Bolivia’s Crisis of

Governance

Peter DeShazo
Phillip McLean

Policy Papers on the Americas

Volume XVI, Study 3

December 2005

THE CENTER FOR STRATEGIC &

INTERNATIONAL STUDIES
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Bolivia’s Crisis of
Governance

Peter DeShazo
Phillip McLean

Policy Papers on the Americas

Volume XVI, Study 3

December 2005
About CSIS
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CSIS Americas Program Leadership

Peter DeShazo, director, Americas Program
Viviane Leffingwell, manager, Americas Program
Armand Peschard-Sverdrup, director, Mexico Project
Kristin Wedding, research associate, Mexico Project
Tanya Primiani, research associate, Canada Project
© 2005 by the Center for Strategic and International Studies. All rights reserved.

This report was prepared under the aegis of the CSIS Policy Papers on the Americas
series. Comments are welcome and should be directed to:
CSIS Americas Program
1800 K Street, N.W.
Washington, D.C. 20006
Phone: (202) 775-3150
Fax: (202) 466-4739
Web: www.csis.org/
Contents

Introduction..................................................................................................1

Panel I. The Governance Crisis: Causes and Effects...................................3

Panel II. The Governance Crisis: What Can Be Done? ...............................6

Working Lunch: Discussion and Conclusions.............................................9

Conclusions................................................................................................11

About the Authors......................................................................................12

iii
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Bolivia’s Crisis of
Governance
Peter DeShazo and Phillip McLean

Introduction
Bolivia remains in the midst of a deep political crisis, notwithstanding the election
of Evo Morales on December 18 by an absolute majority of votes. The
manifestations of this crisis have been readily apparent during the past three
years, highlighted by the forced departure from office of two presidents, but its
roots go back much further. The crisis is marked by a sharp decline in the prestige
and authority of the state, the weakening of an already debilitated rule of law, the
near collapse of traditional political parties, increased ethnic and regional tension
and a clash between rival visions of Bolivia’s future that differ fundamentally.
Politics have become both fragmented and polarized. The era of government by
broad coalition among historic political parties has come to an end, with prospects
for the consolidation of an effective replacement in doubt. Political consensus is
in short supply and representative democracy under strain.
The Morales government that takes office on January 22 will face daunting
challenges if it seriously seeks to emerge from the crisis of government. It must
repair the damage done to legitimate state authority during the past tumultuous
years, rebuild relations between the executive branch and Congress, broaden
efforts at improving municipal and local government, and begin a long overdue
effort to promote transparency in government and fight corruption. On the
economic front, the new government must pursue strategies that promote
sustained economic growth and create jobs—jobs that allow Bolivians to be lifted
out of poverty. Urgent efforts must be made in health, education, housing, and
infrastructure. This requires investment, public and private, domestic and foreign,
and a key challenge will be to encourage an environment conducive to such
investment. Most importantly, Bolivia’s pressing social and economic needs will
not be met without improvements in governance—in the ability of the state to
effectively, democratically, and efficiently exercise its legitimate authority to
promote the common good.
On December 2, 2005, the CSIS Americas Program held a conference to
examine Bolivia’s crisis of governance, to analyze why it occurred and what steps
can be taken to promote more effective and legitimate institutions of government.
The event brought together six leading experts from the academic, government,
and media fields in an attempt to extract conclusions and lessons from the

1
2 Bolivia’s Crisis of Governance

Bolivian experience. The audience for the event included U.S., Bolivian, and
third-country government officials, diplomats, the media, academicians, and
representatives from international financial organizations, nongovernmental
organizations (NGOs), civil society, and the human rights community. The
conference was divided into two panels of three participants each, with a working
luncheon to broaden discussion and develop conclusions.
This report summarizes the work of the two panels and the luncheon
discussion and outlines the conclusions reached. The purpose of the conference
was practical—to provide policymakers in a wide variety of fields with an
analysis of the challenges involved in promoting effective governance in a
multiethnic, developing country. The conference was held some two weeks before
Bolivia’s December 18 general elections and therefore remarks by panelists
referring to the elections were made without knowledge of what the results would
be.
This conference and publication were made possible through support provided
by the Office of the Bolivia Mission, U.S. Agency for International Development,
under the terms of Award No. 511-G-00-05-00288-00.
The opinions expressed herein are those of the author(s) and speaker(s) and do
not necessarily reflect the views of the U.S. Agency for International
Development.
 Peter DeShazo and Phillip McLean 3

Panel I. The Governance Crisis: Causes and Effects

Panel I, moderated by Phillip McLean, a CSIS senior associate, sought

explanations for the current fragility of Bolivia’s political system. The speakers
looked at the historical background and underlying social trends, which revealed
some little-noted changes in the country.

