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1
Development Strategy of the MAS in Bolivia: Characterization and an
Early Assessment
1
Ricardo Molero Simarro and María José Paz Antolín
____________________________________________________________________
ABSTRACT
The aim of this article is to describe and evaluate the development strategy launched by
the Movimiento al Socialismo (MAS) in Bolivia when it came to power in 2006. The
origin of this strategy can be found in the desire to tackle the economic and political
transformations caused by the structural adjustment programme launched in 1985. The
main economic measures taken by MAS are analysed in the context of the new
development plans implemented in Latin America. This allows us to focus on the results
achieved in Bolivia in two areas of major importance in the MAS strategy: productive
transformation and income distribution. It is argued that, despite the progress achieved,
the government of Evo Morales has so far been unable to alter the primary export model
and the associated distribution pattern that have characterized the Bolivian economy.
An earlier version of this paper was presented at the International Workshop of the
Development Research and Training Institute (EADI) , ‘The World System and the Left
Turn in Latin America’ organized by the working groups ‘Transformations in the World
System – Comparative Studies of Development’ and ‘Europe and Latin America’,
hosted by the Universidad Complutense de Madrid (6–7 October, 2010). We
acknowledge the comments of the participants of that event and of the referees of
Development and Change. Any errors are our own.
1
Paper published at Development and Change, 43 (2), pp. 531-556. The definitive version is available at:
. http://onlinelibrary.wiley.com/doi/10.1111/j.1467-7660.2012.01766.x/full.
2
INTRODUCTION
Since the Movimiento al Socialismo (MAS) came to power after its 2005 election
victory, the nature of economic policies in Bolivia has changed. During the previous
twenty years they had been characterized by a general liberalization, privatization and
opening up of the economy to external markets. However, the basic lines of the new
policies, reflected in the National Development Plan, talked of a new development
strategy that would, on the one hand, allow the primary export model that has
traditionally characterized the Bolivian economy to be superseded
and, on the other
hand, put an end to the social inequality, poverty and exclusion present in Bolivian
society (an endeavour that is not exclusive to Bolivia). Taking this as a starting point,
this study attempts to determine to what extent the new strategy is achieving its aims.
2
The experience of Bolivia could be representative of the transformation processes
taking place in other countries in the region with extractive economies.
An extractive economy is one in which the production and export of low value-added
products dominates (Castel-Branco, 2010). The extractive sector often becomes an
‘enclave’ within the national economy since it lacks linkages with other sectors. This
creates inequality between regions and social classes in the country. At the same time,
capitalist classes become dependent on income generated by the extractive sector,
making them subject to the global dynamics of capital accumulation. Indeed, according
to some authors, ‘governments in resource abundant developing countries are permitted
to engage in corrupt and economically damaging activities so long as they remain loyal
to the dominant nations and allow the natural resource wealth within their borders to be
looted by firms from wealthy countries’ (Rosser, 2006: 17).
3
This description fits the historical experience of Bolivia, and forms the starting point for
this article. The rest of the text will analyse the extent to which the alternative
development strategy launched in Bolivia since 2006 has managed to overcome the
economic dynamics that are typical of an extractive economy. Our hypothesis is that the
measures taken during the first years of the strategy have not brought about a break
2
We are aware that five years is a relatively short period in a process that is, by definition, long
term. Nevertheless, we believe that the most significant trends can already be clearly identified.
3
Stevens (2003) offers a survey of the literature on the resource curse and shows that there are
only few exceptions and none of them are fully understood.
3
from either the traditional model of primary export development or the decades-old
patterns of distribution. Nevertheless, it can be argued that significant change has taken
place, and the scope and limitations of this transformation must be assessed.
In recent decades, an extensive academic literature has emerged on the problems of
transforming an extractive economy and overcoming the so-called ‘resource curse’.
‘This literature has suggested that natural resource abundance (or at least an abundance
of particular types of natural resources) increases the likelihood that countries will
experience negative economic, political and social outcomes including poor economic
performance, low levels of democracy and civil war’ (Rosser, 2006: 7). While these
ideas are widely accepted, there are three important limitations in this literature: first,
there is a lack of conclusive evidence on the negative development outcomes in the
context of an abundance of natural resources; second, most authors do not take into
account the role played by social forces and the external environment; and third,
recommendations to overcome these negative outcomes have ignored the issue of
political feasibility (ibid.).
According to Rosser (ibid.: 14), ‘for this reason, most recent work on the relationship
between natural resource abundance and economic performance has given much greater
attention to the role of political variables in mediating this relationship’. Primary
exporting economies run the risk of falling into the dynamics of a rentier state, which is
defined as having ‘large amounts of unearned income to spend’ with which ‘it is argued,
they tend to develop greater capacity in distributive… and productive functions… than
in functions related to the regulation and supervision of the economy and domestic
taxation’ (ibid.: 15). In the case of Bolivia this could also affect the development
strategy’s ability to transform the pattern of wealth distribution. Not surprisingly, it
could be politically tempting to set aside the goal of primary distribution of income as a
key means for ending inequality and poverty and rely instead on income redistribution
through social policy.
To analyse these issues, the next section will explain the MAS’s rise to power as a
consequence of the Bolivian economy’s structural adjustment process and the political
mobilization that emerged in response. Second, the National Development Plan (NDP)
drawn up following the election victory of the MAS will be placed in the context of
4
transformation processes in Latin America, and the main policy measures taken in the
case of Bolivia will be described. Finally, progress in the two areas which the NDP
considers essential for overcoming the traditional primary export model — production
and distribution — will be discussed, using the most important indicators in each case.
BACKGROUND
Development in Bolivia has traditionally been driven by primary exports. During the
1970s, coinciding with the dictatorship of Hugo Banzer, Bolivia’s economy grew at an
average annual rate of 5 per cent, thanks to the high price of tin on the world market.
However, with the rise of international interest rates and the fall of commodity prices,
the structural external deficit of the economy became unsustainable. With a public
deficit of 22.1 per cent in 1984, external debt reached a level equivalent to 420 per cent
of exports for that year. Subsequent hyperinflation led to price increases in 1985 at an
annual rate of 11,750 per cent.
The process of structural adjustment launched in August 1985 with Supreme Decree
21060 marked the start of twenty years of neoliberalism in Bolivia.
4
When the decree
came into force, Bolivian workers saw their wages reduced by 40 per cent in just one
month. The decree provided for the initial ‘relocation’ from state mining of more than
18,000 workers,
5
which had two immediate consequences: the break-up of traditional
mining unions linked to the COB (Bolivian Workers Centre), and the spread of
informality in the labour market.
