Mediators step in

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Sep 17th 2008
From the Economist Intelligence Unit ViewsWire

An escalating political crisis in Bolivia


Responding to an escalating political crisis in Bolivia, nine heads of state from the 12-member Union of South American States (Unasur) met in an emergency meeting on September 15th in Santiago, Chile, to voice their support for the embattled president, Evo Morales. The nascent regional entity also promised to send representatives to try to mediate between the government and opposition governors in several eastern provinces, where protests against the government have intensified, leading to at last 30 deaths in recent days. In the midst of these tensions, La Paz’s relations with the US have also deteriorated, with Mr Morales ordering the departure of the US ambassador.

Opponents to Mr Morales’s promised constitutional referendum, which he intends to hold in January, have gone on a rampage in the last two weeks, taking over state offices and confronting and often humiliating the military in the streets. Determined to win greater autonomy for these lowland provinces, which produce the bulk of Bolivia’s natural-gas and agricultural wealth, they are essentially seeking to make the country ungovernable and weaken the president. The provincial leaders view his socialist-oriented constitutional reforms, which provide for redistributing more of Bolivia’s wealth to poorer citizens, among other changes, as illegitimate. They also oppose the government's decision last year to keep a portion of local oil and gas revenues for national projects such as a universal old-age pension.

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On September 8th Mr Morales responded to the protests by shaking up his cabinet. However, no key ministers have left, and the move has failed to impress dissident regional leaders or opposition supporters. The president has also offered direct negotiations with the governors of the provinces. Still, the violence has intensified.

The difficult situation looks set to worsen as the government remains steadfastly opposed to making any changes to its constitutional project. Mr Morales feels justified in this resistance, given the fact that 67% of Bolivian voters confirmed him in office in a national recall referendum held on August 10th (The dissident governors were retained in office by a similar margin.)

Now pro-Morales groups are threatening to invade lowland areas and to mount a blockade of major opposition-held cities, which would bring yet more violence. In a bid to retake the initiative the government expelled the US ambassador in Bolivia, Philip Goldberg, on September 11th. Mr Morales and his ministers have frequently accused the US embassy in La Paz of providing covert financial and other support to dissident prefects and the opposition. However, the claims have never been substantiated.

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Will mediation work?
The meeting of the Unasur heads of state in Santiago was designed to defuse the crisis, but its effectiveness is uncertain. There are some questions about the credibility of Unasur, which critics say has usurped the role of Organisation of American States (OAS) and see as a tool of Venezuela’s radical president, Hugo Chávez, to increase his influence in the region. This casts doubt on the ability of the entity, created just four months ago, to positively influence events.

Further, tension between two rivals—Brazil and Venezuela—trying to take the lead in the mediation effort marked the six-hour meeting. While Brazil’s president, Luiz Inácio Lula da Silva, has tried to cool heads and rhetoric in the conflict, Venezuela’s Mr Chávez has offered to intervene militarily in the case of a coup against Mr Morales, an offer that has worried most leaders in the region. In the end, Mr da Silva played a decisive role in bringing the members to agreement on a series of principles to ease, if not resolve, the conflict.

New problems for Mr Morales also may emerge from the US government. Washington is deeply dismayed about the dismissal of its ambassador and the stream of anti-American rhetoric favoured by Mr Morales. It is also concerned about the government's liberal attitude towards coca growing, which has rebounded since 2006.

US diplomatic sources now talk of Bolivia being declared non-compliant in the war on drugs. This would result in an ending of US anti-drug aid to Bolivia. More worrying is the potential loss of thousands of jobs should the US fail to extend (or leave Bolivia out of) the Andean Trade Promotion and Drug Eradication Act (ATPDEA), which is due to expire at the end of this year. The ATPDEA grants duty-free access to the US market to a wide range of products produced in four Andean countries, including Bolivia. Several hundred exporting companies would be affected.

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Pro-government mobs have been protesting in La Paz, and have threatened to attack the US embassy, the offices of the US Agency for International Development and the homes of US personnel. The families of US diplomats and related parties are being evacuated.

Although the current political crisis is unlikely to lead to a demise of the government, there is a risk of ongoing and increased civil disorder, which would make the already severely polarised country increasingly ungovernable. This is despite the good efforts of Bolivia’s neighbours in Unasur. There would also be heavy economic costs if the situation were to deteriorate further. Officials of the state energy company already have accused protestors in the province of Tarija of being behind a gas pipeline explosion that cut 10% of the country’s natural-gas exports to Brazil. This could cost Bolivia US$8m per day in lost revenue and about US$100m to repair the damage, officials say.