Bolivian Socialist Presidential Candidate: Last November’s Coup Was About Plundering Bolivia’s Resources

Luis Arce

Massive protests last month forced Bolivia’s postcoup government to pledge that elections will take place on October 18. But Luis Arce, presidential candidate for Evo Morales’s MAS party, told Jacobin that democracy is still in danger, with powerful private interests standing to gain from the continuation of the current regime.

Luis Arce delivers a speech in November 2015. Wikimedia Commons

Interview by
Denis Rogatyuk
Bruno Sommer Catalan

It’s been delayed three times already, but it seems like Bolivia’s repeat presidential election may finally go ahead next month. After the latest postponement sparked mass protests by trade unions and social movements, Jeanine Añez’s post-coup government was forced to sign a law guaranteeing that the contest will go ahead on October 18. But the mass rallies and blockades that paralyzed nearly all of Bolivia’s nine regions in August were also a symptom of a much larger problem — the collapse of what was until recently Latin America’s fastest-growing economy.

Under Añez’s “interim government,” Bolivia has effectively retreated into the neoliberal wilderness that preceded Evo Morales’s presidency. Unemployment skyrocketed to 11.8 percent in July (from 3.9 percent in 2019), poverty is expected to increase by at least 7 percent this year, while extreme poverty is projected to rise by 4.5 percent, as economic growth plummets by 5.9 percent. While this partly owes to the effects of COVID-19, the government’s response to the crisis in fact epitomizes its agenda. It has failed to initiate social programs to financially assist the population, even as it presses on with privatizing key sectors taken back into public hands by Morales’s government, including the communications company ENTEL and the hydrocarbon producer YPFB.

Most shocking has been the “Ventilators Case” (Caso Respiradores), concerning the Añez government’s purchase of hundreds of ventilators from Spain, China, and other countries at prices far above their manufacturing cost. This did, however, bring in millions of dollars of kickbacks for the members of the government itself. The case is but one example of a mass web of corruption and nepotism that has sprawled since the November 2019 coup against Morales.

In this context of gross economic mismanagement, the figure of Luis “Lucho” Arce Catacora stands in stark contrast to the coup government and its allies. The soft-spoken economist is best known in Bolivia and beyond as the architect of the “Bolivian miracle” — the fourteen years of steady economic growth, massive reduction in poverty and inequality levels, combined with programs industrializing the country’s natural gas, oil, and lithium industries. Today, he is the presidential candidate for Morales’s Movement Toward Socialism (MAS-IPSP) party.

Finance minister in Morales’s government from 2006 until the November 2019 coup, he oversaw the nationalization of the hydrocarbon industry, the establishment of a number of social programs, the recognition of the “social-popular” sector of the economy, and a significant rise in the minimum wage. Lucho’s running mate, David Choquehuanca, arguably represents the other side of MAS. He is close to the country’s formidable social movements, as well as the political tradition of Suma Qamaña — the Aymara variant of the “Good Living” indigenous political philosophy that also forms the foundation of Rafael Correa’s Citizens’ Revolution movement in Ecuador.

Lucho sat down with Denis Rogatyuk and Bruno Sommer Catalan to discuss the challenges MAS faces ahead of October’s planned election — and the prospect of a victorious return to power.

Denis Rogatyuk

Under Evo’s presidency, Bolivia advanced enormously in economic and social terms. But all that changed during the last ten months of the de facto government, with the application of neoliberal reforms and the return of the International Monetary Fund (IMF). What economic damage has this government caused since the coup last November?

Luis Arce

Like many countries in the region, Bolivia had twenty years of neoliberalism. And the results [of its return] have been catastrophic — as could be expected.

Even before the pandemic, in the period from November to March, we already saw GDP growth fall by 1.1 percent for the final quarter. We were growing well, above 3.5 percent, but collapsed to 1.1 percent growth in the fourth quarter, which made it possible to achieve just 2.2 percent growth for the whole of 2019. This is a fundamental example that already shows us the effect of neoliberalism. In the first four months of the administration [of Jeanine Añez], the economy shrunk by 5.6 percent.

This has to do with the fact that they displaced the social, community, productive economic model that we had developed and implanted in Bolivia since 2006, with economic and social successes that are widely recognized even by international organizations.

In addition to the practical elimination of public investment — and the paralysis of our public companies — there is the fact that the state’s income has been destroyed. This was achieved through the coup government’s very generous policy of returning favors to certain businesses, letting them off paying taxes and granting them much more favorable conditions. The state does not collect the same revenue as before. So, we face serious economic problems for municipalities, for governorates, and for public universities, which all enjoy some share of this tax income.

This is very much contrary to what [MAS] did. We generated economic surpluses from public companies and natural resources in order to redistribute them among the Bolivian population.