Herbert S. Klein, professor emeritus at Columbia University and currently a

fellow at the Hoover Institution at Stanford University, began with a review of the
changing role of Bolivia’s peasant majority.1 Rural life following independence
was made up of tribute-paying indigenous communities and the hacienda system,
whose growth was particularly marked in the late nineteenth and early twentieth
centuries. The political upheaval of 1952 led to the de facto transfer of much of
the land in the highlands and valleys to the communities. The peasants thereafter
played a “passive” public role, first as allies of the Nationalist Revolutionary
Movement (MNR), which had led the 1952 revolt, and then the military, which
governed from 1964 to 1978.
The restructuring of politics and the economy under the succeeding civilian
governments involved the indigenous people little directly, but there was a
population shift as the eastern lowlands became the dynamic center of economic
growth and the settlement of El Alto around the airport on the cusp of the
altiplano above the capital city of La Paz became a major metropolis. In his first
term as president (1993–1997), Gonzalo Sánchez de Lozada (Goni) sought to give
the liberal economic reform program initiated in 1985 a political dimension by
adopting a popular participation law that set up 327 municipalities with local
elections and authority to spend (now 60 percent of national government
expenditures). These reforms and a further constitutional amendment in 2000,
which gave a role to pueblos indígenas (PIs) and other “citizens groups” (ACs),
helped undermine the major political parties. New ethnic movements, regionally
based parties, and one-man campaigns are flourishing under the new rules.
Popular mobilizations are substituting for orthodox politics—for example,
protests over the privatization of public water works in Cochabamba and La Paz,
the police strike in February 2003, the blockade of the La Paz gas works that led
to end of the second Goni administration, and the “cabildo abierto de Santa Cruz”
that generated a decision to elect regional prefects. Underlying the rise in political
activism are long-term trends in key social indicators, pointed out by Klein,
including impressive improvements in infant mortality, life expectancy, literacy,
bilingualism, and years of education completed.
Those claiming to represent these new ethnically motivated, increasingly
urbanized forces—of which Evo Morales and his Movement Toward Socialism

1
To view Herbert Klein’s presentation, please go to:
http://www.csis.org/media/csis/events/051202_washington_popular_protest_bolivia.pdf.
4 Bolivia’s Crisis of Governance

(MAS) party are the most visible—say they want a new constitution with a
corporate structure, ethnic-based representation, an end to gas contracts, an ill-
defined socialist state, and an end to the “Washington Consensus” and to anti-
coca campaigns. Klein contrasted the incoherent demands of the Morales camp
with Bolivia’s political collapse as manifested during the ill-fated government of
Carlos Mesa, resulting in a “cauldron of activity” but little progress in
establishing coherent governance. With regard to the regional autonomy issue,
Klein debunked the idea that Santa Cruz would separate from Bolivia. He
suggested that the overall outlook is for more social conflict, but Bolivia has
shown in the past that through constant negotiations it is capable of resolving
difficult political challenges.

