archivos de los protestos globales
archives of global protests

Bolivia's president doesn't know whether to stay or go
The Democracy Center On-Line
Volume 62 - March 19, 2005

Dear Readers,

Bolivia is once again in the midst of a political roller coaster. For two weeks the nation's President has alternately threatened to resign from office, stay, resign, and then declared once again that he'll stay. We get up each morning to see who might be President that day. It is a bit like Bush-Gore 2000 without hanging chads.

Below is an article in which I attempt to sort the whole thing out, and especially to explain that, as with Bolivian turmoil for the past two years, the real issue is oil and who profits from it. The story changes daily so if you are interested in staying abreast, keep an eye on The Democracy Center Blog at:

Jim Shultz

The Democracy Center


Should I stay or should I go now?
If I go there will be trouble
An' if I stay it will be double
So come on and let me know.
-- The Clash

Here is how I imagine it. Sitting alone in the Presidential Palace, Carlos Mesa rests his gray bearded chin warily into his hands next to his monogrammed cuffs. He listens over and over again to the lyrics of a bootlegged Clash CD that he surreptitiously picked up on a lunchtime walk down La Paz's main street. He ponders his choices.

Okay, maybe it isn't happening this way, but for the last two weeks Bolivian politics has been thrust into a roller coaster ride of declarations from the President alternately declaring that he is resigning and then that he is not. If he isn't hooked on The Clash by now he might as well be.


Bolivia's latest political drama began on Sunday night two weeks ago (March 6th) when the telegenic newscaster-turned-President went on national television to announce to the country that he was submitting his resignation to Congress. Blaming primarily the social movements on the political left that had blockaded roads to press their demands that foreign oil companies increase their payments to the country, Mesa told the nation, "I cannot continue to govern besieged by a national blockage that strangles the country."

Immediately political speculation began over the question - Does he mean it?

No major political force in the country, from left, right or center, was asking him to step down. In fact voices from all corners, including from some of his sharpest critics, called on him to stay. Many dismissed it as a political ploy designed to provoke outbursts of support for him and if that was his intent it worked magnificently. The plazas of the major cities filled with people calling on Mesa to stay. The Congress rejected his resignation unanimously and agreed to meet his call for action on a new gas law and other issues.

Mesa looked stronger than before and Bolivia looked like it had dodged falling off a political cliff. Then apparently the President went back and listened to The Clash some more.

Last Tuesday the President upped the stakes and called on the Congress to schedule new national elections for next August, for President and Congress - a full two years ahead of the schedule set by the Constitution. Absent such an agreement, Mesa declared again that he would resign.

The Congress, citing the fact that they couldn't just ignore the Constitution and none too eager to surrender hard-won political victories two years ahead of schedule, rejected Mesa's demand and speculation began again over who would become President. The Senate leader next in line had already said he wouldn't take it and fears of a military takeover seemed like more than a paranoid fantasy.

Then Thursday night at 11pm, Mesa apparently switched off his Clash CD and told a small group of reporters still assembled outside his office long after most Bolivians had gone to bed that he was staying. "I am not going to hand over the Presidency to someone who doesn't have the legitimacy of the vote. For this country...I want to guarantee that I will not leave you abandoned."


Onlookers from abroad might look at this Bolivian political roller coaster and wonder to themselves, "What the hell is going on over there?" It would not be an unreasonable question. It doesn't take much of a hard look to find the answer though - it is all about oil, who controls it and who is going to earn how much as it gets developed for export.

Bolivia is, simply put, in the midst of the political endgame over a new oil and gas law that will shape the country's economic future for decades to come. Until the 1990s Bolivia owned its oil and gas reserves, which are vast. Foreign oil companies like Shell, Enron, and British Petroleum had contracts to get the petroleum out of the ground, processed, and to market and they split the take 50-50 with the Bolivian government, which received almost 40% of its treasury from oil revenue.

Then the IMF, World Bank and other cheerleaders of market fundamentalism sold the government (with a dose of coercion as well) on privatizing gas and oil, cutting back Bolivia's take to 18% with the promise that by giving the companies a bigger stake production would leap and the national oil revenue would actually increase. A decade later Bolivia's economic bet proved to be a failure. Production increased but Bolivia's oil revenue remained stagnant and even fell when taking into account the new petroleum taxes passed on to Bolivian consumers.