This was the first step in the restructuring of the state’s productive apparatus that led to
a covert process of privatization (called ‘capitalization’) that placed the country’s
natural resources (oil and gas) in the hands of transnational corporations (TNCs). The
control of the TNCs over strategic sectors of the economy ultimately resulted in a return
to mining, but with an important difference: production became disconnected from the
state. This is illustrated by the tax regime adopted in the 1996 Hydrocarbons Law,
4
For this analysis of stabilization and structural adjustment we draw primarily on Molero
(2009).
5
Kohl and Farthing (2006: 61) claim that ‘over 20,000 miners lost their jobs in the first year and
manufacturing jobs fell by 35,000 over five years’.
5
which reduced royalties paid by multinational companies from 50 per cent to 18 per
cent. The process of structural adjustment reinforced Bolivia’s primary export
orientation and the degree of transnationalization of the economy.
The privatization of strategic state enterprises ran parallel to political decentralization of
the Bolivian state. The adoption of the Popular Participation Law in 1994, the same year
that the Law of Capitalization was passed, involved a fundamental restructuring of the
state based on the introduction of ‘participatory political institutions at the municipal
level’ (Kohl, 2002: 457). This meant that 25 per cent of central government revenues
were transferred to municipalities and controlled by local institutions created for the
purpose. The aim of this neoliberal economic and political double agenda was ‘to
guarantee transnational firms access to low cost Bolivian natural resources and labor
while also creating the social stability those firms need to operate’ (ibid.: 465).
Nevertheless, as in other Latin American countries, contradictions between markets and
democracy gradually gave rise to popular response. In the case of Bolivia, the relocation
of state mining workers linked to the COB largely determined the form the movement
would take. The return of many workers to their homelands resulted in a strengthening
of the indigenous–peasant movement. In 1995, they decided to create a ‘political
instrument’ (Harnecker and Fuentes, 2008), rather than making isolated demands in the
struggle for political power. The people felt disillusioned and underrepresented by the
political parties and decided to take a different tack. This new ‘political instrument’,
together with social movements based in urban areas dominated by the informal
economy, became the main points of reference for the MAS project. Both began to gain
strength some fifteen years after the onset of the structural adjustment programme.
Although the reduction of external debt was one of the SAP’s main objectives, the debt
was even higher in 2003 (US$ 5,142 million) than it had been in 1996 (US$ 4,643
million).
6
In addition, labour market deregulation meant that the informal economy
accounted for 63.4 per cent of the labour market by 2002, with the result that employee
participation in national income dropped to 30.1 per cent.
7
Thus, what Hylton and
Thomson (2007: 101) called a ‘new revolutionary cycle’ against the intensification of
the adjustment effort began between 2000 and 2003.
6
Data from Central Bank of Bolivia.
7
Own calculations based on date from the National Statistics Institute of Bolivia (INE).
6
In 2000 the so-called ‘Water War’ broke out against the privatization of water
management in Cochabamba, and various ‘peasant uprisings’ took place (see Kohl and
Farthing, 2006: 167–9). The fighting intensified in late 2002 when the government
proposed, in accordance with IMF recommendations, the creation of a 12.5 per cent
direct tax on wages. Finally, in 2003 the ‘Gas War’ began in opposition to the proposed
sale of gas supplies to a transnational consortium, Pacific LNG, for export to the US.
Amongst other things, the protesters called for the re-nationalization of Bolivia’s natural
resources. The uprising in September and October of that year led to the resignation and
departure of President Sánchez de Losada.
After a two year interregnum with Carlos Mesa in power (Hylton and Thomson, 2007:
118–26), the Movimiento al Socialismo, or MAS, came to power in 2006. The fact that
the movement was not institutionalized helped it to win the 2005 election; however, as
we will see, this may be one of its main weaknesses now that it is in power.
Furthermore, Bolivia’s neoliberal legacy acts as a serious constraint to the success of
MAS’s development strategy: ‘the difficulties that states and other institutions face in
trying to exit dominant and preexisting socioeconomic trajectories’ (Kaup, 2010: 124)
can be hard to overcome. In the case of Bolivia, this is apparent both in the formulation
of the strategy for development (an issue to which we will devote the next section) and
in the launching of the plan.
CHARACTERIZATION OF THE NEW DEVELOPMENT STRATEGY
MAS’s development strategy was formed in the context of a regional dynamic. Despite
differences, it is also possible to outline some common elements between countries.
Before looking at the specific case of Bolivia, this section begins with a more general
analysis of the factors that have contributed to the development of new proposals in a
number of countries.
7
While the results of neoliberal polices have pushed scholars to search for alternatives,
8
in reality it is easier to create a discourse against neoliberalism than to propose a
replacement for it. Thus, the new proposals include elements of change, but aspects
from previous models also remain. We can, nevertheless, speak of true breakthroughs
(the Bolivian nationalization is a good example). The way in which the elements of
change and continuity interrelate varies in different countries, but two elements are key:
the economic structure of each country and its political and social environment. Here we
attempt to identify both in the Bolivian case.
Along with the neoliberal legacy mentioned above, the international economic situation
characterized by a boom in commodities (particularly between 2003 and 2008) has been
the other element that encouraged the search for an alternative development strategy.
This has affected the economy in two ways: a strong economic performance (especially
in terms of GDP growth and the external sector) has helped to strengthen the political
will to change, but it has also provided the conditions which enable the new strategies
(particularly in South American countries with abundant natural resources). This has led
some authors to wonder whether the recent economic performance of these countries is
the result of new economic policies, or of a change in international conditions (Pérez
Caldentey and Vernengo, 2008: 24).
In this context it is no coincidence that one of the most important elements of these
‘new’
9
development strategies was the industrialization of natural resources. As most
authors agree ‘despite the profound changes translation to the left in Latin America, the
extractive industries remain important and are one of the pillars of current development
strategies’ (Gudynas, 2009: 190).
10
Machinea and Vera (2007: 372) have emphasized
that international experience shows that growth based on natural resources is possible.
In contrast to successful cases such as Australia, Canada, Malaysia, Norway and New
8
Cypher (2007: 57) identifies three stages: ‘(1) a theoretical critique of the existing paradigm,
(2) a sustained and proliferating process of uncovering
‘anomalies’ in the existing paradigm
through an accretion of empirical information and (3) the creation of a plausible new paradigm’
before we can ‘wave neoliberalism into history’ (ibid.).