Juan L. Cariaga, an economic consultant/writer and former minister of finance,

was pessimistic about the future.2 Bolivia’s core problem is the collapse of the
political party system that had been in place since 1985. Of the country’s 3.5
million voters, Cariaga claimed that 2.5 million are of what could be considered
middle class, but at this time the middle class lacks leadership. While current
economic conditions are favorable for Bolivia’s exports, the economy is held back
by a large informal sector, corruption, and lack of competitiveness (Bolivia
persistently ranks near the bottom in international measurements of the latter two
variables). Government bureaucracy remains too large and even when the
economy is growing at 3 to 3.5 percent, as it has been in recent years, it is creating
only 30,000 jobs per year when100,000 are needed. Unemployment and persistent
poverty have led to a rejection of orthodox economic policies.
Bolivia goes into the December 18 election with an unfortunate mix of public
attitudes: rejection of political parties, awakening of indigenous political
movements, disenchantment with past market-oriented policies, and awareness of
the richness of the country’s natural gas resources. None of the candidates is
being clear with the voters, who will have a hard time deciphering their stands on
important issues. Evo has no consistent program, but if elected—which Cariaga
believes is the most likely outcome—he will almost certainly pursue policies that
will inhibit new investment and lead to further deterioration of governance. He
will use the threat of political unrest to promote his legislative proposals and
move forward with plans for a constituent assembly. Morales’s principal rival,
“Tuto” Quiroga, would have a difficult time taking office, even if he wins more
votes than Morales, and would face innumerable challenges in asserting authority.
In Cariaga’s view, regardless of who wins, there will be a struggle over the
nationalization of the hydrocarbon sector, the date and composition of the
constituent assembly, the status of the new regional authorities, coca, and land
seizures. Since neither one of the leading candidates will have control of all the
instruments of governance (the two chambers of congress, regional prefects, the
armed forces and the police, and “the street”) required to govern effectively, the

2
To view Juan Cariaga’s presentation, please go to:
http://www.csis.org/media/csis/events/051202_cariaga_bolivia_presentation.pdf.
 Peter DeShazo and Phillip McLean 5

new president inevitably will be a “transitional” figure. The country therefore

faces years of instability and low investment.
In conclusion, Cariaga called for a “governance pact,” which he thought could
be organized by acting President Eduardo Rodríguez with the participation of a
group of “notable citizens before the inauguration of the new regime on January
22, 2006. That pact would attempt to discourage antidemocratic acts, reach
agreement on measures to promote economic stability and investment, secure
property rights, promote the industrialization of natural gas, and provide for
executive-legislative coordination and regional autonomy.

Luis Fernando Tapia, a professor at Universidad Mayor de San Andrés and

formerly among the advisers of Evo Morales, took a more optimistic view. He
also accepts that much of the current crisis, which he predicts will be long-lived,
is due to the decline of traditional political parties and the rise of civil society. The
parties, he argued, had ample opportunity between 1985 and 2000 to strengthen
their role as indispensable institutions, but they failed to do so. Instead, they
engaged in traditional patronage politics, turning a blind eye to corruption while a
“complex and multicultural” civil society took shape and rivaled them for
political influence, eventually winning out. Bolivians do not reject political parties
per se, he argued, but the individuals who headed the traditional and failed parties
of the post-1985 period.
Tapia claimed that, while the old political system based on traditional parties
that represented the “liberal/business bloc” is rapidly fading, a “new social bloc”
is taking shape but still in the process of formation. That movement remains
disunited, based on labor unions, peasant (campesino) forces, and civil society.
Evo Morales’s MAS, according to Tapia “a confederation of alliances,” has taken
advantage of this situation by galvanizing a network of social organizations into a
party whose appeal is based on a series of diverse demands, such as increased
production of coca, a rollback of privatization, nationalization of natural gas, and
a constituent assembly. Should the MAS become government, he argued, it would
rest on whatever coherence the conglomeration of these forces offers. In essence,
a desire for nationalized gas and a constituent assembly are the only two factors
that hold the movement together; without these unifying elements, he risks losing
power.
In Tapia’s view, there is a renovation of the party system going on. The
movements, often products of unions or other “syndical” organizations, cannot
substitute for parties because they do not have the broad mechanism of support
needed to govern, but they can provide an opportunity for formerly excluded
activists to serve “apprenticeships” on the way to becoming more conventional
political players. Evo’s MAS is already well on the way to being a party,
developing in a manner like that of the MNR.
Tapia sees the future constituent assembly as a vehicle to move from a culture
that encourages confrontation to one that leads to cooperation. The goal must be
an active effort to achieve greater political participation.
6 Bolivia’s Crisis of Governance

At the conclusion of the panel, moderator Phillip McLean offered

commentary on the effect of the narcotics issue on governance. Drugs have been a
consistent theme in U.S.-Bolivian relations since the mid-1980s, when the U.S.
Congress demanded action by drug-producing countries in the face of increasing
use of cocaine in the United States. After President Víctor Paz Estensorro agreed
to a major increase in antidrug operations in 1986, the United States promised to
maintain a high level of economic assistance. Clearly U.S. pressure was resented,
and when eradication programs finally began to achieve important successes some
10 years later, the economic disruption was severe.
Nonetheless, it is important to stress that Bolivia’s antinarcotics commitment
did keep the country from being labeled a “narcotics state” at that time, and even
now after some relaxation of controls by recent “transitional governments,” the
country is still producing just a quarter of what it was at the point of highest
production. Perhaps most important, over the last 20 years Bolivia has not
suffered waves of violence and corruption from drug mafias, as have other
countries that chose not to take a stand against the trafficking business.