It was no big surprise then that, in October 2003, when then-President Gonzalo Sànchez de Lozada was cutting a deal to export Bolivian gas to California, he sparked a major civic rebellion. That ended with his resignation and US exile after 53 people were killed during government repression aimed to break the protests.

Enter Carlos Mesa, Sánchez de Lozada's Vice-President. A respected Bolivian historian and journalist, when Mesa's took over the red, yellow and green Presidential sash Bolivia entered a moment of hope. He pledged to put the nation's gas and oil policy to a popular vote, the country's first ever popular referendum. He did so last July, with a set of questions so widely open to interpretation that the 90% plus yes vote could be construed to mean anything from dancing with Shell and BP to retaking the oil fields. Flawed as it may have been, for nearly two years Bolivia's political process has been debating these issues without the violence of the past, a credit to Mesa and opposition leaders like Evo Morales as well.

So what constitutes a fair deal? Social movements here are demanding a return to a 50/50 split with the foreign companies, akin to what Bolivia had before privatization. The corporations reject such proposals and are applying heavy pressure on Bolivian officials to conform to their wishes.

Corporations in these situations like to warn that they will abandon a country if taxed beyond their liking. Mesa himself warned of this "cry wolf" game himself, when I interviewed him just before he assumed the Presidency:

The great alibi, the great argument of the multinational corporations is legal security. The moment that you change your tax rules you are changing the rules of the game that establish the possibility that those companies will come and invest in Bolivia. With another set of rules that isn't predictable, they say, "We wouldn't have risked coming here. This would demonstrate tat this isn't a serious country and would send a signal - Don't come and invest in Bolivia because they say one thing and do another.

Back then Mesa didn't buy the oil companies' claims. Today he is caught in the middle and is trying to split the baby in half with a combined royalty and tax scheme that claims to get Bolivia 50% of the take but which is so complicated and riddled with loopholes that no serious analyst thinks it will get the country close to receiving half the profits buried under its ground.


To be sure, Mesa is stuck between a rock and a hard place, trying to deal with demands from both the social movements and the corporations.

Bolivian social movements, from what I can tell, have broad public support for their demands for a 50/50 oil and gas law but are generating more and more public anger against them through the protest tactics they are using to press that demand. Road blockades have become, lamentably, a protest tactic used for every occasion.

When the citizens of Cochabamba blocked roads five years ago to take back their public water system from Bechtel, those blockades had huge support, despite the disruptions people suffered as a result. Today blockades are costing the nation's sickly economy millions daily, with tales of rotting banana crops that can't be shipped to market, people cutoff from food supplies, and travelers stuck on buses for a week unable to either come or go.

Nelson Mandela once reportedly said, "You don't choose your tactics, your opponents do." There may well be a case that only tactics as drastic as road blockades can counteract the power of the foreign oil companies but the human, economic and political cost is extraordinary. I wonder sometimes if the social movements wouldn't be better off leaving the roads wide open and shutting down the airports. They could tell the nation's elite, "You can still travel as you need to about the country, just take the bus like everyone else." A flurry of missed meetings and a couple of all night rides across the frigid altiplano might get their attention.


Trying to see into the crystal ball of Bolivia's political future is getting hard these days, calling forth that famous line attributed to Yogi Berra, "It's tough to make predictions, especially about the future." For now it appears that Bolivia's gray bearded President is here to stay a while longer, promising some interval of stability although suffering from a new reputation as a bit of a flake. The lower house of the Bolivian Congress has passed a version of the gas bill that comes pretty close to a 50/50 split with the foreign companies - enough to win support from the powerful Movement Toward Socialism political party and to draw threats of legal action from the corporations. The Senate takes up the bill next, promising to make some sort of changes that await to be seen.

Meanwhile the foreign companies and their advocates continue to press the importance of having a stable investment environment, as defined by good deals for the companies, negotiated in private, enshrined in law, and protected when needed by military or police action. That has been the recipe for years in Bolivia and it has come to one President being forced out of office and another flip-flopping over whether to resign.

A stable investment environment is important. Who wants to have millions of dollars sunk into a country with politics that are unpredictable? The one lesson the companies seem to be missing, unfortunately, is that in the theater of Bolivia's wild political instability, Shell, British Petroleum and the others aren't innocent bystanders sitting in the audience, they're producing the play.

bolivia | (archives) |