9
The term ‘new’ is employed here with the same sense which Chavez et al. (2008: 36) use in
referring to the ‘new’ Latin American left. In both cases the term is used with a descriptive and
not an evaluative sense to express the fact that these strategies have gained presence in the
international arena in recent years, but without addressing whether the content is really original.
10
Molina (2007), Ortiz and Schorr (2008) and Perez and Vernengo (2008) agree with this
approach.
8
Zealand, ‘the main problem [in Latin America] is the limited ability demonstrated by
the countries of the region to add value and, thus, diversify their production structure’.
We mentioned above the interaction between continuity and change. Here, the
continuity in the strategic importance of the exploitation of natural resources is
accompanied by changes in the way this exploitation is managed by the state. Both are
central to the new development strategy. In contrast to the spectator role of the state in
neoliberal regimes, the state now becomes a clearly visible actor in two ways. First, it
must contribute to growth and diversification into higher value-added activities and
improve integration into the world market (the rules of which are not questioned). To
achieve this, the privatization and transnationalization of the neoliberal regime must be
reversed, at least to some extent, although the scope of these ‘counter-reforms’ will vary
by country. Second, given the blatant failure of neoliberal policies to improve living
standards for the majority, the state must strengthen its role as a redistributive agent.
This entails a variety of social policies with a greater or lesser degree of welfarism,
whose goals transcend the economic sphere by also seeking social legitimacy (Gudynas,
2009: 208).
For Bolivia, achieving these aims in both production and distribution depends on
increasing state revenues from hydrocarbons, and finding new ways to use those
revenues. Yet this will inevitably generate domestic social and political tensions and
highlight some of the contradictions faced by governments that assume this new role.
11
Indeed, the key role assigned to the state raises questions regarding the feasibility of
such strategies, in a context marked by the legacy of neoliberalism and the territorial
fragmentation and institutional weaknesses that have traditionally characterized these
countries.
12
The NPD and the MAS Strategy
The Bolivian proposal does not stray far from the general trends outlined above. The
basic lines of the proposal are reflected in the NDP: the aim of this plan is to establish a
11
In Bolivia this contradiction becomes clear when the Constitution seeks to define the meaning
of ‘Estado Plurinacional’. On this, see Tapia (2007).
12
For an analysis of these limitations in the case of Bolivia in the context of the nationalization
of hydrocarbons, see Kaup (2010) and Kohl (2010).
9
course along which to steer the proposal and at the same time implicitly define its
boundaries.
Although the ultimate goal is to improve income distribution, the core element of the
proposed transformation is Bolivia’s production matrix. This will be formed by two
major sectors: the strategic sector which would generate surpluses, and those sectors
generating employment and income for the majority of people. The strategic sector
would contribute, on the one hand, to ‘the dismantling of colonialism through
industrialization and an increase in the added value of domestic production and exports,
thereby inducing change in the primary export pattern’ (NDP, paragraph 5.1). On the
other hand, surpluses from the strategic sector would provide ‘resources for the sector
generating income and employment, thus contributing to economic diversification and
social development’ (ibid.).
It is precisely in this conceptualization of the strategic sector that the continuity with the
traditional primary export model lies. There are two reasons for this. First, overturning
the export model remains dependent on industrialization in the hydrocarbons sector. As
noted above, for Molina (2007) the problem is that, while there have been different
growth models in the history of Bolivia (some based on markets and others on the
intervention of the state), all of them have reproduced the same ‘narrow-based’
development pattern. According to Molina, Bolivia has changed its model several times,
but has never tried to change its pattern of development.
13
The current proposal focuses
on the industrialization of natural resources and does not imply significant changes in
this regard. As will be discussed below, despite the commitment to industrialization,
few measures were adopted during MAS’s first term to ensure industrialization of the
sector. At the same time, mining exploitation was intensified, with respect to both
production and exports.
13
The development pattern refers to the way in which the production factors of an economy are
linked, how they operate, cooperate or obstruct. The model is the ‘how’ of the economy, the
pattern is the ‘why’. According to Molina (2007: 122): ‘The economic model ... is simply the
way in which the pattern of development is managed. It can be done with a strong state and
controller, from a perspective that gives them more power than the market forces or from a joint
vision that combines state and market’.
10
Second, identifying the generation of surpluses as an essential function implies
strengthening the extractive character of the hydrocarbon sector. In the NPD, mention of
the energy sector is limited to just the electricity subsector; this impedes the
development of objectives for the energy sector as a whole that go beyond traditional
targets, such as efficiency, safety, costs, energy diversification, reduction of the
environmental impact and the availability of energy for the entire population (CEDLA,
2009). Achieving these objectives requires taking steps not only in the electricity
subsector, but also in the area of hydrocarbons.
Together with changes in the ‘strategic’ sector, transformation of the structure of land
tenure, technological change, growth in productivity and diversification of production
would lead to an increase in income in the productive sectors in which the bulk of the
workforce is concentrated. Such an expansion of sources of employment would be a
way to alleviate poverty — one of the basic objectives of the process — that is not
dependent on welfare.
In any event, changing the pattern of development would not imply any kind of
disengagement from the world market; rather it would be associated with a new form of
‘international economic recovery’ based on ‘the use of different ways and options for
participating in different markets and fields’ (NDP, paragraph 6.1.3). In other words, it
would seek to relocate the Bolivian economy within the international division of labour,
but from a position of renewed national economic sovereignty.
MAIN POLICY MEASURES
Using the general development strategy proposed by the MAS as a starting point, let us
now consider some measures that have been put in place during its first term in
government. We will focus on two measures: the nationalization of the hydrocarbons
sector, which forms the foundation on which all other economic and social
11
transformations rest; and social and distributive policies, which are essential to the aim
of improving the living conditions of the people of this Andean country.
14
Nationalization of Hydrocarbons
In the economic agenda of the MAS, the nationalization of hydrocarbons is the most
important step, not only from an economic standpoint, but also from a social and
political perspective. As a legal base, Supreme Decree No. 28701 (the Nationalization
Decree of 1 May 2006) fulfilled two functions: it kick-started the process of
nationalization and set out the course to follow based on other measures. The decree
thus marks out the limits to nationalization.
However, we must remember that changes in the regulatory framework had already
been initiated prior to Evo Morales’s rise to power. Indeed, the social struggles around
the so-called ‘Gas War’ and the referendum on nationalization led to the enactment of
the 3058 Hydrocarbons Law during the transitional government of Carlos Mesa. This
law was introduced in response to demands for nationalization intended to increase state
revenues from hydrocarbon. Both CEDIB (2007) and Rodríguez Cáceres (2008: 127)
see the Nationalization Decree as continuing the 3058 Act and in some ways going a
little further. A closer examination will give us a clearer view of this.
