that I agreed that these two imaginaries played a fundamental role in the 2000–2005 left-indigenous insurrectionary cycle, whether or not we could agree that they have been ultimately embodied in the person of Morales. But how does this story of rupture correspond to political-economic realities when we return to the concrete from these various abstractions? I pointed out to him what I took to be an apparent distance between García Linera’s radical speeches abroad to audiences of the international left, as in the recent Left Forum plenary in New York, and what is actually being carried out in terms of economic policy within Bolivia by his government.

“I read this as a practical response to the realities on the ground in Bolivia,” Canelas stressed. “But what I read as pragmatism, others, for whom I have a great deal of respect intellectually, read as cynicism. I think García Linera has an appropriate blend of a long-term vision of radical change and a short-term vision that responds to the material realities of the country. He wouldn’t last two days in power if he tried to implement today his discourse at Left Forum, because it’s plainly evident that the social base of the MAS much prefers South Korean development models to Cuban ones. . . . Beyond ethically irreproachable platforms, if you govern, you need to improve the conditions of life of the people.”

Canelas was tired of what he and García Linera take to be facile, idealistic critiques coming from some quarters of the Bolivian left, which ostensibly don’t take into account the material obstacles to transitioning out of neoliberalism, much less capitalism.

The conversation reminded me of the one I had with Prada Tejada, a dialogue peppered with literary references to the works of Eduardo Galeano and expositions of Marx’s theory of primitive accumulation. I didn’t doubt her ideological commitment to transforming Bolivia’s economy. But what exactly are the early signals of any structural transition to a new model? What are the basic rhythms defining development in Bolivia under Morales, and what can we say about their relationship to the colonial, capitalist, ideological, and ecological cleavages that have run through Bolivia’s history?

When pushed, Canelas acknowledged that a story of rupture does not really work when it comes to political economy. “In spite of certain exaggerations in statements on the economy by the government, we are absolutely not living in any kind of postcapitalism, because given the realities we’ve inherited it would be impossible to try to do so,” he says, returning once again to the realism of this view, as compared to what he sees as the utterly idealist forms of critique coming from the radical Bolivian left. “More than that,” he sums up, “what we’re living through are very classical processes of modernization and economic development.”

Getting Primary

The prominent Uruguayan political ecologist Eduardo Gudynas provides a different set of clues for unpacking the present Bolivian moment in his analytical interventions on the “new extractivism” of center-left governments in South America. He positions the Morales administration and others directly within the logic of endless accumulation and expansion. In 2010 and 2011, South America achieved an average growth rate of 6.4%, with Paraguay hitting 15%, Argentina 9.2%, and Uruguay 8%. As we have seen, after a dip in 2009, Bolivia’s economy picked up again in 2010, 2011, and 2012, and even jumped to 6% in the first part of 2013.

Dynamics in South America and across the world market have set off a concerted shift towards the acceleration of mining, oil and gas extraction, and agro-industrial monoculture throughout the continent.

In other words, the uneven mutations of the ongoing world crisis have not resulted in low growth rates on an aggregate level across South America — at least not yet. Similar to the orthodox neoliberal period, massive multinational corporations are deeply imbricated in the extension of extraction at the heart of this commodity-led growth everywhere in the region. Those cases in which center-left governments have entered into joint contracts between state-owned enterprises and multinationals, and negotiated relatively higher royalties and taxes on these extractive activities, are no exception.

Skimming from the rent generated, many South American governments have established what Gudynas terms “compensatory states,” whose legitimacy rests on the modest redistribution achieved through the priming of often pre-existing cash-transfer programs to the extremely poor, without touching the underlying class structure of society. Indeed, the reproduction of these political economies depends on states prioritizing the maintenance and security of private property rights and juridical environments in which multinationals can profit.

Because the legitimacy conferred by relatively petty handouts runs on the blood of extraction, the compensatory state increasingly becomes a repressive state, on behalf of capital, as the expansion of extraction necessarily accelerates what David Harvey has called accumulation by dispossession, and the variegated forms of resistance it regularly spawns.

