WikiLeaks Bolivia cables: US admits 'economic roots of social revolution'

September 17, 2011
Protests in Bolivia in 2003 against gas privatisation that brought down a neoliberal president.

Neoliberal policies “which have fed the growing political disaffection of Bolivia's majority poor, have helped fuel the country's rolling 'social revolution.'"

This was how a May 6, 2006, US embassy cable from La Paz recently released by WikiLeaks viewed the powerful wave of struggle that led to the election of Bolivia's first indigenous president, Evo Morales, in 2005.

This secret assessment came despite Washington publicly trumpeting neoliberal policies as the way to solve the problems of Latin America's poor.

In 1985, under the advise of US economist Jeffrey Sachs, the Victor Paz Estenssoro government opened up Bolivia’s economy to foreign transnationals.

A number of state-owned companies were privatised, including the crucial mining sector. Restrictions on foreign capital were removed and labour security undermined.

The US embassy admitted in its cable: “Notwithstanding the promises of politicians ... poverty was largely impervious to the liberal reforms of the late 80s and 90s.”

It noted the percentage of Bolivians living below the poverty line remained “virtually unchanged (over 60%) … and even increased during the economic crisis of 1999-2003”.

At the same time, neoliberal reforms “clearly failed to meet public expectations for increased incomes and jobs”.

“In fact, reforms had a palpably negative effect on jobs in the short term, immediately causing a 17 percent drop in public sector employment and triggering the dismissal of thousands of public sector miners when resource draining state-owned mining enterprises were shut down.”

In the countryside, neoliberalism's impact was even more with $966 in urban areas, the cable noted.

“According to INE,” the cable said, “90 percent of the population in urban areas have electricity, while only 29 percent do in rural areas”.

This led to mass migration, in which “between 1999 and 2003 over half a million people or 10 percent of the current urban population migrated to cities”.

One key destination was El Alto, previously an outlying suburb of La Paz. It mushroomed into one of the country's largest cities.

The cable said the “heightened expectations of newly arrived urban dwellers” in El Alto were critical to promoting an “increased sense of relative deprivation due to the wealth they see around them".

“So while ‘better off’ in an absolute sense than they were before, they increasingly view access to such services as water, gas, and electricity as a right that the political and social system owes them a right they are willing to take to the streets to demand.”

This helped transform El Alto into what the US cable described as “a central, volatile element in the successive crises” that forced the resignation of two presidents.

The US embassy cable noted that race was another critical dimension to social and economic inequality.

It said: “Most of Bolivia's majority poor, for example, are of mixed or indigenous origin. Many of the country's wealthiest families, by contrast, are of conspicuously European descent.

“These apparently race-based social and economic differences have exacerbated the sense of racial separation, and amount, in the view of some critics, to a kind of de facto economic apartheid.”

“Moreover,”, it said, “growing ethnic consciousness has fed increasing ‘indigenous’ resentment of the dominant ‘white’ minority and the political system that allegedly sustained it.”

Nonetheless, the US cable maintained that neoliberalism provided Bolivia with “macro-economic stability and a platform for increased private investment.”

The problem, according to the cable, was the widely held “perception that the large amounts of foreign direct investment Bolivia received between 1997 and 2003 as a result of privatization benefited the rich and not the poor”.

The cable, however, conceded: “This perception was not altogether inaccurate.”

The economic impacts of neoliberalism, combined "with the growing political disaffection of Bolivia's majority and largely indigenous poor into an explosive and still largely unresolved mix".

Beginning “with the infamous Cochabamba ‘water wars’ of May (April) 2000”, where protesters forced the government to reverse the privatisation of Cochabamba’s water system to US multinational Bechtel, further “massive protests … led to the ousting of President Gonzalo ('Goni') Sanchez de Lozada” in October 2003.

Goni's replacement, Carlos Mesa, was also forced to resign in June 2005.

A key issue on both uprisings was the “government's management of Bolivia's vast natural gas resources”.