The fundamental issue, and the most controversial, is the actual meaning of
nationalization in terms of recovery of ownership and control. The Nationalization
Decree set out to reverse a trend towards privatization that had exceeded even
constitutional limits in that it had also transferred the ownership of natural resources at
the wellhead. Article 2.1 of the Decree reinstates the obligation of companies to transfer
ownership of all hydrocarbon production to the state body, Bolivian Fiscal Oilfields
(YPFB). However, for Kaup (2010: 130) ‘the way in which the state took control of
YPFB’s previously capitalized assets was more a free-market buyout than a
nationalization’.
14
The adoption by referendum of the New Political Constitution of the State in January 2009
has important implications for the development strategy as it reinforces some of the
fundamental points already defined in the NDP, including the importance of the hydrocarbons
sector and the role of the state in the economy (Montero, 2008).
12
Rodríguez Cáceres (2008: 107) reminds us that the concept of ‘legally recognized and
declared property acquires diverse and varied nuances when it comes to applying it
because the application is always determined by its historical context’. This raises
questions about the capacity of the Bolivian state, and in particular of YPFB, to regain
control and become the key player in the sector. The important issue is not who
performs the activities but who has the right of ownership over them, i.e. who has the
capacity to decide when and how to explore and how much to produce. This is a key
issue because in the absence of a real recovery of control, the nationalization process
becomes simply a measure for garnering a greater share of hydrocarbon revenues.
Article 5.1 of the Nationalization Decree states: ‘The State controls and manages the
production, transportation, refining, storage, distribution, commercialization and
industrialization of hydrocarbons in the country’. Articles 7.1 and 7.2 also talk of the
state regaining control of the entire chain through ownership of 50 per cent + 1 of the
shares of privatized companies. But will this ensure control of these companies? Note,
for example, that the two largest gas fields, San Alberto and San Antonio (which
together account for almost half of all gas production), are jointly operated by a
consortium of three companies, Petrobras, Andina and Total, in which Andina, the
nationalized company, has a share of only 50 per cent. If we add to this the fact that
there are currently about a dozen other TNCs operating in the sector, we get a sense of
how limited government control of this activity actually is.
This begs the question: what are the key elements that would allow the state real control
of the sector? These would certainly include the resources and operational capacity of
YPFB; the period for its reconstitution, established by the Nationalization Decree itself,
in Article 8, was only sixty days, even though it had taken more than three years to
design a ‘Bolivian Hydrocarbons Strategy’ (Ministerio de Hidrocarburos y Minas,
2008). However, the specific conditions in which TNCs have to operate are also a
determining factor.
13
During the transition period, the state was given an increased share in the production
value of mega-gas fields
15
amounting to 82 per cent; this comprised two elements
already included in Law No. 3058 — Royalties (18 per cent) and Direct Tax on
Hydrocarbons (DTH) (32 per cent) — together with an additional 32 per cent share for
YPFB. After the transition period, the final share accorded to the state was to be
established in new contracts to be signed within six months by all companies wishing to
continue operating in Bolivia. Forty-four new contracts containing the ‘new’ operating
conditions were reached between the government and the companies.
These contracts consolidated the trend towards increasing the state share that began with
Law No. 3058, since all of them retain the 18 per cent for royalties and 32 per cent for
the DTH. However, the additional YPFB share now depends on the conditions in each
contract with respect to the so-called ‘distribution of the final utility’ between YPFB
and private companies. Different analyses and estimates based on the conditions of each
contract conclude that in all cases the additional share of YPFB will be much lower than
the 32 per cent of the transition period (CEDIB, 2007). Moreover, under the terms of
the contracts, the more that is produced, the greater the hydrocarbon companies’ share
in the utility, which favours ‘rapid monetization of reserves’, providing little incentive
for investment in exploration. Without this, both production volumes and tax revenues
will, sooner or later, begin to fall.
Distributive and Social Policies
The second major area of intervention is the policy affecting distribution of national
income. This has been channelled primarily through land reform undertaken by the
MAS since 2006. However, fierce opposition to the reform by the Bolivian oligarchy,
which controls the agro-industrial complex in the eastern provinces of the country, has
prevented an effective transformation of the structure of land ownership. In fact, the
partial redistribution of lands to the indigenous peasantry is based only on the so-called
saneamiento (cleansing) of land which is not used productively. This has left in place
15
Those with an output exceeding 100 million cubic feet daily. This applies to only two fields (San
Alberto and San Antonio), which represent approximately 49 per cent of total gas production.
14
both the dual structure of land tenure in Bolivia and the traditional distribution of
agricultural surplus.
16
The MAS has also sought to influence income distribution through distributional and
social policies. First, on 1 May 2006, in an attempt to alter the primary distribution of
income, the MAS government repealed Article 55 of Supreme Decree 21060 of 1985.
This article, which formed the cornerstone of deregulation of the labour market during
the two decades that followed, made it possible for work contracts in both public and
private companies to be terminated freely, i.e. without having to prove any causality. At
the same time that this article was repealed, the MAS government approved annual
increases in the national minimum wage. In the years between 2006 and 2010, increases
were 13 per cent, 5 per cent, 10 per cent, 12 per cent and 5 per cent respectively.
In the field of social policies, another key measure was the proposed reform of the
Pensions Act, presented to the Bolivian Congress in December 2008. This was aimed at
a fundamental reform of the system of capitalization, managed by two private pension
funds, which had been launched in Bolivia in 1996. To reform this system, the MAS
government got preliminary approval of a law to develop a long-term social security
system, comprising two subsystems: a joint pension system and a non-contributory
system. The non-contributory pension scheme consists of a ‘universal old-age income’
for all retirees, called Renta Dignidad. This amounts to 2400 bolivianos for those who
do not receive any income from the previous system and 1800 bolivianos for those who
do. The scheme is largely financed from 30 per cent of the resources obtained from the
DTH. It is the most important redistribution measure attempted so far, since in the rest
of the system companies are virtually exempt from funding their employees’ retirement.
The scheme also includes lowering the retirement age from sixty-five to sixty.
Redistribution measures have been linked to the ‘social protection and social-
community development’ policy. Conditional cash transfer programmes aimed at the
most vulnerable population groups, which were part of social policy during the
neoliberal period, have remained (Ortiz and Schorr, 2008: 6–7). However, the range of
programmes has been expanded so that social policy supplements economic policies in
16
For a discussion of the limits of the land reform process undertaken by the MAS see Ormaechea
(2008).
