Socialist View (Summer 2006) - Bolivia: Morales takes on the oil & gas companies

The workers, peasants and indigenous people of Bolivia are in the throes of a vital struggle centring on the question of ownership of the country’s natural resources. It’s implicitly a struggle against the centuries of imperialist domination in which the systematic raping of Bolivia’s rich natural resources has ensured that the majority of Bolivians languish in desperate poverty.

In the early 16th century the conquistadors robbed tin and silver. More recently multinational corporations have been creaming exorbitant profits from the country’s oil and gas industry, with the state receiving just 4% of the commercial value of its gas production for example. (Guardian 4 May 2005)

Bolivia is the poorest country in South America in which the richest 10% of the population have an income one hundred and forty-three times greater than the poorest 10%!

Indigenous people, the Aymara and Quecha Amerindians, who account for almost two-thirds of the population, are particularly oppressed. For example about 40% of the non-indigenous population, in comparison to 16% of the indigenous population have access to water.

The indigenous majority has effectively been ruled by an oligarchy of European descent. This was broken when the left-populist candidate Evo Morales of MAS (Movement Towards Socialism) received a resounding mandate becoming the first ever indigenous president. His election raised the hopes of the masses who elected him on the basis of his promise to challenge multinational control of Bolivian hydrocarbons through limited nationalisation. Simultaneously it unnerved the US ruling class whose interests are threatened by a continent-wide revolt against the effects of neo-liberalism epitomised by Chavez in Venezuela.

On May Day 2006, Morales announced the 28 701 decree that “nationalised” oil and gas reserves. As the Bolivian army entered 56 facilities unfurling banners announcing “Nationalised – belongs to the Bolivian people”, jubilant crowds marched in support of the measure – many of whom felt was late in coming. Jose Lopez, a Santa Cruz native told a reporter “For the 100 days of his rule, Evo didn’t do the things he said he would. But this was much better. Now everyone is behind him again.” (Guardian 6 May 2005) Morales may have ornately dressed the decree up as his gift to the masses, but in reality pressure from below necessitated the move. A trade union led struggle for nationalisation of hydrocarbons, the “gas wars”, Bolivia and has already forced two presidents to resign. This movement is a direct outgrowth of neo-liberal privatisation policies of the 1980s and 1990s. Morales’ party, MAS has largely been a bystander and certainly to the right of this struggle that has involved general strikes, mass mobilisations and an uprising in October 2003 in which 60 demonstrators were massacred by the police.

In reality, Morales’ 28 701 decree stops far short of nationalisation. It does not entail the expropriation of multinationals. Morales is giving the multinationals 180 days to renegotiate their contracts. According to the decree, the state-run oil and gas company, Yacimientos Petroliferos Fiscales (YPFB) which was decimated during the 1996 privatisation process, is to be rejuvenated. This privatisation process is not set to be fully reversed, with YPFB to enter into joint ventures with 51% of shares, with the five companies that were sold during this privatisation. Instead of paying the criminally low taxes from before, multinationals will be forced to pay a 32% tax increase, bringing total taxes to 82%. However, this only affects the biggest gas fields – despite the fact that the government’s television advertisements imply it affects them all. Other companies will continue to pay tax of 50%. The revenue generated from the tax increase is likely to be spent on buying the majority stake in the five aforementioned companies – thus effectively returning the money to the multinationals.

Despite the limited nature of Morales’ action on control of hydrocarbons, the reaction from international capitalism has been one of rabid outrage. BG Group, the British oil and gas company, has threatened to pull out. Even Morales’ halfway nationalisation has brought him inevitably into conflict with the multinationals. Although Bolivia has been a source of cheap hydrocarbons, the extent of multinational investment, $3.5 - $2 billion since 1996, is not enormous. Morales is engendering fear in the ruling class because now Chavez in Venezuela, who has carried out some reforms that have benefited workers and poor and have threated imperialism’s interests, and who has paid lip-service to the idea of building “Socialism in the 21st century”, is not an isolated phenomenon. Morales and MAS’ role in the movement has been characterised by an attempt to isolate the most radical sections of workers and activists. However, the enormous pressure that has been and will continue to be exerted on Morales from the Bolivian masses on the one hand, and from imperialism on the other, may serve to push him further to the left, and Morales may be forced to carry out more significant reforms than he ever intended.