Panel II. The Governance Crisis: What Can Be Done?

Panel II, moderated by Peter DeShazo, director of the CSIS Americas Program,
looked ahead to possible steps that could be taken to confront Bolivia’s crisis of
governance.

Tomasa Yarhui Jacomé was the first Quechua woman to serve as a minister of
state in Bolivia, having been named minister for peasant, indigenous, and first
peoples affairs in 2002.3 She opened her presentation with a broad description of
the state of indigenous participation in Bolivian politics, underscoring that central
government and traditional political parties traditionally overlooked the country’s
indigenous majority. Although indigenous representation in Congress eventually
grew to considerable size, spread out among many parties, Yarhui noted that a
mere 1 percent of public employees were indigenous and that indigenous peoples
had little role in decisionmaking within Bolivia’s traditional parties, which had a
strongly urban orientation that translated into lack of attention paid by the central
government to peasant/campesino problems. Exclusion of the indigenous from the
decisionmaking process, she claimed, holds back effective governance in Bolivia,
limiting the legitimacy of the state in the eyes of the indigenous and limiting the
country’s potential for economic development. She highlighted a number of
variables affecting potential for improved governance.
ƒ Effective governance is a two-way street, requiring responsibility both
from governors and the governed. In the case of Bolivia, the plethora of
3
To view Tomasa Yarhui Jacomé’s presentation, please go to:
http://www.csis.org/media/csis/events/051202_yarhui_speech.pdf.
 Peter DeShazo and Phillip McLean 7

immediate demands from fragmented civil groups holds back long-term

prospects for Bolivia’s development. Frequent protests have heightened
unemployment and worsened the economic situation for all. Elitist
behavior of governors and lack of responsibility by the governed have left
Bolivia’s needs unmet. A new outlook that seeks the “common good”
must take shape.
ƒ Bolivia’s political parties do not effectively represent “popular interest”
and have been largely replaced by civil society, but this is not an effective
solution. Political parties are necessary in a democracy and should be
revived and reformed.
ƒ Bolivia needs a new “social pact” that could arise from the successful
drafting of a new constitution by a constituent assembly. Social inclusion
and widespread participation in politics by all sectors of society is the key
to avoiding confrontation and conflict. Bolivians need to acquire a sense
of “common destiny” which is currently lacking.

Juan Carlos Rocha, the editor of the leading La Paz daily La Razón, opened his
presentation by describing the current state of affairs in Bolivia as a “historic tie”
(empate histórico) of a social nature transferred onto the political stage.4 The
December elections closely mirror this “tie” underscoring the “ungovernable,
unstable, and fragile” present situation. Though the country has maintained its
democratic status since 1982, the past three years have been among the most
difficult Bolivia has ever experience, and he predicted that “the profound crisis of
governance that Bolivia is experiencing will not end on election day.” Instead, he
predicted, the election will put an end to the “undeclared social truce” of past
months, and a new cycle of conflict will commence.
According to Rocha, Bolivia is going through more than just a crisis of
governance, rather a “process of historic changes” related to the rapid rise in
participation by new social and political actors, specifically Bolivia’s indigenous.
He described the upcoming election as a “high-risk bet” because it is very likely
that whomever wins the presidency will have a weak mandate on which to rule,
leaving the country submerged in the “tie” he outlined earlier. If Morales wins the
presidency—and he is ahead in the polls—the forces led by Jorge Quiroga would
control the Senate and most departmental governments.
Rocha feels that Bolivia faces one of two possible outcomes as a result of the
elections. The first is a “disaster.” That would be triggered by a victory of
Morales or Quiroga by less than six to eight points, condemning the future
government to one of transitional status not unlike the failed regimes of Sánchez
de Lozada and Mesa, with greater social fragmentation, regional tension, and
confrontation. The second outcome—harder to bring about—would be one of
national “coming together” (concertación) around a common agenda based on a
moderation of positions rather than greater polarization. This would require
4
To view Juan Carlos Rocha’s presentation, please go to:
http://www.csis.org/media/csis/events/051202_rocha_remarks.pdf.
8 Bolivia’s Crisis of Governance