15
the pursuit of equal opportunities. The main programmes implemented have been linked
to three particular targets: first, the struggle against poverty and its effects
(Desnutrición 0, or ‘Malnutrition Zero’, and the maternity allowance known as Bono
Juana Azurduy); second, the generation of income opportunities and social assets (Mi
primer trabajo decente, ‘My First Decent Job’, and the educational allowance Bono
Juancito Pinto); and finally integral community development (Comunidades reciprocas,
‘Reciprocal Communities’, and Comunidades en accion, ‘Communities in Action’). As
we shall see in the following section, although significant efforts have been made, there
is still scope for an increase in public spending on such policies.
PRODUCTIVE AND DISTRIBUTIVE OUTCOMES
The Intensification of the Extractive Model
The performance of the Bolivian economy during Morales’s first term (2005–08) was
very similar to other Latin American countries that have benefited from the commodity
boom and its effects on their foreign sectors (Pérez Caldentey and Vernengo, 2008). As
the data in Figure 1 show, the trends that were discernible in the first years of the
twenty-first century seem to be becoming more marked. These are the greater share of
exports in Bolivia’s GDP (making it more dependent on foreign demand) and the
increased concentration of Bolivian exports in the extractive industries (oil and
minerals). In 2008, the year in which the ratio reached its highest point, almost 80 per
cent of total exports were linked to the extractive sector. As noted earlier, this is partly
explained by the rising price of raw materials (see Table 1), which has improved the
terms of trade (see Table 2). Activities related to the export of primary products,
together with construction,
17
have seen the highest growth (see Figures 2 and 3).
17
This growth is also linked indirectly to the evolution of the export sector because it is the income from
hydrocarbons that has largely funded infrastructure investments.
16
0%
10%
20%
30%
40%
50%
60%
1.999 2.000 2.001 2.002 2.003 2.004 2.005 2.006 2.007 2.008 2.009
Figure 1. Bolivia: Exports (1999-2009)
Minerals/Total Exports Hydrocarbo ns/Total Export Exports/GDP
Source: Own calculations based on data from INE
Table 1. Commodity price index (2003-2010)
(Base year 2000=100)
2003 2004 2005 2006 2007 2008 2009 2010
Total commodity price 101,98 133,41 160,78 194,73 217,87 279,45 209,31 252,71
Agricultural products 101,04 114,17 119,59 133,39 153,38 187,43 164,84 191,41
Minerals and Metals 102,81 152,09 184,15 240,75 256,42 319,67 247,31 292,84
Energy products 101,98 131,36 176,36 204,43 239,85 328,59 210,74 269,47
Source: Own calculations based on data from CEPAL STAT
Table 2. Terms of trade and purchasing power of exports (2003-2009)
(Base Year 2000=100)
BOLIVIA 2003 2004 2005 2006 2007 2008 2009
Terms of trade for goods f.o.b. 98, 5 104,1 111,8 139,8 142,1 143,9 139,4
Purchasing power of exports 125,9 158,0 192,1 246,9 255,9 349,2 276,4
AMÉRICA LATINA Y EL CARIBE
Terms of trade for goods f.o.b. 98,3 103,4 108,7 116,0 118,3 122,3 114,7
Purchasing power of exports 106,0 123,0 139,3 158,9 167,5 174,3 148,0
Source: Own calculations based on data from CEPAL STAT
This favourable international environment is clearly positive for MAS’s development
strategy. In fact, it is necessary in order to achieve the long-term, sustainable goals set
by the NDP. However, our purpose here is to demonstrate how the development
17
strategy is being implemented, in the hope of providing some answers to the questions:
how much is the favourable international context contributing to the Bolivian
government’s development strategy? And does this strategy, in the global context, help
to reinforce or move beyond the extractive model?
Growth data are indicative of trends in the evolution of the productive structure.
According to data from the National Statistics Institute of Bolivia (INE), the most
significant change from 2005 to 2009 was an increase in the mining share. However, the
share for the hydrocarbons sector fell following a rise between 1996 and 2005.
18
The net
result of both these trends is that extractive industries as a whole increased their share in
Bolivia’s GDP from 10.9 per cent in 2005 to 12.2 per cent in 2009, continuing a trend
that began in the mid-1990s when the share was around 9.5 per cent (see Figures 2 and
3). These data in part confirm the theories on intensification of the extractive model,
especially given that these sectors were particularly affected by the fall in demand and
prices driven by the global crisis in 2009 — factors unconnected with economics and
politics in Bolivia per se. The recovery of demand and prices in 2010 may result in a
return to the pre-2009 trend. Nevertheless, it is important to note that the upward trend
originated not so much in the hydrocarbons sector as in mining, especially after the
launch of the San Cristobal mining project which pre-dated the MAS government.
Moreover, this strong growth in mining, which to a large extent accounts for the
increase in extractive activities, took place in conditions that would certainly not
encourage a spirit of nationalization.
18
In fact, this decline occurred mainly in 2009 and to a lesser extent in 2008. Between 2005 and 2007, the
share remained at fairly constant levels.
18
Figure 2. Bolivia: Total GDP and various sectors 2005-2009
(1)
(Bolivianos 1990)
-5
0
5
10
15
20
25
Agriculture,
Forestry,
Fishing and
Hunting
Oil and Natural
Gas
Minerals
Manufacturing
Electricity, gas
and water
Construction
Trade
Trasnport and
comunications
Financial
institutions,
Insurance,
Real State,
Business
Public
Administration
MEDIA 2006-9 Media 2006-9 of Total GDP
Source: Own calculations based on data from INE
(1) Includes only provisional data from the first three quarters
A mix of factors explain the results in the hydrocarbons subsector. The most significant
factor, due to its close relationship with the nationalization process, is a fall in
investment, both in exploration and exploitation, which has slowed the growth in
production. This is largely due to the decline in private investment, a tendency that
began prior to the nationalization process (see Table 3). At the same time, financial and
management constraints mentioned earlier have prevented YPFB from developing a
more ambitious investment policy. This was exacerbated in 2009 by the fall in demand
and prices brought on by the global crisis. In fact, that year was the only one in which
there was a decrease in production, prompting a loss in the share of the sector in the
economy as a whole in relation to 2008. If the new investment that has been promised
by both private companies and YPFB becomes a reality at the same time as demand
recovers, production levels will probably increase, as will the share of the sector.