On coming to office, he halved his own salary, a move justifiably welcomed the workers and poor masses. His radical rhetoric clashes with his subservient reassuring of business interests. During the elections, the populist Morales described himself as the candidate “of the most disdained and discriminated against”. After the May Day “nationalisation” Morales declared that “the pillage of our natural resources by foreign companies is over”. His Vice President Garcia Linera went further proclaiming that “the government of the people, the government of the workers, has taken the most important decision of this century: this is the first nationalisation of the 21st century.” Since coming to office, Morales has already reneged on promises to teachers and other workers on pay increases, and has presided over the suppression of a strike of airport workers seeking nationalisation of the airline. After his election, Morales visited Venezuela and Cuba and has since signed a trade agreement with the two states. He also visited Spain and Brazil, two of the biggest investors in Bolivian hydrocarbons, and took the time to reassure the multinationals that he was not a threat to their interests. The Spanish oil company “Repsol” has $800 million invested in Bolivia, so in Madrid Morales promised a “symbolic nationalisation” only. He differentiated between “good capitalism” and “bad capitalism”, adding that “Spanish companies can play the role of foreign investors like a motor for development, with a stable market, but combining it with social progress”.

Just like US capitalism, Spanish capitalism cannot play a “progressive” role in Bolivia. Under the confines imposed by imperialist exploitation, the majority of Bolivians workers and peasants are doomed to face lives of poverty. Despite the wealth of natural resources that the country possesses, vestiges of landlordism still remain intact in this economically backward country. Vice President Garcia Linera has talked of MAS’ vision to develop “Andean Capitalism”. In an interview with the Journal of Bolivian Business he addresses a question over whether MAS will be a socialist government unambiguously. His answer – “No, no way, because it’s not viable. It’s not viable because socialism can only be built on the base of a strong proletarian presence…you don’t build socialism on the base of a family economy; you build it on the base of industry, of which there are none in Bolivia”.

In effect, Garcia Linera is arguing the Stalinist two-stage idea of revolution, believing that initially the tasks of the National Revolution of 1952 need to be completed under capitalism, and later to move to socialism. In the Theory of Permanent Revolution which he applied to Russia in 1917, Trotsky explained that in backward, neo-colonial countries, the indigenous ruling class are weak and incapable of completing the tasks of the bourgeois democratic revolution such as industrialisation and solving the national question, because they are inextricably bound up with imperialism. Three quarters of Bolivia’s GDP in under the control of imperialist corporations. Bolivia cannot progress without breaking these ties and it’s only on the basis of a socialist economy that this can occur, namely the taking over of the different major industries under workers’ control and management according to a socialist plan of production. Such measures would inspire workers throughout Latin America and a workers’ and peasants’ government should have the perspective to help the spread of revolution, leading to a voluntary, democratic federation of socialist Latin American states.

Garcia Linera also fails to see the significance of the small, but powerful working class of Bolivia. It has enormous social weight due to its concentration in industry, and also has a proud tradition of militancy and struggle which is illustrated by the fact that in 1946 the Miner’s Union adopted as its programme an application of Trotsky’s Transitional Programme. The trade union federation COB is particularly critical of Morales’ shortcomings and the most advanced layers of workers are prepared to take to the streets should he deviate from promises made. Morales is by no means immune from the fate of a myriad of previous leaders whose demise was precipitated by the workers and poor masses taking to the streets. The lack of a revolutionary party, with a base in the trade unions, armed with a socialist programme is the key factor impeding the development of the struggle of Bolivian workers and poor to its logical conclusion. Socialists internationally must welcome all measures that benefit the workers and poor in Bolivia but point out that when such reforms are carried out under the confines of the capitalism and imperialist domination, the regime is always susceptible to counter-reform and counter-revolution.

The imperialists and local ruling class will be prepared to use any means to maintain their domination, including in the case of Bolivia, the prospect of civil war to gain independence for the and resource-rich region and home of the wealthy elite, Santa Cruz. The future for Morales’ regime is open. For certain, his heretofore accommodation with the multinationals, and simultaneous promises to satisfy the thirst for change of the Bolivian masses cannot be reconciled and cannot be maintained.