The opportunity of Evo in Bolivia

Is Evo Morales’ victory in the Bolivian presidential election a threat or an opportunity to the political stability of Bolivia and the Andean region? Although Mr. Morales is seen by many as the former, we tend to think that Mr. Morales and a new national political and social pact in the country can turn out to be the latter.


Mr. Morales based his campaign on the discontent of the majority of the population with their government and, more generally, with their institutions, making emphasis on the pervasive inequality in the country. At the same time, he defended radical economic policies, including nationalisation of the extractive industries and a large role of the state in the economy.

This campaign started years ago along with the cocalero movement, making Mr. Morales a key actor in Andean politics. For this reason, he was invited to international fora despite the reluctance from political leaders in his country and Peru, where the government was worried about potential development of similar uprisings in the country. However, for the first time, he and his backers have earned legitimacy through the political system by clearly winning the presidential election. From being a social and political leader outside the political system, Mr. Morales has become president of a country with a majority of population of Amerindian ancestry but governed during the last century by a minority of European descendants.

The new government will have to deal with key issues from the beginning. First, it has to ensure that the democratic process in the country returns to normal. Second, the government will have to deal with the increasingly important secession movement in Santa Cruz, the richest province in the country. Third, Evo Morales has defended a process of nationalisation of the gas and oil operations of foreign companies. Fourth, the new government has to ensure that investment flows keep on entering the country.

Regarding the first issue, the victory of Mr. Morales is highly significant. For the first time, a candidate supported by the large majority of indigenous people has gained presidential power through a democratic process. This victory has now to be translated in a process by which indigenous communities become full members of the Bolivian society. From now on, Evo Morales should follow the inclusion policy that is essential to bring stability to the country. To achieve this, indigenous communities should be able to access state’s basic services, such as water and sanitation, health and education. At the same time a new political pact between parties has to be developed. Reaching agreement among different political parties and sectors of society is essential. The main political and economic decisions that the country face need large support and a long-term commitment in order to be successful. Bolivia has waste so far too much time in political disputes that have brought no progress to the country.

With regards to the secession movement in Santa Cruz, the government should be cautious and avoid confrontation. At the same time, it is important to address the problem quickly. For this to happen, it will be essential to accelerate the much needed decentralisation process. Larger autonomy has to be given to the provinces, in order to increase the effectiveness of the political system and respond to citizen’s demands. Resources will have to be distributed accordingly.

Regarding gas reserves' nationalisation, we seriously doubt that this is the appropriate decision. However, if this is the case, it will have to be carried out smoothly and ensuring the participation of the companies in the process. Foreign direct investment in the country is essential for its development and this process can seriously hamper investment flows. We believe that Bolivia will not be able to ignore foreign companies, as they have the technology essential for drilling and exploration.

Regarding the fourth issue, and learning from the experience in other Latin American countries, radical candidates soften their speeches as soon as they gain power. The need to attract foreign investment and aid flows from international organizations such as the World Bank and the Inter-American Development Bank is most often stronger than any populist economic reform (we should keep in mind that Venezuela is a special case because of its well-developed oil industry and vast reserves). On the contrary, Bolivia cannot ignore these funds. The role of the state could increase but not much, because the availability of internal financing is limited. In the end, they will have to agree to several fiscal and economic requirements.

We believe that most of the economic policies that Mr. Morales has announced will be very negative for Bolivia. However, except for the nationalisation process in the gas and oil industries, we are not particularly worried about economics. We believe that Bolivia’s dependence on foreign funds will force Evo Morales to readjust much of his populist policies.

However, we are much more concerned about the political outcomes of his presidency. For the first time, a large sector of society will have access to key posts in the government and its institutions, including the army and police. This will mean, among others, access to arms. If the society continues to be highly divided, we believe that this is highly risky in the medium and long term. Even discarding the risk of civil war, any protest ccould now be more violent. It is the responsibility of the government to avoid any attempt of violent social uprising.

On the political area, we –cautiously– believe that Mr. Morales could be an opportunity. The government has a unique chance to bring social inclusion and stability to the country, which is essential for economic development. In any case, the new government should recognized that any sustainable social inclusion policy will have to be closely link to sound economic decisions. Additionally, a new political pact will have to be built, and Mr. Morales will have the key responsibility for its achievement.

In order to foster social and economic development, Bolivia has a broad and complex agenda. For the next years, Mr. Morales will be leading the country and he has a unique responsibility and opportunity. Bolivia cannot afford to waste it.