19
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
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Gráfico 3. Bolivia: Sectoral structure of GDP
(Bolivianos 1990)
1996 2000 2005 2009 (1)
Source: Own calculations based on data from INE
(1) Includes only provisional data from the first three quarters
Table 3. Bolivia: Investment in oil exploration and explotiation 1991-2007 (in millions of $)
1991-95
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
Exploration 52,58
69,8
130,4
374,6
372,2
256,8
169
113,5
108,6
86,7
45,84
71,57
__
Explotation 22,12
29,2
140,4
230,3
208,6
185,3
237,4
231,3
172
149,3
153,72
126,59
__
TOTAL 74,68
99
270,8
604,8
580,8
442,1
406,4
344,8
280,5
235,9
199,56
198,16
211,3
* Proyected
Source: Ministry of Hidrocarbons
Aside from extractive activities, it is also important to consider the efforts the
government has made to promote productive transformation through the
industrialization of hydrocarbons and the development of other productive sectors. An
analysis of the volume and sectoral distribution of public investment is useful here (see
Tables 4 and 5). With respect to volume, there has been a remarkable increase during
the period, from 0.8 per cent in the period 1996–2005 to an average of 15.9 per cent in
2006–09.
19
Despite the increased tax burden on hydrocarbons, which led to the
increases, prudent fiscal policy coupled with low operational capacity (see Table 4 for
differentials between planned and executed investment) has not allowed a further
growth in investment. Moreover, even though the increase in resources available for
public investment has enabled certain objectives of the NDP to be met, it is somewhat
alarming to note that more than 50 per cent of the domestic financing of public
19
Own calculations based on statistics from the Socio-Economic Policy Analysis Unit (UDAPE).
20
investment is dependent on hydrocarbon revenues, as a result of the high share of tax
revenues from oil and gas with respect to total tax revenue (see Figure 4). This implies a
contradiction in the development model. Although productive transformation is less
dependent on external forces through foreign financing (loans from financial markets or
international organizations which always involve constraints on economic policy), it is
more vulnerable to the other external variables, such as natural gas prices. On the other
hand, it should not be forgotten that change may also imply improvement if it facilitates
the recovery of a certain policy space.
Table 4. Public Investment by Sector (1) (In millions of $)
Planned Executed Planned Executed Planned Executed Scheduled Executed
16.186 10.401 74.571 18.856 109.562 46.867 218.456 79.167
5.109 3.062 41.964 11.250 37.772 34.161 110.542 47.969
11.078 7.338 32.606 7.607 71.790 12.706 107.914 31.197
125.663 124.870 249.648 151.424 219.967 170.729 269.490 169.877
69.607 75.990 130.951 83.072 122.767 81.639 149.536 90.097
11.718 11.396 33.697 20.491 36.551 18.444 33.514 15.155
44.338 37.484 85.000 47.860 60.649 70.647 86.439 64.625
430.543 481.468 678.156 550.931 573.504 649.582 870.629 694.342
375.389 409.475 543.012 449.554 478.387 490.157 694.233 537.196
39.981 44.118 96.864 69.639 75.491 79.828 146.907 82.729
34 1.284 10.927 1.395 960 46.681 5.593 36.507
15.139 26.591 27.353 30.342 18.666 32.916 23.896 37.910
189.731 262.730 332.613 284.200 362.295 427.328 473.165 475.328
53.488 61.151 85.067 63.034 67.834 79.674 74.929 91.366
39.862 75.191 82.362 77.727 76.448 123.927 91.031 151.311
34.778 56.452 70.858 60.629 80.254 50.257 110.295 79.433
61.603 69.935 94.327 82.810 137.759 173.470 196.910 153.218
6.348 56.714 19.147 20.688
961 39 3.899 1.021
5.236 5.222 14.482 6.625
151 51.452 766 13.042
762.123 879.469 1.334.988 1.005.411 1.271.675 1.351.220 1.850.885 1.439.402
Multisectorial
2006 (2) 2007 (2)
Extractive
Mining
Oil and Gas
Production
Agriculture
Manufacturing and Turism
Education
Sanitation
Urban Planning and housing
INFRAESTRUCTURE
Transports
Energy
Comunications
Water
T O T A L
2008 (2) 2009 (2)
OTHERS
Trade and Finance
Justice and Police
National Defense
SOCIAL SERVICES
Health
(
1) Includes projected delivery of municipal governments
SOURCE: Ministry of Development Planning - Deputy Minister of Public Investment and External Financing.
21
Table 5. Public Investment executed by sector (percentage)
2006 2007 2008 2009
EXTRACTIVE 1,18 1,88 3,47 5,5
Mining 0,35 1,12 2,53 3,33
Oil and Gas 0,83 0,76 0,94 2,17
PRODUCTION 14,2 15,06 12,64 11,8
INFRAESTRUCTURE 54,75 54,8 48,07 48,24
SOCIAL SERVICES 29,87 28,27 31,63 33,02
SOURCE: Own calculation based on data from Ministry of Development Planning - Deputy Minister of Public
Investment and External Financing.
0,00
10,00
20,00
30,00
40,00
50,00
60,00
0
5000
10000
15000
20000
25000
30000
35000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (p) Jan-J une
2009
Figure 4. Non-financial Public Sector: Hydrocarbons Taxes, 1996-2009 (p)
Total hydrocarbon s (m illions of bolivianos) Hydrocarbon s Revenues/Total revenues
Source: Own calculations based on data from UDAPE
(p) Provisional data
In terms of the sectoral distribution of public investment and its contribution to
productive transformation, it is worth highlighting two points. First, although public
investment in hydrocarbons has grown in absolute terms, it has remained low
throughout the period. Public investment in mining, where there has been no
nationalization process, has grown much faster than in hydrocarbons. Second, total
investment in other sectors, which could boost productive transformation, remains at
low levels. Infrastructure continues to account for the highest share of investment,
having increased considerably in the period. One of the main reasons for this is the
distribution of hydrocarbon revenues among the various public administrations. This
has resulted in a considerable dispersion of resources which hinders the creation of
something like a Sovereign Investment Fund managed by the central government,
22
which is present in many other countries. In Bolivia, a large share of the revenue is
allocated to prefectures, particularly those in the resource-producing regions.
This distribution corresponds to the characteristics of the political organization of the
state, inherited as part of neoliberal reform, and the power of elites, particularly in
certain regions. For Tapia (2007: 60) ‘these autonomies are the negation of the
nationalization process and are closer to the pattern of territorial domination’. Indeed,
the prefectures have been using these resources almost exclusively for improving local
infrastructure. While this has probably been necessary in many cases, it has nevertheless
limited the scope of investment in terms of productive transformation.