These have been precisely the parameters defining the ongoing political crisis of the Territorio Indígena del Parque Nacional Isiboro-Sécure (TIPNIS) in Bolivia. Morales’s greenlight in 2011 to a decades-old plan to build a highway connecting Villa Tunari (in the department of Cochabamba), north to San Ignacio de Moxos (in the department of Beni) through an indigenous territory and national park was the catalyst of crisis in this instance. The TIPNIS highway conflict has set off indigenous marches by those asserting their right to self-government and prior consultation before any development project is planned and executed.

The government in turn has sponsored counter-demonstrations, as well as police repression of the opposition, who it claims is manipulated, even led, by foreign NGOs and the domestic right. While there is evidence that American interests and the Bolivian right have sought to intervene in the crisis to their own ends — as they will always do given the opportunity — the organic character of the movement’s core is difficult to dismiss even by the most blinkered government loyalists. It is worthwhile to note, too, the presence of voices within the TIPNIS indigenous marches that have been critical of their organizations’ leaderships for being insufficiently attuned to the Right’s attempts to co-opt their struggle.

But the steamrolling of the rights to self-governance of indigenous communities resisting highway construction through their territory illustrates the coercive wing of the compensatory state in action. Indigenous self-government in Bolivia is to be de-fended by Morales, it would seem, only when the claims are to territories marginal to the state’s development project.

Canelas disagrees. “In the case of the TIPNIS,” he told me, “I have a lot of friends who broke with the government. What worries me,” he continues, echoing almost to the letter the administration’s line, “is that if you have the material conditions that we have in Bolivia you can’t have the environmental vision of Switzerland. It’s a country that is incredibly poor. And there’s a correspondence in this country between the absence of highway infrastructure and poverty. A political party that took up a political-ecologist stance of not developing the TIPNIS, and not developing petroleum, and I don’t know what else, would never win even five thousand votes in this country. From academia, it’s more or less easy to propose theoretical incoherence between the statements and practice of the vice president, but it’s another thing if you have to govern. You have to respond to the social base of the country, and what they will support, and so you have to be more conservative.”

Dunia Mokrani and Pilar Uriona reject this kind of politics of ultimatums in the latest issue of Latin America’s most important journal of critical sociology, Observatorio Social de América Latina. In the context of the Morales government’s vilification of TIPNIS protesters, “it becomes increasingly difficult to develop a dialogue that does not negate the legitimacy of demands for the improvement of the material conditions of life of the most vulnerable populations in Bolivia, while at the same time not rejecting as illegitimate the choice of indigenous peoples to preserve their territories and strengthen their own systems and forms of authority and decision making. This also needs to be recognized as absolutely valid.”

The compensatory state, according to Gudynas, co-opts and coerces in response to such signs of opposition, and builds an accompanying ideological apparatus to defend multinationals — an ideology in which communities of resistance are vilified as internal enemies acting in concert with, or even in the pay of, various instruments of imperialism. The discursive gestures of state officials, of course, safely set to one side the obvious imperial character of the dispossessing activities of multinational corporations — now called “partners” rather than “bosses” in development — within the matrix of the new extractivism.

The logic of extractivism has its particular expressions in the Bolivian case. In regards to natural gas extraction, it’s worth remembering that in the first administration of orthodox neoliberal Gonzalo Sánchez de Lozada (1993–1997), the Bolivian state attempted to extend the area designated for gas exploration and exploitation to approximately thirteen million hectares. When this initiative was defeated through indigenous resistance in different areas of the Amazon, the multinational petroleum corporations were forced to concentrate on their mega-gas fields in the south of the country, above all in Tarija.

At the end of 2011, however, Morales had taken up this bit of the defeated mantle of Sánchez de Lozada, and proposed the extension of gas exploration and exploitation to roughly twelve million hectares — an area four times as great as that in 2009. Of this area, close to 50% was conceded entirely to multinationals. New government measures introduced in 2012 will likely significantly increase this area, bringing the level of extraction of gas in the country to unprecedented levels.

Likewise, in mining, spokespeople for the Morales government have announced initiatives for the large-scale expansion of mining activities beyond those in the traditional zones of the altiplano, or western high plateau, where mining has been underway since the colonial era. Much of this new mining will involve opening new frontiers into the Amazon.

