Counter-Hegemonic Forces and the Bolivian Meltdown

 Counter-Hegemonic Forces 

and the Bolivian Meltdown:

a beggar seated upon a throne of gold 

(qtd in Morales 141)

by

Dennis Morgan

PSC328 Fall 2003

Otherwise, the Bolivian president's advisers recalled him as saying, 

"I may be back here in a year, this time seeking political asylum."

NEW YORK TIMES, 23 October 2003

The World Bank (WB) and the International Monetary Fund (IMF) helped to create a counter-hegemonic force through the implementation of their Structural Adjustment Loans (SALs).  Bolivia represents the latest example of a meltdown in government legitimacy in the developing world.  Anti-globalization forces appear to gather their greatest strength around issues of natural resources and assets perceived as national wealth.

Bolivia belongs to a unique national class of counter-hegemonic force.  Government policies became tied to debt loads and not to any specific development strategy.  The cost has been passed to those who can least afford.  The Vice President was able to stabilize the government, after six weeks of violent protests, by acknowledging the oppositions view: “Bolivia is still not a country of equals. We must understand our peoples, our (indigenous) Quechuas and Aymaras” (“Bolivia to examine,” par.11).

The highland Indians are the largest percentage of the population in Bolivia.  The Aymara represent the descendents of one of the oldest Andean Kingdoms Tiwanaku (A.D. 600).  The Quechuas are the surviving “cheerful and sociable” Inca in the region (Morales 15).

Historical Perspective

The modern period arrives in Bolivia as with much of the world during the French Revolution.  Napoleon invaded Spain and divided the government leading the colonies to follow the examples of the U.S. and Haitian rebellions (Klein 89).  Bolivia declared independence in August of 1825; the name was to ensure the support of their leader Bolivar (Klein 100).

What independence brought the country was a return to a subsistence rural form of life for the majority indigenous population.  Elite control remained in national form with limited capitol resources, but rich mineral wealth to be extracted. (Klein 102).  General expansion in de-facto free trade in the region was interrupted in the 1870’s by war with Chile.  Bolivian armies were destroyed by 1879, Chile controlled the coastal area and contrary to fears the Chileans had no interest in the highlands (Klein 142).

If the period seems remote, the event must be as relevant as Abraham Lincoln to American politics.  Bolivians have not forgotten why their country is land-locked.  This is one of the many small details the IMF ignores as it recommends policy.  The strongest evidence in support of this idea comes from the inside not the outside.

Stiglitz Perspective

    Joseph Stigliz who worked for the WB is one of the most outspoken critics of the IMF SALs.  The heart of his thesis is that the consultations with countries are one sided affairs that take little real data into consideration.  The emphasis on macro economic sense leaves few resources to monitor the impact of policies on poverty.  The answer to unemployment is to lower wages;  low unemployment figures mask cycles of poverty in the implementation of Washington Consensus policies (Stigliz).  Neo-liberal solutions to agriculture are only advocated for developing nations and rejected in practice by the west.

The IMF ignores Keynes cautionary arguments, “for if the supply of labour is not a function of real wages as its sole variable, their argument breaks down entirely and leaves the question of what actual employment will be quite indeterminate” (8).  The irony is that the warning was one of the reasons for the creation of both the WB and IMF.  The criticism from Stigliz calls for a roll to be played by the government where the markets produce less than desired results.

Bolivian Perspective

The quote at the beginning of the paper perhaps gives the best insight into the predictability of the meltdown in Bolivia.  The politicians understood the difficult political realities they faced.  It is difficult to describe six weeks of protest and the resignation of the president as a revolution.  However, the unity of the minors and peasant populations demonstrated the potential for a national counter-hegemonic force in Bolivia when neo-liberal policies demand too harsh a price.

The director of the Latin American and Caribbean Center at Florida International University in Miami said, “the U.S. insistence on coca eradication was at the core of Sánchez de Lozada's problem" (qtd in BBC).   The opinion is from a Bolivian scholar who represents another of the voices the IMF and WB tend to ignore.  This type of issue fits poorly into boiler plat macro economic prescriptions.  Perhaps what inspires national counter-hegemonic forces is the failure to see each country individually.

