What the MAS victory means for Bolivia

With the election yesterday in Bolivia, the ongoing political crisis that has griped the country for the last year since the “coup” of October 2019 finally seems to have been resolved. While the official results have not been announced from the election, the exit polls say that the Movimiento al Socialismo (Movement to Socialism) decisively won the election in the first round with 52.4% of the vote, compared to the Comunidad Cuidadana (Civic Community) which garnered 31.5% and Creemos (We Believe) with 14,1%. I expected that the MAS would either barely win the election with the required 10% margin over nearest competitor in the first round, or it would lose in the second round, because all the other parties would unite against the MAS to form a majority.

Either way, I expected that 25% of Bolivians on one side or the other of the political spectrum would refuse to accept the results of the election, and we would have another round of protests and marches with the highways being shut down and no food in the markets, just like happened last October in the previous election. Before this election, I noticed that the price of food was rising in the markets and some people were stocking up in anticipation of a crisis.

With the MAS winning so convincingly in the first round, everyone basically has to accept the results, especially since the opposition is in charge, so it is hard for people to claim that the MAS committed fraud to win. This is an enormous relief for me because it means that we won’t suffer through months of political turmoil that I fully expected based on what happened in the previous election.

What most bothered me about last year’s election is the fact that the Organization of American States (which is heavily stacked with representatives that are opposed to the MAS) declared that election fraud had been committed without presenting clear proof to back up its claims. Four different groups (an NGO in Washington and 3 academic studies) analyzed the election and said that they couldn’t find statistical evidence of fraud. Inside Bolivia, many MAS supporters were convinced that the US conspired to overthrow the government of Bolivia, whereas many supporters of the opposition were equally convinced that the MAS committed massive election fraud. Nobody could come to any consensus about what had actually happened, and there was no reliable investigation to determine the facts of the matter. The interim government had an entire year to investigate the supposed election fraud, but it didn’t bother, so people were free to imagine whatever fit their preconceived notions about what actually happened.

My personal belief is that the MAS did commit some fraud, but it was localized and not systematic and not directed from the top of the party, and certainly not enough to swing the election. What bothered me the most, however, is that the interim government actually took down the website with the election data, making it difficult to investigate whether fraud had occurred and there was no published data on the internet of previous elections to do a comparison over time.

As for the theory that the US plotted to overthrow the MAS, I think it is likely that the US government officials did work through the OAS to produce an unsubstantiated report claiming election fraud when they didn’t have the clear evidence to prove it, which is similar to the role that the OAS previously played in overturning a Haitian election when the US didn’t like the election results.

There is some evidence of the opposition meeting with US government officials before the election, but I suspect this was just normal lobbying in case they won the election, rather than coup plotting. I say this because I haven’t seen any evidence of clear US involvement before the October 2019 election, so this is not like the coup attempts where we have good evidence that the US was involved in Venezuela in 2002, 2003 and 2020, Honduras in 2009, and Haiti in 1991 and 2004. As far as I can tell, the US doesn’t have a compelling reason to want to overthrow the government of Bolivia, but the neocons in the Trump administration are hardly careful planners or rational actors (as shown by their ludicrous actions against Venezuela), so it isn’t outside the realm of possibility. Nonetheless, I suspect this is simply a case of US government officials in the OAS taking advantage of an opportunity rather than anything that was pre-planned. Academics are still arguing over whether the US government helped overthrow the government of Brazil in 1964 or not, so we may never have a definitive answer as to what exactly happened.

What I can say for certain is that the OAS report that led to Evo Morales being ousted was extremely light in evidence and long in its conclusions. The OAS never even released the names of the 34 so-called “experts” who were sent to Bolivia to investigate the election or even what countries they were from. In my opinion, their “clear statistical evidence of fraud” was basically non-existent.

All of that being said, I also think that Evo was violating the Bolivian Constitution by running for a third full term in office. The MAS had stacked Bolivia’s supreme court, which used highly dubious grounds to rule that Evo was allowed to run for another term, so I can see why the opposition felt justified in declaring his election illegitimate. Furthermore, a plebiscite vote before the court ruling found that the majority of Bolivians were against Evo being allowed to run for another term.

On the other hand, Evo won the election even though people knew that he was violating the constitution that prohibits 3 consecutive terms for the president. Regardless of what people think about Evo’s actions, I think it is clear that this needed to be handled internally, through the traditional means of organizing popular protests inside the country to throw Evo from power, which is normally how presidents are kicked out of office in Bolivia. It should not have been done through an external body like the OAS producing a report claiming election fraud when there wasn’t much corroborating evidence. Furthermore, the police and the military should not have taken part in forcing Evo, his vice-president and head of the senate from power, in what in my opinion fits the technical definition of a “coup.”