Instead, what we are now seeing is a truly regressive policy — typical of neoliberal governments — of concentrating income in a few hands. This has produced a fall even in people’s bank deposits. Poverty has increased, unemployment is increasing, and the gap between rich and poor — which cost us so much to reduce — is increasing once again.

So, the Bolivian people are feeling in their pockets, in their stomachs, the measures that have been undertaken since November last year. And added to this is the government’s inability to handle the pandemic. It has abandoned Bolivians to their fate: Bolivians have had to look out for ourselves and try to take care of ourselves with traditional medicines because [the de facto government] did not even guarantee the supply of medical products to combat the pandemic in pharmacies. But it did guarantee private clinics everything necessary to be able to face the pandemic.

Another element that has caught our attention is the government’s inability to handle the educational issue. We are the only country in the world that has decided to end the school year in the middle of the year simply because of the inability to teach in another way. After failing to implement an online education policy, they have already decided to end the school year. This shows their utter inability to administer a subject as simple as the schools.

Denis Rogatyuk

I’d like to discuss your proposed new wealth tax, which seeks to raise an additional $400 million for the industrialization project. What exact levels of wealth are we talking about here?

Luis Arce

First, you have to understand some different approaches, because we have taken several in the campaign to boost the Bolivian state’s revenue.

Because of this government, we are running out of income. There was a poor negotiation of gas volumes and prices with Brazil, and Petrobras [the Brazilian state gas and petroleum company] is involved in the administration of our state company.

It has been revealed that one of the active participants in the coup was the current Brazilian government. This was exposed not by MAS but by the Conade [National Committee for the Defense of Democracy] through its representative Waldo Albarracín, who was the rector of the Universidad Mayor de San Andrés. He revealed that the Brazilian ambassador was present at the meeting where Áñez was elected as president, bringing together all those who overthrew the MAS government. We can understand why — basically what they wanted was to get a price cut of $70 million annually for the gas they transport to Brazil.

The truth is that, even apart from the issues I mentioned, Bolivia has no income. So, we must find a way to find resources to reactivate and rebuild the Bolivian economy. To that end, we propose various measures, of which two are especially important.

One is a two-year non-payment of capital and interest on foreign debt to our creditors in the international organizations — meaning, the Inter-American Development Bank (IDB), the World Bank, the Development Bank of Latin America (CAF), all the international organizations where we are shareholders. We want them to give us a debt grace period of two years so that we can all bear the crisis in a more or less equitable way.

Additionally, we have proposed a tax on big fortunes. This will, in fact, impact one of the individuals in the current government — Mr Samuel Doria Medina, [a multimillionaire] who is vice-presidential candidate for Añez’s Juntos coalition. But it will not affect Bolivians who have accumulated the kind of wealth which translates into a little house, a car, a small business. We are not interested in that.

Our policy is to continue the income distribution policy that we have proposed since 2006, to continue developing a more equitable tax system, and, through that, to impose a tax on those who have a lot of assets. In percentage terms, this is going to affect 0.01 percent of the Bolivian population. That means people with a wealth of $10 million, $20 million and above — 99.99 percent of the Bolivian population is not in that band of big fortunes.

But there are also people who have a lot of money which they accumulated thanks to the state and the country’s natural resources. So, we believe it is fair that those people who have become rich in our country pay a higher tax to help those who do not have it. What the state is going to do is collect all those resources to carry out social policies that benefit the poor. It’s a policy of fairer taxation that we have also seen implemented in several other countries.

Denis Rogatyuk

Do you think Bolivia would go through a debt renegotiation process similar to what happened in the case of Argentina recently?

Luis Arce

Bolivia has been paying its debt on time, we have no problem with payment. But what we want is that the international organizations of which Bolivia and other countries, also suffering from the pandemic, are shareholders — the CAF, the IDB, the World Bank, the IMF itself, in short, many international organizations that have been supplied by resources from ourselves — also provide their owners, their shareholders, with part of the profits.

That means relief for the countries that have borrowed from these international organizations. Our proposal is two years’ grace on paying the capital and interest on loans. For Bolivia, that would mean a saving of $1,600 million that could be used to reactivate the economy, to generate better conditions and, therefore, little by little to exit the crisis.

Denis Rogatyuk

And what role will lithium play in the industrialization process, given that this was also one of the reasons behind last year’s coup?

Luis Arce

The lithium issue is very clear. We are the only political party that guarantees that natural resources, including lithium, will not be privatized and handed over to transnationals. Evidently, the economic objective [of the coup] was the control of lithium. Mr Samuel Doria Medina himself has said that it would be very good for Tesla to come to industrialize Bolivian lithium — thus revealing that they were behind the coup last November.