Similar to other cases of dispossession from Mexico to Chile, the geographies being encroached on in Bolivia for extending gas and mineral extraction, together with the growth of agro-industrial production (the majority of which is soya production under the control of Brazilian capital), include protected areas of biodiversity and indigenous territories which are currently among the last regions of the country relatively free of industrial and commercial activity, and which are, at the moment, governed by ecologically sustainable economies. It is the logic of accumulation by dispossession at the heart of this tripartite process — mining, gas, and agro-industry — that has generated the TIPNIS conflict, and which will generate many more socio-ecological conflicts into the future.

I met with Pilar Uriona on this same trip to Bolivia. In addition to being a member of the Bolivian committee of the OSAL editorial board, and acting as the coordinator of the Bolivian left and workers’ archives for the Amsterdam-based International Institute of Social History, she is one of Bolivia’s most creative socialist-feminist theorists. “There is undoubtedly this context of the pressures of the external market and Bolivia’s dependency,” she told me when I asked her about continuities of extractivism under Morales, “but I don’t believe in the idea that there are no alternatives. We are capable of experimenting with different modalities of self-sustenance.”

It angers her that radical critics are often represented in the steady condescension of government rhetoric as infantile ultra-leftists who just can’t understand the material obstacles to real economic and ecological change in the present moment. “In any case,” she noted, “the question has never been whether the extraction of natural resources is good or bad in its totality, but rather the question is one of sustainability. We have to take advantage of our natural resources to meet our needs, but we also need to set limits on this exploitation, and these limits need to have some association with our discourse. If you’re going to say that you are not going to damage Mother Earth, there are limits to continuing with extractivism. Obviously we are integrated into the international market based on our hydrocarbon and mining industries, but there are limits to this model of development, where the immediate economic benefits run up against our future, our environment, our quality of life: the component parts of the idea of buen vivir, living well, one of the discursive ideas of this government. At what point does the government’s commitment to neo-extractivism contradict this commitment to buen vivir? I don’t believe that we’re so dependent on the external environment that we are incapable of saying no to Brazil over the construction of a highway running through TIPNIS, or that we can’t negotiate so that highways are developed elsewhere.”

The Laboring Classes

A glance at the condition of the laboring classes in the context of the primary commodities boom provides more reason for concern. Between 2010 and 2011, for example, the first year of the second Morales administration, unemployment experienced a small drop of one point to 7.9%. The drop was associated, according to economists at the left-wing think tank CEDLA, to conjunctural factors such as a spike in commerce and construction and an increase in public investment resulting in more social-service employment. At the same time, the industrial manufacturing sector was shedding workers. This is indicative of a more general trend in which new demand for jobs tends to be concentrated in non-unionized, temporary contract work, with low skill and even lower pay.

The economists at CEDLA also examined rates of underemployment, which they see as having visible and invisible components. Visible underemployment occurs when people are obligated to work fewer hours than the normal working day, while invisible underemployment occurs when individuals receive a salary or wage that is insufficient to cover the cost of goods indispensable for survival. Underemployment of these two kinds grew to 17% of the working population in 2011.

The Morales government has advertised its successes in improving the minimum wage over its period in office, but these claims, according to CEDLA, generally fail to take into account rising consumption costs, and particularly the rising cost of basic food items over the same period, which have spiked above the rate of inflation. For the poor, who spend a much bigger proportion of their income on food than the rich, this is a vital point. Meanwhile, both minimum and average wages in Bolivia remain the lowest in Latin America.

Natural gas and mining, the real pillars of the Morales extractive strategy, still accounted for 18% of total GDP in 2011, well above agriculture (9.78%) and manufacturing (7.78%). But in neither economic sector do the most technologically advanced, capital-intensive, privately-owned components produce much employment. As a result, one celebrated feature of Morales’s approach to mining has been a strategic alliance with the so-called cooperative mining sector, which does account for a significant number of jobs. As Kirsten Francescone and Vladimir Díaz note in their penetrating study of cooperative mining in Bolivia, for all the attention the nationalization of the Huanuni mine received early in the Morales administration, the total state-owned mining sector employed only 6,186 workers by 2010. Cooperatives, by comparison, employ 65,828 workers, while other large and medium non-cooperative private mines account for 7,297 workers.