“The ways in which these processes unfold are not the same everywhere, and the meaning that ordinary men and women attach to the attendant changes in their lives as well” (Gill 12).  What laid the groundwork for the experiment in SALs was the ending of the last military junta in September 1982 (Klein 239).  The typical poor handling of the oil crisis left an mountain of debt and an economy in sharp decline; there was a positive response from the world to de-militarization of Bolivian society with the expulsion of foreign fascists including Klaus Barbie (Klein 240)

Most telling for the situation in Bolivia was the fact that service payments on the debt reached 80 percent of GDP in 1983 (Klein 241).  The crisis in Latin America was caused by large increases in interest rates due to the “tight money policy in the United States” (Stigliz 239).

  The poor paid the highest price, but for the Bolivian middle-class there was also a real impact, “the rampant inflation of the early 1980’s devalued their earnings, and the subsequent shrinkage of state agencies reduced a major source of middle-class jobs.  Between 1985 an 1991 the proportion of the Bolivian population employed by the state fell from 24 percent to 17 percent” (Gill 156).  Poor peasant are easy to suppress and the U.S. intervened in Bolivia both with the military and SALs, but when coalitions are found across classes revolution becomes a real possibility.

A large portion of the workforce in Bolivia remembers the six hundred percent increase in government payrolls between 1970 and 1977 (Morales 121).  The census of 1976 indicated positive gains in Bolivian society.  Spanish became the majority language indicating the success of the education system; there were 612,000 Qhechua and 310,000 Aymara Indians out of a population of 4.6 million who did not speak Spanish (Klein 237-238).

Bolivia suffered from over speculation that lead external borrowing to triple from 1971 through 1978; it was hard for investors, with a ready supply of petrol-dollars, to ignore the potential mineral wealth (Morales 156).  The crisis of the commercial banks forced the government to agree to an IMF stabilization plan in 1981 (Morales 157).  Neo-Liberal economic policies would be prescribed for each successive government.  

IMF recommendations remained little changed through 1994, that year the military had put down teacher protests against privatization of the school system (Gill 15).  Carol Graham, in her case study of Bolivia, highlighted the lack of national leadership for education reform (149).  This is hardly surprising given the recent history of modernization equals a larger public sector development patterns in the 1970’s.  

National policies of the eighties were requirements of the SALs from the IMF and WB.  The largest mass movement in the nineties was for ending coca eradication or restructuring the program to a less destructive force.  Majority public priorities were suppressed under IMF-debt based governmental decision making.

Counter-Hegemonic Perspectives

Predominate power can apply in class relationships in the Gramscian analysis of hegemony; counter-hegemony develops in subordinate groups (Cohen 136).  In Bolivia a coalition between the lower classes of society managed to gain major concessions from the government and remains a threat to the status quo.

The decreasing level of satisfaction should reach a point where individuals mobilize a counter-hegemony around socialist ideas (Cohen 136).  In the context of absolute poverty, there is the simple need for a social contract that the government has left unfulfilled.  “Social order is a sacred right which is the basis of all other rights (Rousseau 182).

Gramsci defined hegemony as a tool to examine the way in which relationships of power play themselves out; he studied the logistics of power to awaken the oppressed (Crehan 99).  The reduction of the public sector through SAL programs had certainly dissatisfied a large number in the middle class; a majority no longer believed their government and a melt down resulted.  The perceptions and direct impacts of economic policies are real forces, but there appears for now a slight minority for revolution in Bolivia.    

Subaltern Culture for Gramsci is by definition confused and incoherent; however keen their awareness of local realities of power, those trapped within subaltern culture remain incapable of grasping the larger landscapes of oppression in which they are located…the character of the subaltern culture is both a product of their dominated position and helps to perpetuate that domination (Crehan 205).

Counter-hegemonic forces, according to Gramsci analysis, develop from humble places, “…one individual moment in humanity’s strenuous, age-old struggle to acquire awareness of what it is and what it is to become, to grasp the mysterious rhythms of history and to disperse the mystery which surrounds it, to become stronger in our thought and in our actions” (Gramsci 57-58).  As with bad policy, the correct policy in the wrong place and time should find natural opposition.

Gramscian analysis is also a call to create counter-hegemony forces in the tradition of Marxist thought (Cohen 136).  The deeper implications of counter-hegemony developing are beyond the focus of this paper, but are evident in practice in the Bolivian meltdown; dissatisfaction reached a breaking point for several key reasons.