Two of my closest friends in Bolivia lost their jobs due to the change of government and endured a year of unemployment, so maybe this effects my thinking on the matter, because people who I care about were harmed by what happened. At the end of the day, however, the coup did prevent Evo from violating the constitution, and did give the opposition the ability to investigate any fraud that MAS party officials committed while in office, so it wasn’t an unmitigated disaster for Bolivian democracy.

I personally feel very conflicted about this whole situation, because on the one hand, I am deeply opposed to the MAS’s environmental and energy policies and its plans for development based on environmental destruction. Basically, the MAS gave Bolivia 14 years of economic stability and economic growth predicated on a massive increase in the extraction and exportation of natural gas and minerals and promoted massive deforestation. Bolivia got more years of stability and growth under the MAS than it has ever enjoyed before in its entire tumultuous history. It also got redistributive policies that benefited a large portion of the population, and massive investment in education, roads, rural health centers, etc.

On the other hand, that growth is totally unsustainable, and is now coming to an end as the gas reserves now only have about 8-10 years left and the deforestation is provoking changes to the Amazonian water cycle that are leading to massive forest fires. Some climatologists believe that the Amazonian basin is hitting a tipping point from the combined effects of deforestation, climate change and forest fires that could irreversibly change the water cycle and lead to the gradual die-off of the entire Amazonian rainforest. The largest source of biodiversity on the planet is under threat due to the policies of governments that care more about short-term growth than long-term sustainability.

Almost every one of my friends who is an urban professional voted for Civic Community, except my friends who had jobs in the MAS government or are promoters of indigenous rights. My fiance who is a veterinarian and all of my friends who are environmental activists voted for Civic Community. Given that I think climate change is the greatest existential threat to humanity, I should have wanted Civic Community to win. One of my personal friends is running as a senator for Civic Community and I very much wanted her to win, since she clearly understands the environmental threats facing Bolivia. However, I’m closer ideologically to the MAS than the CC, so I felt very conflicted this election.

As I see it, Bolivia faces some major structural challenges, and regardless of which party got elected, I don’t think any of the parties are prepared to face them. Because Bolivian gas reserves are running out, its economy and political system are facing major crises.

At this point, the Bolivian state is essentially bankrupt, and many of the redistributive programs that earned the MAS so much popular political support will no longer be possible in the future. The major problem is that not only are gas prices depressed for Bolivia’s exports to Argentina and Brazil, but Bolivia’s gas reserves are rapidly running out. Roughly 40% of Bolivia’s exports are natural gas, 25% are minerals and 10% are soybeans, and all three of those exports will be dramatically reduced in the future.

The natural gas exports are financing many of the government’s benefits (bonos) that are widely distributed among the population, plus the schools, which have enjoyed a massive increase in their budgets. The popularity and political support that the MAS party enjoys largely depend on the largess and social programs that the party was able to finance through natural gas exports. Those same exports were also able to pay for massive subsidies for fossil fuels. Before the coronavirus caused a drop in fuel prices, roughly 90% of the price of natural gas in Bolivia was subsidized and 60% of the price of gasoline and diesel was subsidized. Bolivia’s cheap energy helped fuel the growth of the Bolivian economy for the last decade and a half, but it is totally unsustainable. Roughly 80% of Bolivia’s electricity is generated by burning gas and the number of private automobiles in the country tripled in 12 years, partly due to the gasoline subsidies.

As Bolivia’s gas and oil reserves run out, the state will have to eliminate these subsidies, which will generate massive social protests, because they will cause the price of everything to rise, from food to bus fares. The biggest single expense in the extraction of minerals and the production of agroindustry and beef is diesel fuel, which means that when the fuel subsidies are cut, these industries will become much less competitive with international prices and their exports and profits will fall.

In other words, Bolivia will suffer a massive cut in the majority of its exports at the same time that the state has to cut back its social spending. By winning the election, the MAS party has been handed a poison pill and its current popularity in the polls probably won’t last long once it starts cutting the fuel subsidies.

More problematic is the fact that the Bolivian state and its private sector won’t have the resources to deal with the major structural problems in the economy that absolutely must be addressed. Bolivia simply has to stop its policy of deforestation to stimulate the production of agroindustry and cattle raising if it wants to have a stable water cycle in the Amazonian basin and avoid the ever increasing forest fires that are decimated larger and larger portions of its land every year.

The soybean producers, coca growers and large-scale cattle ranchers are all potent political forces inside of Bolivia and newly-elected President Luis Arce Catacora is unlikely to confront any one of these groups to detain the deforestation and chaqueo (the practice of burning agricultural fields before planting) that are changing the water cycle in the Bolivian lowlands. Because President Jair Bolsonaro unleashed a massive wave of deforestation in Brazil, Bolivia is now particularly vulnerable to dramatic changes in precipitation and drought in the Amazonian basin.

