EDITOR’S NOTE: President Gonzalo Sanchez de Lozada resigned late Friday—after this article was written—following massive demonstrations in La Paz. His replacement, former Vice-President Carlos Mesa, said he would heed the demands of the Indians, who comprise the largest segment of South America's poorest nation.
LA PAZ, Bolivia--Bolivians don’t know what’s good for them, declared the editors of the New York Post. Citing widespread opposition and protest to a proposed deal to export Bolivian natural gas to California, the paper observed: “And right now in Bolivia—the poorest country in all of Latin America—there are people fighting to remain poor.”
The broad opposition to the proposed gas deal is not fueled by stupidity. Ordinary Bolivians have not stood before armed soldiers because they just don’t understand the subtleties of global economics. At work is a conflict between the country’s two very different populations, one glowingly rich and the other abjectly poor.
The real issue in the “gas war” is how Bolivia should integrate itself into the global economy—who will win and who will lose.
Two hundred miles away from the eye of the conflict in the capital city of La Paz lies the small city of Potosi and behind it the small mountain “Cerro Rico” (Rich Hill). For 300 years, from the mid-1500s to the mid-1800s, this single hill of silver bankrolled the Spanish empire. Millions of Bolivian Indians and slaves died extracting the silver for the Spanish. Here is a history written into the Bolivian soul—a country that sat atop one of the greatest sources of mineral wealth in the history of the planet ended up being the poorest in South America.
Today the nation’s newest and probably last “Cerro Rico” is a mammoth underground reserve of natural gas that the government is planning to harvest, in association with a British-backed consortium, Pacific LNG.
To Bolivia’s wealthy elite and their allies at the International Monetary Fund, the deal looks like a financial boon for a country that could very much use one. Average Bolivians see an unfolding repeat of the theft of the nation’s silver.
“The money will all just end up in the pockets of the president, the ministers and other politicians,” says Lourdes Netz, a former Roman Catholic nun. “Look at all the public companies that have been privatized. Have the people benefited?” First give us political reforms so we have a government we can trust, many Bolivians say. Then we can cut the gas deal.
For 15 years, Bolivia has been the main South American lab rat for the pro-privatization, unfettered-market theories of the World Bank and the International Monetary Fund. The results have been disastrous. The economy has been in a crisis for half a decade.
In 2000, Bolivia obeyed World Bank orders to privatize the public water system of its third-largest city, Cochabamba. This led to a takeover by Bechtel, the California engineering giant, massive rate hikes on the poor, and a civic rebellion that forced Bechtel to leave.
Last February, when the International Monetary Fund sought to impose a belt-tightening package, citizens revolted and were met with army tanks. Thirty-two people were killed. Now, once again, Bolivians are being shot in their streets for the crime of confronting an economic model imposed from abroad and which they don’t believe in.
There is another element of remembered history to the current conflict over gas. Pacific LNG wants to ship the gas out of landlocked Bolivia through its Pacific coast neighbor, Chile, a proposal that runs into deep, century-old national resentment over Chile’s seizure of Bolivia’s last remaining access to the sea in 1879. School children here are still taught that the nation must reclaim its ocean. For many Bolivians, the thought of giving such a big prize to Chile, without a sea access deal in return, is unacceptable.
At least 75 people have been killed by the army since the conflict began. According to eyewitnesses and coroner’s reports, most of them suffered gunshot wounds at point-blank range. One soldier was reported killed by his superior when he refused to fire on a crowd.
President Gonzalo Sànchez de Lozada, elected with 22 percent of the vote a year ago and now supported by less than 10 percent of his people, has earned a new nickname: “The Butcher.” The focus of the protests has now shifted from gas to a demand that the president resign.
His vice president and key members of the government have already broken with him over the massacres, but he insists on staying, branding calls for his departure sedition. This is especially ironic given that Sànchez de Lozada himself called for his predecessor, Hugo Banzer Suarez, to step down two years ago during a national crisis far less extreme than the current one.
It seems impossible for Sanchez de Lozada to regain anything near the credibility he needs to complete his remaining four years in office. But the U.S. Embassy and other powerful allies seem intent on keeping him in office.
Bolivia’s conflicts over the game plans for global economics did not begin with the gas war and will not end with it. Bolivians have taken to the streets because they know better—they want to seize control of their own economic future.
Jim Shultz is the executive director of The Democracy Center (www.democracyctr.org), based in California and Bolivia.