20
In short, the main trends all point in the same direction: a deterioration of the primary
export model reflected in the increased importance of mining activities. There are no
clear signs of any industrialization of these activities or of the use of hydrocarbon
revenues in a way that would permit and support the development of, for instance, a
manufacturing sector.
Regressive Distribution, Progressive Redistribution of Income
Having analysed the extent of changes in the productive structure of the Bolivian
economy, we now examine the capacity of the MAS government to alter the distribution
pattern linked to the previous model of primary export development. As we shall see,
any positive results are linked more to redistribution policies than to those affecting
primary income distribution.
With regard to employment — the main factor in determining purchasing power — the
high rates of growth achieved during the first MAS term helped to reduce the
unemployment rate from 5.5 per cent in 2005 to 5.2 per cent in 2007,
21
although this
was a relatively small decline when compared to growth. Moreover, the open
20
For a more detailed analysis of this issue, see Espada (2009).
21
Own calculations from data provided by the INE (National Statistics Institute of Bolivia).
Unfortunately, to date (April 27, 2011), neither the INE (www.ine.gob.bo) nor the Socio-Economic
Policy Analysis Unit (www.udape.gov.bo) could provide more up-to-date data than those presented here.
The same goes for the other statistics in this section, unless otherwise noted.
23
unemployment rate in major cities increased from 7.8 per cent to 8.2 per cent over the
same period.
22
This is consistent with a significant level of informal employment that
was already present in Bolivia before the MAS came to power. Although the level of
informal employment fell from 59.1 to 57.4 per cent for the economy as a whole, the
number of workers working in this sector in major cities increased from 57.8 to 60.2 per
cent in the period 2005-2007 (UDAPE data).
Source: Own calculations based on data from UDAPE
It therefore comes as no surprise that wages have followed a clearly regressive pattern.
Increases in the national minimum wage enacted by MAS only significantly increased
real purchasing power in the first year of the MAS government, with an 8.7 per cent
improvement after adjustment for inflation. The effects of the minimum wage on public
and private sector wages were mixed. Real wages in the public sector rose between
2005 and 2009, despite a drop of 3.8 per cent in the annual rate in 2008. However, in
the private sector the inability to bring about any substantial improvement in the level of
22
Although the series of Employment Indicators for Capital Cities provided by UDAPE with data from
1989 to 2007 has not yet been updated, their website provides other statistical series of Activity Status by
Sex by Quarter for Capital Cities. On 27 April 2011 the website gave data for the years 2009 and 2010,
indicating that the open unemployment rate in capital cities has risen from 9.4 per cent in the first quarter
of 2009 (which is significantly higher than the figure available for 2007) to 6.9 per cent in the first quarter
of 2010 (a very sharp drop for just one year).
24
employment and working conditions led to a dramatic fall in real wages of 14 per cent
in cumulative terms between 2005 and 2009
23
(see Figure 5).
It is the behaviour of wages in the private sector that best explains the subsequent
development of primary income distribution as an aggregate between salaries and
profits. Since 2006, despite measures aimed at boosting salaries, the regressive trend
seen during the process of structural adjustment has continued. The share of employee
remuneration in national income dropped from 30.1 per cent of GDP to 24 per cent in
2008
24
(see Figure 6), although it is true that we must take into account the rise in the
share of the gross operating surplus due to revenue received by state-owned enterprises,
especially YPFB,
25
and the increase in the share of net taxes on production that derives
from the new tax scheme developed in the hydrocarbon sector. To some extent, this
increased revenue received by the state, particularly through the DTH, has been
redistributed in the form of indirect wages through social policies.
Source: Own calculations based on data from INE
(p) Provisional data
23
Own calculations based on UDAPE data.
24
Own calculations based on INE data.
25
Given the disaggregation of available statistics it is impossible to know the exact proportion.
25
Analysis of the evolution of income inequality shows a fall in the Gini Index from 0.60
to 0.56 between 2005 and 2007
26
for Bolivian society as a whole. This is most likely
due to a decrease in dispersion between different wages, rather than to the direct effects
of redistribution by state action. Public policies appear to have had a greater impact in
the case of poverty reduction: general relative poverty fell slightly from 60.6 to 60.1 per
cent between 2005 and 2007 and extreme poverty from 38.2 to 37.7 per cent
27
(Figure
7). These reductions have been greater in rural areas (with a 4.2 per cent drop in relative
poverty and a 15.6 per cent drop in absolute poverty) than in urban ones (with a 0.3 per
cent increase and a 9.5 per cent decrease respectively in relative and absolute poverty).
Despite the sharper declines shown by estimates for 2008 (to 59.3 per cent in the case of
relative poverty, and to 32.7 per cent in the case of extreme poverty),
28
overall the
improvements have been limited. Furthermore, with respect to personal income
inequality and poverty, although the trend has been towards decline, there could have
been greater government commitment to reduction.
60.6% 59.9% 60.1% 59.3%
38.2% 37.7% 37.7% 32.7%
0.60 0.59 0.56
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 (p) 2008 (e)
Gini Index Value
% Total Population
Figure 7: Personal Distribution of Income and Poverty
Poverty Index Extreme Poverty Index Gini Index
Source: Own calculations based on data from UDAPE
(p) Provisional data
26
Data from UDAPE.
27
Data from UDAPE.
28
In the Sixth Report on Progress in the Millennium Development Goals in Bolivia published by
UDAPE (2010: 34) provisional data are available which show a drop in extreme poverty to 29.9 per cent
in 2008 and 26.1 per cent in 2009. However, there are two problems with these data: the first series as
offered in the corresponding table is not equivalent. In fact, until 2007 the figures provided (that match
those given here) do not take into account the transfer of incomes to population in the form of bonds,
while the figures for 2008 and 2009 do include this. The second problem is that, although the source is
cited in the table as ‘data from INE UDAPE-Household Survey’, neither INE, nor UDAPE have posted
this information on their websites (as of 27 April 2011).
26
(e) Estimated data
Indeed, government revenue grew at an average of 19.2 per cent between 2006 and
2008
29
thanks largely to higher taxes on hydrocarbons, which almost doubled from
6,904 million bolivianos in 2005 to 12,779 million bolivianos in 2008. Part of this
increased revenue was allocated to social expenditure, which rose from 17.6 per cent of
GDP in 2005 to 18.4 per cent in 2008. However, the scope for improvement was not
fully exploited. The increase in government spending was less than the rise in its
revenue, but it opted for a fiscal policy which favoured maintaining large surpluses in
the public budget, averaging 3.1 per cent of GDP between 2006 and 2008
30
(see Figure
8) — much too large considering Bolivia’s productive and social needs.