The interests of the cooperative sector are represented at a national level through the National Federation of Cooperative Miners (FENCOMIN). Their influence in the current government is re-flected in the fact that the first Minister of Mines for Morales was Walter Villarroel, a former president of FENCOMIN. Current MAS senators Efraín Condori, Pascual Huarachi and Andrés Villca were presidents of FENCOMIN between 1998-2000, 2005-2006, and 2006-2010 respectively. The current Vice-Minister of Cooperative Mining in the MAS government, Isaac Meneses, was president of the cooperative federation of the department of Oruro. It is perhaps unsurprising, then, that as Francescone and Diaz document, of the 879 private mining concessions granted in the country between 2008 and 2012, 514 went to the cooperative sector. In geographic scale, the sector went from controlling 73,000 hectares of concessions in 2008 to 216,000 hectares in 2012. The total number of cooperatives in operation grew from 447 to 1,400 over the same period.

While the term cooperative has an egalitarian ring, the reality is that this system is organized across an extremely stratified array of social groups, at the top of which is an emergent bourgeoisie in control of medium-sized entities, and, still higher up the food chain, now very large private enterprises. These, in turn, are in the majority doing contract work for private international mining giants, who purchase significant amounts of the minerals extracted from the cooperative sector and commercialize them outside the country. Because of their unique juridical status, cooperatives pay few royalties and no taxes to the state.

What is most important, however, for any profile of the laboring classes, are the lower layers of the cooperative order — the new informal, precarious, contracted-out proletarians. These workers are exploited in the extreme, and often under conditions reminiscent of the colonial period. Within cooperatives, monthly salaries don’t exist. Pay varies according to what each worker is able to extract, usually utilizing virtually no modern machinery, in a fixed amount of time. Normally the pay is terrible, given the fact that many are working in mines that have long since been tapped dry of their riches. In those cooperative mines that have been the subject of investigation, scarcely 16% of the workforce receives any social security in addition to pay.

The lack of mechanization, technology, and coordination of the work in the cooperative mines creates hazardous environments. The lung disease silicosis is rampant in the workforce, as are rheumatic disorders stemming from exposure to toxic gases. Indelible damage to body posture from the confined mining areas is a common problem, while exposure to massive extremes in temperature is at the root of other health problems. Risk of death due to uncoordinated explosions, mine collapse, and exposure to toxic gases is a constant worry in workers’ lives. While many cooperative miners work an eight-hour day, there are regular reports of working days lasting up to sixteen hours in some cooperatives. The participation of children in this workforce is also high, and has been denounced by the International Labour Organization.

A government describing itself as socialist might be expected in the face of this reality to be transitioning toward the extension of the state-owned mining sector along with the expansion of worker and social control in these entities. But the Morales government has consistently supported the growth of the cooperatives, while simultaneously pushing forward a new mining law which it hopes will attract higher levels of investment from foreign multinationals.

It’s no surprise, then, that in May, through the initiative of the Bolivian Workers Central (COB), state-employed miners went on a strike for better pensions and salaries that lasted over two weeks, and shut down highways with roadblocks as well as closing the mines themselves. They were met with police repression and ideological defamation campaigns by the vice president and other representatives of the government as right-wing enemies of the “process of change.” That strike is over, with minor concessions granted to the workers, but the negotiations between the COB and the government on pensions continues unresolved.

Gramsci in Bolivia

Increasingly, critical Latin American theorists are returning to Gramsci’s notion of passive revolution in an attempt to conceptualize the processes of containment occurring in many South American states presently occupied by left governments.

For the Italian-born, Mexican-based theorist Massimo Modonesi, for example, the South American passive revolution today involves a process of modernization pushed forward from above, which partially and carefully recognizes demands coming from those positioned below; through this process, the state managers guarantee more the passivity and silence of the popular movements than their complicity.

New state-society relations are built up by these regimes, creating precarious but surprisingly lasting equilibriums that function for the reproduction of extractive capitalism amid an expansionary period in commodity prices. At the top of the new configuration of power rests a charismatic populist alongside the institutional mechanisms of bureaucratization.

In the Bolivian case, Tapia has perhaps done more than most to advance this argument. He tries to understand how a radical left-indigenous insurrectionary process that overthrew two neoliberal presidents through mass mobilization was contained and redirected into the consolidation of a state-capitalist process of modernization from above, built on an alliance with multinational capital interested in extracting natural resources during a commodities boom.