We are not going to be negotiating with transnationals in this way: we have very clear principles. We already made plans with a German manufacturer to come to Bolivia, and they agreed that the lithium battery should be made here, while they would be in charge of the commercialization and Bolivia would, of course, have the absolute majority of the profits of that business. This government put an end to that. But I believe that the population is alert to the issue and is not going to allow a transnational company of any nature return to Bolivia to exploit our natural resources.

MAS is a guarantee that lithium and all natural resources, including gas, minerals, will remain in the hands of the state. We are the only political party that guarantees the Bolivian people that not a molecule of our natural resources is going to be transferred so happily to transnational companies. Our policy proceeds through agreements where the state has an absolute majority in both the control over these businesses and the profits from them.

Denis Rogatyuk

We have seen unprecedented repression against workers in Senkata and Sacaba and persecution against former MAS ministers, activists, and people who criticize Áñez’s government. Do you think a “truth, justice, and reconciliation” commission is necessary, to rid the country of corruption, to punish the perpetrators of human rights abuses, and to compensate the victims?

Luis Arce

Unfortunately, in Bolivia there is a violation of human rights, especially the right of free expression. There are journalists who have denounced acts of corruption and then been threatened, persecuted, and intimidated by the ministries of the de facto regime.

They are closely monitoring social media, with so-called cyber patrolling. In short, we are under a modern dictatorship in Bolivia, with a government that is persecuting not only MAS supporters, but also journalists.

They are persecuting social organizations and social leaders who organized protests over various economic problems. And they are criminalizing the right to protest violations of the constitution.

That is why we want overseers to come to our country, so that they can see the improper use of state structures, the mass nepotism, the abuse against the humble by armed subversive groups. These groups are financed by the government, as in the 1980s, where there were paramilitary groups across Latin America that intimidated the population.

Unfortunately, that is what we are seeing with the motorcycle gangs of the Unión Juvenil Cruceñista [UJC, a far-right group in Santa Cruz]. And here in La Paz, they also want to do the same. In short, this is a very complicated situation to be doing politics. We do not have all the guarantees to do politics and carry out a transparent campaign that guarantees the rights of all of us involved in the campaign, or rights for the social organizations, who cannot protest for fear of imprisonment.

Regrettably, this makes us remember the times of Hugo Banzer’s dictatorship in Bolivia, the Augusto Pinochet dictatorship in Chile, or Jorge Videla in Argentina. In short, all that has returned, but in a very disguised way. The military may not be in the streets, but these are extremely repressive governments, with a use of power that goes beyond simply managing the state.

Bruno Sommer Catalan

Have you felt that your life is at risk because you decided to stand for the presidency?

Luis Arce

Of course. The day I arrived in Bolivia [from Mexico], precisely to participate in the elections, I was already notified that I had to defend myself in a trial in the prosecutor’s office the next day. I already have three or four trials that are being ordered against me, my family has also been intimidated. They really don’t pull any punches in intimidating and persecuting us, to make us regret even trying to challenge for political power. But I think that the Bolivian people have understood that we are determined to carry this process forward.

In October last year, many people mobilized, and for more than twenty-one days they blocked the country. Their slogan was to recover democracy — they said that Morales was a dictator. And now we have had nine months without democracy, a dictatorship. We clearly see that the slogan of democracy was a pretext to seize control over the state, to plunder the wealth that we had generated during this time, distribute it amongst themselves, hand over control of our natural resources once more, and pack the state with their own family members.

Denis Rogatyuk

We are concerned that there will be fraud in the elections on October 18. How can the international community and political and human rights organizations take measures to ensure that the process is transparent and democratic?

Luis Arce

The best way to do it is for [international observers] to come to my country as soon as possible and witness what is going on. There needs to be a proper audit of the Supreme Electoral Tribunal in all the tasks that it is undertaking.

But they demonstrated, by postponing the vote from May 3 to August 2 to September 6 and now to October 18, that they do not have the intention of holding elections in our country.

Therefore, we ask the international community to come, precisely to verify everything that is happening regarding the elections. They can become guarantors that the electoral process is conducted properly and that the political rights of each Bolivian to be able to turn out to vote — and the rights of the candidates themselves — are respected.

That has to happen now. For already today, we are seeing a series of abuses in this campaign. It’s essential that all these organizations, and the international press, don’t wait until October 18 to be in Bolivia. They have to come as soon as possible to witness what we Bolivians have been living through, so that the international community can have truthful information.

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Luis Arce is a former minister of the economy (2006–2019) in the government of Evo Morales and presidential candidate for the Movement Toward Socialism (MAS) in the upcoming elections in Bolivia.

Denis Rogatyuk works as a journalist and editor at El Ciudadano.

Bruno Sommer Catalan is a Chilean journalist and the founder of El Ciudadano.

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