historic change for Bolivia: the putting aside of personal and small group needs in
favor of the national good. The possible vehicle for this process could be the
future constitutional assembly and referendum on regional autonomy, although
these processes will ultimately fail if a greater degree of political consensus does
not emerge following the elections.
Profound change is needed in Bolivia—on the “rules of the democratic game,”
on the role of the state in the economy, in the well-being of Bolivians—Rocha
argued, but the programs offered by the two leading candidates are “radically
contradictory” in outlook. Nonetheless, if the new government is to succeed, it
must convert itself into a government of national unity, seeking “an agenda of
basic consensus” on five key issues confronting the country:
ƒ constitutional assembly
ƒ regional autonomy
ƒ policy on hydrocarbons
ƒ policy on landholding
ƒ macroeconomic policy, especially openness to a free trade agreement with
the United States
According to Rocha, only the second option, that of increased consensus, can
solve Bolivia’s problems; although at this time it seems “virtually impossible,” it
is the only hope. National dialogue must include all sectors: politicians,
intellectuals, the media, unions, and campesinos. This outcome requires hard
work and a “new political ethic” that all Bolivians must pursue.

Eduardo Gamarra, director of the Latin American and Caribbean Center at

Florida International University, looked back at some of the key developments
influencing current events in Bolivia and then forward to predict that none of the
likely outcomes of the December 18 elections will ensure stabile governance.
Instead, he forecasts a period of “severe turmoil” ahead, marked by high levels of
political and social mobilization.
Bolivia’s current turbulence, according to Gamarra, is in part the product of a
revolution of expectations first unleashed with the national revolution of 1952,
which has now picked up considerably, pitting rising expectations against very
weak political institutions. He singled out the failure of political parties in Bolivia
as a particularly prominent variable in this mix. Rising expectations were
stimulated by the liberal economic and political reforms of the 1980s and 1990s,
especially related to political decentralization, but without strengthening the
institutions of the state. Ironically, therefore, the liberal reforms helped bring
about the demise of the very system they created.
Gamarra differentiated current variables in the political scene along the lines
of the “good,” “bad,” and “ugly.” In the first category, he underscored that
Bolivia is in the midst of a long period—perhaps the longest in its history—of
unbroken democracy and that this process has produced an indigenous candidate
 Peter DeShazo and Phillip McLean 9

(Evo Morales) for president who has a strong chance of winning. Morales, he
argued, will have the opportunity to attack Bolivia’s long-term ills of
authoritarianism, corporatism, and patronage politics while making “rational” use
of national resources. In doing so, he comes up against the “bad” characteristics
of the country: strong social exclusion of indigenous populations, widespread
poverty and inequality, and what he described as “multidirectional racism,” which
cuts both ways between the indigenous and nonindigenous. These factors
underscore the “ugly” variables: that the results of the December 18 election
might not be respected, lack of agreement on the democratic “rules of the game,”
a still-latent authoritarianism, and continued racism.
Taking these considerations into account, Gamarra laid out six possible
outcomes to the December 18 elections, all influenced by the fact that Bolivia is
polarized and atomized at the same time—referring to the concept of the “tie”
mentioned by Rocha. In each of the scenarios, he laid out the conditions under
which different actors/variables (government, opposition, “the street,” armed
forces, police, regional leaders, international) might respond, starting with what
he considered the most likely scenario, Evo Morales winning by a slim margin, to
the least likely, Jorge Quiroga placing second but still elected president during
second-round voting in Congress. None of these solutions bodes well for solving
Bolivia’s problems, according to Gamarra. Beyond the elections looms the
possibility of the constitutional assembly, whose success or failure will depend on
who is selected to participate in it, ideally carried out on as depoliticized a level as
possible. Gamarra also mentioned strong public desire to reform Bolivia’s penal
code to make it tougher on law breakers.