These movements were firmly rooted among the poor, indigenous peoples of the west.

The cable noted these regions also voted overwhelming to bring Morales into power on a campaign platform to "nationalize Bolivia's gas industry, 'refound' the state in a Constituent Assembly, and transform the supposedly failed 'neo-liberal' economic order for the benefit of Bolivia's forgotten majority”.

Bolivia's "ongoing social revolution" continues to move ahead with this program. It has recuperated state control over gas, approved a new constitution and begun to move away from US-backed neoliberal policies.


sure, blame the "neoliberals", but Evo is even worse - and by the way, he is NOT "Bolivia's first indigenous president" - check your facts (he is mestizo, like most, doesn't even speak a non-spanish language himself and MORALES is a Spanish last name fyi, oh - and if you look it up, there have been indigenous presidents before + the vice president he deposed under Goni (Cardenas) is much more indigenous (and educated) than Evo) so quit making him out to be the indigenous miracle. Evo's "ongoing social revolution" has made the poor even poorer - all of the money coming into the country now is from cocaine and the narcos are gaining temendous power (let's ask Colombia how well that worked out for them, shall we?) Oh and the "green" thing? Evo is building a huge (and extremely expensive) road through the middle of the Amazon, disrupting the lives of the TIPNIS and destroying their lands (look it up) Why? to connect the coca growing region (=cocaine) with the location where the cocaine is exported from (close to the border). This road (which he is paying double what it should cost, so billions of dollars pocketed by someone in his administration) is going to destroy large amounts of the rainforest, increase logging (which has already increased enormously under Evo) and the REAL indigenous are all against it, and Evo has said he doesn't care what they think, he's building it. Why do people who know nothing about Bolivia - and I'd bet have never even been here - give themselves the right to make opinions? When you don't know what you're talking about, do a LITTLE bit of research first AT LEAST!!!
I think Federico Fuentes has written a book on Bolivia based on extensive interviews with leading political figures there. He would appear to have more than a passing acuaintance. As for inaccuracies, Bolivia's primary export is natural gas not cocaine. If there's cocaine it's probably going to North America via the mafia and CIA who have been trying to knock Evo off. As to this road, which I'm not super enthusiastic about, it's 80% funded by Brazil, so what's the crap about it costing double? And the long rants about how Evo isn't a "real" indigenous I would listen to from an indigenous Bolivian, but anyone else appointing themselves as the arbiter of who really indigenous there is a hypocrite and racist. It's one thing to be critical of the MAS government, but having your head stuck up your own a$$ doesn't really indicate anyone should listen to your bullshit.
Reality is always more complicated. You pointed out some important inconsistencies with Evo's government. I actually just returned from living in Bolivia for 10 months. Evo does speak Quechua, but not Aymara or any other indigenous languages. I don't many people in Bolivia, even indigenous, who don't have spanish names. It's a vestige of colonialism that you can't just expect to disappear. I agree with your points about the problems with Evo's administration concerning the environment and the internal politics and economics in Bolivia. Indigenous groups are currently protesting the TIPNIS road you mentioned. It doesn't help your cause to overstate the case however and not get your facts right either. I believe Evo, like most politicians, had good intentions on the campaign trail, but made promises that can't be kept by those in power. He has passed some laws that sound good (Law of Pachamama and Law for Food Sovereignty), but the reality is that there is no model for development for the poorest country in South America outside of the extractive industries and industrial agriculture. He's stuck between his idealism and reality and has not been creative or strong enough to actually try to create a new model for development. Just my two cents. Lucas
Neoliberal, colonialism ... "social revolution" PLEASE!!!! Who the hell are you Fuentes?? a frustrated socialist? There is no socialist movement in Bolivia leaded by the murderer government of Evo Morales. And there is no revolution other than the revolution of the masses, tired of another dictator. You've been sold completely the psychosis that Morales Goverment has about EVERYBODY against him, overall the "Empire" right? There is more to US big annoying international spoon than you think. For Pete's sake, stop spreading so much lie!!

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