The Bolivian Meltdown

In the early 1990's, Bolivian officials distributed American money — $300 to $2,500 per farm — and told us to try yucca and pineapples. But 60 pineapples earn us only about eight bolivianos (about $1). And unlike coca, yucca and pineapples are difficult to carry to the cities to sell, and they spoil. So many farmers returned to growing coca.

… To me, real success in the war on drugs would be to capture and prosecute the big drug traffickers, and for the United States to stop its own citizens from using drugs. The war on the cocaleros has brought Bolivia nothing but poverty and death. 

Leonida Zurita-Vargas - Bartolina Sisa.

NEW YORK TIMES - 15 OCTOBER 2003

President Gonzalo Sánchez de Lozada's free-market, pro-United States policies were not to blame for Bolivia's economic woes. A more reasonable conclusion would be that hitching Bolivia's future to coca cultivation could relegate it to permanent backwater status.

JOHN P. WALTERS
Director, Office of National Drug Control Policy
Washington, Oct. 20, 2003

Bartolina Sisa quoted above is a peasant movement with very specific concerns.  However, the meltdown was not only supported by the poorest.  “Elegantly dressed women banged pots and pans in protest, and as a sign of mourning for those killed over the past week, many businesses hung the red-yellow-and-green Bolivian national flag with black ribbons added in the center or black bunting put around the edges” (Rother, par. 18).

Neo-Liberal economic policies, most importantly the shrinking of the public sector, resulted in a meltdown of legitimacy in the Bolivian government.  General dissatisfaction also reduced the minimal support for coca eradication, which is vital to the continued support from the United States.  A deal to export natural gas through Chile seems to be the symbolic flair (Rother, par.3).  As mentioned above, Chile is a traditional enemy to the Bolivian people and the reason Bolivia is landlocked.

After Vice President Mesa assumed power, he confirmed that the decision to sell natural gas and through what country will be one of his top priorities; he promised a referendum to decide the matter (“Bolivia to examine” par. 6-7).  Indian leader, Felipe Quispe stated the government had ninety days to stop the sale and stop coca eradication or face new demonstrations (par. 15).  The second condition seems the most problematic for the Bolivian transitional government.

The first case of violence after the protests was the detonation of a bomb by remote control as Bolivian soldiers moved down a trail in a Coca producing region; one soldier was killed and seven others wounded (“Bolivia Soldier Killed” par. 1-2).  One message of the protests reported October 15, “no to the export of gas and other natural resources; no to free trade with the United States; no to globalization in any form other than solidarity among the downtrodden peoples of the developing world” (“Bolivia’s Poor’ par. 2).  However, coca eradication should not be underestimated as a source of mobilization for the protestors.  

An issue as complex as coca to the Bolivian Indians is seen as a simple issue of right and wrong from the American perspective; unfortunately the demand for cocaine in the U.S. is not taken as such a clear cut issue.  Michael Shifter, from the Washington based policy group Inter-American Dialogue, stated, “To the extent that the U.S. pushes on eradication targets without any kind of flexibility, it makes people there much more amenable to turning to violent protest” (“Bolivian Leaders Ouster” par. 9).  The leader of the coca growers came in second place in the last election prompting the U.S. embassy to suggest his election would be a “hostile act” and would end aid to Bolivia (par. 17).

Conclusion

The WB and the IMF helped to create a counter-hegemonic force through the implementation of their SALs in Bolivia; sharp reductions in the public sector helped to raise the number of dissatisfied.  Right or wrong the policy aggravated the latest meltdown in government legitimacy in the developing world.  Bolivian protests also gathered strength around the issue of natural gas sales and perceptions of Chile as a historic enemy.

Government policies became tied to debt loads and not to any specific development strategy and a national counter-hegemonic force appeared to oppose Bolivia’s relationship with the IMF, WB and United States.  As with most cases in the developing world, costs were passed to those who could least afford.  The Vice President was able to stabilize the government, but would be wise to remember “successful transitioning countries were pragmatic–they never let ideology and simple textbook models determine policy” (Stigliz 186). 

Keynes argued the problem with orthodox economics was, “in the lack of clearness and of generalities in the premise” (v).  The IMF and WB policies can be tied to national counter-hegemonic forces in Bolivia developing and the meltdown offers a clear lesson in the growing form of Latin-American democracy: violent protest.  What the future holds for Bolivia for now involves a continued strong relationship with the IMF and WB, but gaining consensus and increasing support for their policies has become a much greater task.

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