Working Lunch: Discussion and Conclusions

Alexander Watson, managing director of Hills & Company and former U.S.
assistant secretary of state for Western Hemisphere affairs, moderated a
discussion session following the two panels. Several new topic areas were
developed.
ƒ Should Evo Morales be elected, what will his policy on coca and
hydrocarbons be?
Eduardo Gamarra responded that the MAS would likely “run to the left and
govern from the right.” That said, he questioned whether the MAS and Evo
Morales really understood the implications of arbitration with the hydrocarbons
companies over changes in their contracts. He predicted that nationalization will
not occur but that there will be migration of contracts from joint-venture deals to
service contracts. While the nationalization of Petrobrás would not be something
most politicians in Bolivia would want, political positions across the board
suggest a larger future role for Bolivia’s state hydrocarbons corporation (YPFB).
Regarding coca production, he expressed criticism of past U.S. drug policy, while
stating that the U.S. embassy in La Paz has been careful not to become a factor in
10 Bolivia’s Crisis of Governance

the electoral campaign and that the United States is not making threats to
decertify Bolivia should coca production be resumed in the Chapare. The United
States should engage with Evo Morales, not disengage, he opined. Disengagement
would push in a direction that is contrary to U.S. interests.
Luis Fernando Tapia expressed the view that Bolivia’s economic policy would
not change much under a possible Morales government—that Evo would instead
“consolidate” reforms that have been made. YPFB would be rebuilt to control the
hydrocarbons sector, but the MAS would not call for confiscation of foreign
hydrocarbon holdings but bring them under the tutelage of YPFB. Brazil, he felt,
could live with an arrangement like that.
ƒ To what extent is Hugo Chávez a political factor in Bolivia?
Juan Carlos Rocha expressed the view that the cocaleros are a radical but
small minority of Evo Morales’s supporters and would not necessarily drive
policy. To help steer Evo along moderate lines, the United States should be the
first country to invite him to dialogue. As for Chávez, Bolivian public opinion
already rejected an expression of support for Morales by Venezuela’s chargé
d’affaires in La Paz.
Gamarra noted that the United States is overwhelming focused on Chávez,
viewing events in the region as a black-or-white divide depending on who sides
with him or does not. Though Chávez clearly has a large interest in Evo Morales
and his success, Evo exists because Bolivia, not Chávez, produced him. If Chávez
and, for that matter, Fidel Castro are well-liked in Bolivia, that is a fact.
Herbert Klein argued that the United States should think less about Chávez
and concentrate its outreach toward Brazil. Referring to the previous question, he
felt that Bolivia would skate close to the abyss but not fall in.
ƒ Can effective government emerge from the election?
Tapia predicted that if Quiroga wins, he would try to form a government with
well-known figures drawn from his own “PODEMOS” movement and from Doria
Medina’s Union Nacional (UN) group. If Morales wins, the MAS program of
government would be widely negotiated, but the MAS could govern alone. A
UN/MAS co-government would be unlikely but still possible, although there is no
indication yet of a possible pact.
ƒ Will Bolivia separate into two nations?
Gamarra expressed the view that the MAS is the new MNR—multicultural
and multisectoral—capable of bringing people together in a continuation of
government by pacts. Evo is well known to Bolivians, having been active since
1985. In outlook, he is authoritarian and corporatist. As for Bolivian regionalism,
he stated that opinion polls show that the people of Santa Cruz department have a
stronger sense of country than others in Bolivia and that there is a prevalent desire
to construct a country rather than draw away from it.
Klein observed that Bolivia is moving from a central state to a federal state in
which “everything is open, everything negotiable.” The future process will be one
of redefining what the nation is.
 Peter DeShazo and Phillip McLean 11

Tapia saw value in the clash of ideas: that conflict would force negotiation
and that the resolution of conflict by negotiation gives legitimacy to the results.
ƒ Is a constituent assembly a good idea?
Juan Cariaga argued that Bolivia’s constitution should be amended but not
scrapped. Bolivia’s problems do not arise from the constitution but from the fact
that nobody obeys it.
Tapia reiterated his earlier statement that real democratization in Bolivia can
only come about through a constituent assembly, but determining who will
participate is a difficult task.