The second structural problem that Bolivia faces is a looming energy crisis. When the Bolivian state was flush with cash from its natural gas exports, it wasted its profits on new hydrocarbon exploration and the building of massive gas thermoelectric generation plants, instead of investing in alternative energy. Now that the Bolivian state is bankrupt and the economy is in a recession, Bolivia has to find the funds to transition its economy to renewable energy, because its fossil fuel reserves are running out and it won’t have the exports to pay for importing fossil fuels when it can no longer export gas to Argentina and Brazil. 80% of Bolivia’s electricity, which currently comes from burning natural gas, will have to be replaced with wind, solar, hydroelectric and geothermal over the next decade, but it is unclear where Bolivia will get the funds for such a massive investment. Likewise, Bolivia will have to massively reduce its consumption of gasoline and diesel if it expects to have any balance of payments, as its exports fall in the future. Investing in the electrification of transport will be very difficult in a country whose economy is contracting.

Bolivians love to spin fantasies that they will find the next extractive boom to continue fueling their economy just like silver, tin and natural gas financed their economy in the past. Many Bolivians believe that lithium will be the next extractive cycle that will revive their economy after the gas wells run dry, but that is a fairy tale that the MAS party has been peddling for the last decade. Bolivia has 60% of the world’s lithium reserves according to some estimates. Nonetheless, lithium from Bolivia’s Salares de Uyuni and Coipasa will never be competitive with the lithium extracted from the salt flats of Chile and Argentina, because its lithium concentrations are much lower, it has much higher levels of contaminants like magnesium that are expensive to remove, its evaporation rates are much lower requiring more energy consumption, and its transportation costs are higher. Even if new extraction techniques can be invented that take less of a toll on the environment, it is hard to see why international mining companies would choose Bolivia, when Chile and Argentina offer better prospects, and lithium extraction is increasingly moving to spodumene mining in places like Australia.

Once Bolivia’s gas reserves run out, it will no longer have the foreign currency to keep importing gasoline and diesel, and it will have to eliminate its subsidies for fossil fuels. Since diesel fuel is the largest single input for the mining industry and agroindustry, and Bolivia’s geography imposes high transportation costs, a 60% price rise in diesel will make minerals and soybeans much less competitive in international markets. In the long term, the world will face a shortage of the minerals that Bolivia produces, but Bolivia is going to be much less competitive in the short term due to its higher production costs than other countries. What this means is that Bolivia will suffer a massive decrease in its exports of natural gas, minerals and soybeans in the next decade. For a nation accustomed to 15 years of a rising standard of living based on increasing imports, the new economy based on limited exports and imports will be a bitter pill to swallow for many to swallow.

Many Bolivians voted for the MAS, believing that that it would return the country to the good times with over 5 percent annual economic growth since 2005, but no political party will be able to recreate that growth. Bolivia is facing a looming energy crisis that demands massive investment in alternative energy and an ecological crisis which demands a ban on all future deforestation. At the same time, the country’s economy will be contracting and the state will have less revenue from gas exports to meet these demands.

Sadly, the Bolivian press has done a very poor job of covering these issues, and there was virtually no discussion of the structural problems facing Bolivia in the recent election. None of the parties really have plans to address the serious issues facing Bolivia, nor the political will to implement the measures that are needed. Trying to stop deforestation and raise the price of fossil fuels are paths to political suicide for Bolivian politicians, but they are necessary for the long-term sustainability of the country.

All of that being said, the recent election has at least gained Bolivia some needed political stability for the next couple years and a government that will resist IMF structural readjustment policies and neoliberalism that have destroyed the economies of so many developing nations around the world. I don’t see much new thinking in the MAS party, so I’m not very optimistic that it will address the structural problems that plague the country.

On the other hand, the MAS party now has such a large majority in the legislature and is so unassailable politically, that it can afford to consider politically-risky measures like confronting the deforestation caused by the largest cattle and soybean producers and fining their activities. Sadly, I don’t foresee Bolivian civil society forcing the MAS party to consider these sorts of measures, but 1.6 million hectares of Bolivia just went up in flames and the forest fires were even worse last year. At some point, the Bolivian people are going to start questioning the MAS Party’s development plans based on increasing deforestation, and hopefully that will happen sooner rather than later.

1 thought on “What the MAS victory means for Bolivia

  1. Mark J Kropf

    A very extensive note for an issue that little Is likely to alter. Quite universally, news has eroded its capacity and perhaps its desire to contest for an all-inclusive view of the needs and concerns of its people. This has occurred at the same time that any consideration for politicians on any part of the spectrum to speak truthfully has become passe and the standards for presentation have eroded to the same state as what many would see as the predating descriptions given on-line: fantastical and unrealistic projection of both plans and of past performance.
    Truth and Reality are not dead. They are merely living in exile. They communicate to the citizenry from remote parts at irregular intervals to reflect the daily lives and views the unfortunate voters grasp between campaigns and elections.

    Like

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s