31
Indeed, the
highest levels of total social spending attained in 2008 (18.4 per cent) remain lower than
the peak reached during the neoliberal period (18.8 per cent in 2002 and 2003).
32
30%
35%
40%
45%
50%
2005 2006 2007 2008 (p)
% GDP
Figure 8: Public Revenues and Expenses
Total Revenues
Total Expenses
Source: Own calculations based on data from UDAPE
(p) Provisional data
Thus, as was the case in the productive dimension, the MAS government has not
achieved structural transformation of the distribution pattern of the Bolivian economy.
29
Own calculations based on UDAPE data.
30
Own calculations based on data from the Ministry of Economy and Public Finance.
31
Recent data provided by the Ministry of Economy and Public Finance suggest that the surplus fell to
0.1 per cent in 2009 (most likely as a result of the effects of the global economic crisis on gas prices and
consequently on the Bolivian government revenue). However, the fact that in 2010 it recovered to 2 per
cent, and that data for the first two months of 2011 put the surplus at 1.9 per cent, would support the
interpretation presented here.
32
Data from UDAPE.
27
We find ourselves agreeing with Ortiz and Schorr (2008: 9) when they say that there is
‘a hard core of poverty... that cannot be reversed by implementing targeted policies’.
CONCLUSIONS
The development strategy proposed by the MAS when it came to power aimed to
reverse two trends: the longer-term primary export trend, and the more recent trend
related to the consequences of implementing structural adjustment policies. The latter
had, overall, reinforced existing patterns in three ways: through a salary adjustment that
was regressive with respect to income distribution, leading to a worsening of the
material living conditions of much of the population; through the further
transnationalization of the economy, following the selling-off of most public enterprises
(for instance in the energy sector) to foreign companies; and by intensifying productive
specialization in the extractive sectors.
Of these three elements, transnationalization is the only one in which any significant
reversal has been achieved by regaining sovereignty over the ownership of natural
resources and over a larger part of the revenues they generate. While these changes are
due to policy decisions, their positive impact on economic performance is largely the
result of the favourable conditions for commodity exports.
This brings us back to the key question mentioned earlier regarding the potential for
Latin American governments to take advantage of favourable circumstances to
transform their extractive models. There is general agreement that both the typical
structural conditioning of the primary export model and the neoliberal legacy weigh
heavily on governments that attempt to make significant changes. However, as noted in
the introduction, it then becomes necessary to specifically address the role of political
variables in mediating the relationship between natural resource abundance and
economic performance. In this sense it is possible to say that the obstacles are not only
structural; some are derived from the contradictions of the development strategy itself.
With this in mind, there are several lessons to be learned from the Bolivian experience.
First, changes are needed in the regulatory framework of the hydrocarbon sector which
28
allow the state to regain control over these activities because, as the development
strategy makes clear, they determine the conditions for future development. This
includes changes to articulate the proper management of hydrocarbon income in line
with the proposed development objectives. This income can be allocated to different
investments and there must be a balance between urgent needs and a sustainable
development strategy in the medium and long term.
Second, clarity of definition is important when extractive industries are considered to be
‘strategic’ (including mining, where no changes have been made to the neoliberal
framework, even though this is the fastest growing activity); such industries should not
then be thought of as mere generators of surpluses. In this context, maintaining the
status quo is significant because changes made to more fully participate in global
markets have led to an even greater expansion of mining activities.
Third, the MAS government could have benefited from several additional elements: (a)
significant changes in the distributional pattern which would bring about changes in the
property regimes of certain productive assets, such as land; (b) greater motivation for
the development of new sectors offering better job opportunities; and (c) a better
balance of power between employers and workers, which would ensure substantial and
sustained increases in real wages in the private sector. Only through social policies has a
slight improvement been achieved in terms of personal income distribution, as shown
by the trend in the Gini Index. The effect on poverty reduction overall has been greater,
but is still insufficient considering the magnitude of the problem and the favourable
economic and fiscal situation.
A major cause for concern in this context is the economic sustainability of these
improvements and their political significance. Any improvements have been the result
of changes in hydrocarbon revenue, which derives from an activity that is still, at least
in part, beyond state control (for example, where investment is concerned). It is also
extremely volatile because of the instability of international commodity prices. By
political significance, we are referring to the supposed social legitimation that the
current development strategy could acquire by combining resources set aside for social
transfers with intensification of the primary export model. In the case of Bolivia,
intensifying extractivism cannot be legitimized even as a support mechanism for
29
distributive social policies. Mining development lies behind much of the growth of
extractive activities, but measures similar to those adopted in the hydrocarbons sector
were absent from mining, at least during the first MAS term.
Fourth, the role of government in the economy is a common element in the two
questions raised earlier. In the Bolivian context, an analysis of the results of MAS’s
development strategy raises doubts about the management capacity shown so far and
the availability of resources required for the proposed objectives. This leads to the fifth
and probably most significant issue, which was touched upon above when we referred
to the peculiarities in the make-up of the MAS and the plurality of movements, visions
and interests that came together to form this political instrument. There is no doubt that
the most prominent of these were the indigenous movements, both in terms of their
importance and their unique imprint on a left-leaning Latin American government. As
we previously anticipated, and now have more grounds to confirm, while it is true that
this amalgam facilitated the coming to power of an ‘alternative’ to neoliberalism, it
seems no less true that it has hampered the design of a clear development strategy
because of the variety of different positions.
Despite these limitations, the shift in development strategy and the pre-existing
favourable international economic conditions have laid the groundwork for more
fundamental changes in the medium term. However, there is a difficult balance to
achieve between the extractive strategy and the ‘indigenous–environmentalist’ discourse
of Evo Morales and the MAS. Moreover, this discourse has failed to face the class
question, at least during MAS’s first term of office, and this limits its ability to improve
the pattern of distribution.
30
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Ricardo Molero Simarro is a researcher at the Departamento de Economía Aplicada I
of the Universidad Complutense de Madrid, Spain and Professor at the Instituto de
Altos Estudios Universitarios, Spain. Ricardo is co-author and co-editor of two books
on development problems in Latin America, and has published articles and working
papers in different international journals and research institutions.
María José Paz Antolín (corresponding author) is currently Professor of Economics at
the Universidad Complutense de Madrid, Spain (e-mail: mjpazant@ccee.ucm.es). She
has coordinated and participated in research projects in the fields of international
economics and development. Maria José’s work has been published in various
international journals; she has also (co-)authored three books and many book chapters
and working papers.