Conclusions

Below are some general conclusions reached from the discussions:

ƒ Bolivia’s current crisis of governance has deep roots reaching back to the
period of the national revolution of 1952 but especially related to the liberal
reforms of the 1985–2000 period, which promoted political decentralization.
ƒ The crisis is highlighted by a lack of effective government, the near-demise of
traditional political parties, an atomized yet polarized political environment,
pressure against a weak state from incoherent demands from a broad array of
civil society organizations, and weak institutions. Political mobilization has
become a substitute for political parties.
ƒ Bolivia is going through a process of dramatic political chance, leaving behind
the “government pacts” of the 1985–2000 period, which was dominated by the
traditional parties (MNR, ADN [Nationalist Democratic Action], MIR
[Movement of the Revolutionary Left]), but with no new system yet in place.
While there is opportunity for progress in the cauldron of change, there is also
risk of still greater instability.
ƒ Future politics in Bolivia will feature far greater attention to the concerns of
the indigenous majority.
ƒ The December 18 elections are unlikely to produce a result that will reverse
the crisis. High levels of political and social mobilization, perhaps turmoil,
will continue to characterize the national environment. Evo Morales’s MAS
party is more of an alliance of disparate groups than a political party. Its future
as a party will depend on forging a unified program out of its many
component parts.
ƒ Whatever government takes office on January 22 will be debilitated by a weak
mandate, lack of control of congress, strong but conflicting social and
economic demands placed on it, weak state institutions, lack of consensus on
moving the country forward, and a doubtful economic panorama.
ƒ Evo Morales is unlikely to nationalize the hydrocarbons industry outright but
would instead put into practice the highly restrictive terms of the 2005
Hydrocarbons Law. To do so, he will have to resist considerable pressure
12 Bolivia’s Crisis of Governance

from within his camp for nationalization. His economic policies have not been
clearly expressed, probably reflecting confusion and uncertainty on how to
handle economic issues.
ƒ Bolivia cannot emerge from its political crisis without achieving some kind of
national consensus, although there was little optimism that it would happen.
Panelists termed this process a “concertación,” a “social pact,” and a
“governance pact.” To do so, Bolivians would have to put aside parochial
claims in search of the “national good.”
ƒ One vehicle identified as a possible means of promoting greater consensus is a
future constituent assembly, recognizing, however that the success of such a
process would depend on first achieving basic agreement on rules for carrying
out the assembly, a difficult task.
ƒ Although pressures for greater regional autonomy remain strong, perhaps even
to the point of the nation redefining itself, the department of Santa Cruz will
not separate from Bolivia.

About the Authors

Peter DeShazo is director of the CSIS Americas Program. Previously, he was
deputy assistant secretary of state for Western Hemisphere affairs. During his
career in the U.S. Foreign Service, he served as deputy U.S. permanent
representative to the Organization of American States (OAS), where he was chair
of the Committee on Administration and Budget. He also directed the Office of
Public Diplomacy and Public Affairs of the Bureau of Western Hemisphere
Affairs at the State Department and served at U.S. embassies and consulates in La
Paz, Medellín, Santiago, Panama City, Caracas, and Tel Aviv. DeShazo received
his B.A. from Dartmouth College and Ph.D. in Latin American history from the
University of Wisconsin at Madison and did postgraduate study at the
Universidad Católica de Chile. He was a Fulbright scholar, Reynolds scholar, and
Ford fellow and is the author of Urban Workers and Labor Unions in Chile,
1902–1927 (Wisconsin, 1983).
A senior associate at CSIS, Phillip McLean served more than three decades in
the U.S. Foreign Service. After retirement from government in 1994, he was
appointed assistant secretary for management at the OAS and served as an adviser
to OAS secretary Cesar Gaviria until 1997. McLean's early Foreign Service
postings included Brasilia. For a time, he specialized in Panama Canal
negotiations and served at the U.S. embassy in Panama. His first experience with
the Andean countries was in Bolivia in the mid-1970s. In the mid-1980s, he led
the Department of State's Office of Andean Affairs. Later, he served in the U.S.
embassy in Bogotá, Colombia, and then as deputy assistant secretary with
responsibility for South America. McLean is a graduate of the National War
College and the Foreign Service Institute's intensive economic program. Educated
by the Jesuits, he received a master's degree in Latin American studies from
Indiana University.