The recent commentary of Raquel Gutiérrez Aguilar is another expression of the Left’s attempt to wrestle with this phenomenon. Gutiérrez was born in Mexico and studied philosophy and math before becoming deeply involved in the struggle of exiled Salvadoran members of the Farabundo Martí National Liberation Front (FMLN) in Mexico in the 1980s.

Taking a page from the FMLN, Gutiérrez went to Bolivia in the 1980s, becoming a founding member of the Tupak Katari Guerrilla Army (EGTK), together with her then-partner and current Bolivian vice president Álvaro García Linera. After accompanying the Aymara and Quechua indigenous insurgencies of the late 1980s and early 1990s in the western highlands, she spent five years imprisoned in Bolivia. When she was released, she was briefly a member of the left-wing Bolivian intellectual collective The Commune (which also included Tapia and García Linera, among others). Gutiérrez then returned to Mexico to write up a doctoral thesis in sociology on the left-indigenous insurrectionary period.

She was in Buenos Aires in late June, and while there discussed contemporary politics in Bolivia and Ecuador with an Argentinian journalist: “What is obvious is that in those countries where social mobilization was strong, the predominance of the interests of the most powerful transnational capital remains in place, and indeed appears to have ‘captured’ the state forms that have been rebuilt after the shock of the last decade . . . as in Ecuador or Bolivia, where indigenous peoples again and again have to defend their territories against the imposition of politics without their consultation, while their lives are threatened by new forms of looting — while, in South America, supposedly this is being advanced for the well-being of these same indigenous peoples.”

As the recent sociopolitical eruptions on an in-credible scale in Dilma Rouseff’s Brazil attest, however, the comfortable turnover of passive revolution is hardly guaranteed. Since Morales began his second term in office, the contradictions between the different social movements historically aligned with his program and the ruling state managers have been intensifying.

The so-called gasolinazo in December 2010 witnessed urban popular revolts against an austerity measure ending subsidies to domestic gas consumption. A series of strikes and conflicts in the mining sector has sharpened the gulf separating the interests of state-employed miners and the elite who control the cooperative sector, and is increasingly forcing the Morales government to make its class commitments clear. The TIPNIS conflict, more than any other, has challenged the government’s claims to be building a plurinational state, one attuned to the historic demands for self-governance by the different indigenous nations within Bolivian territorial space. Indeed, TIPNIS seems to have revealed the weight of the logic of the regular accumulation of capital in Bolivia in the current period, and the state’s commitment to reproducing the necessary conditions underlying that accumulation.

Politically, the chasm between the government’s rhetorical commitment to revolutionary transformation and its practical developments in economic policy has begun to wear not only on the alliances between social movements and the state, but also within different sectors of the governing party itself. Major figures representative of the party’s most left-wing and anticolonial components have abandoned ship, or been forced out in recent years, including Lino Willca, Román Loayza, Félix Patzi, Alejandro Almaraz, Alex Contreras, Raúl Prada, Gustavo Guzmán, and Pablo Salón. Furthermore, Canelas reported ongoing conflicts — some verifiable, others still political rumor — between the powerful Foreign Minister, David Choquehuanca, and Vice President García Linera, which reached peaks in internal debate within the government over the gasolinazo and TIPNIS. While an electoral challenge to the Morales administration from the Left is unlikely to garner much support in 2014, the near future is likely to see the amplification of those already visible tensions.

The dispiriting reaction of the Morales government so far has been to more rigidly coordinate the movements of the popular Andean peasant organizations that remain loyal, and to delegitimize critics on the Left as reactionaries in disguise, even while forging closer electoral linkages with formerly right-wing opposition forces in Santa Cruz.

It’s all some distance from the “twenty-first-century socialism” Western commentators laud.

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Jeffery R. Webber is presently a senior lecturer of international political economy at Goldsmiths, University of London. He will take up a new position in the Department of Politics at York University, Toronto in January 2020. His latest book is The Last Day of Oppression, and the First Day of the Same: The Politics and Economics of the New Latin American Left. He is presently at work on The Latin American Crucible: Politics and Power in the New Era, under contract with Verso.

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