The National Development Plan As A

The National Development Plan as a Political Economic Strategy in Evo Morales’s Bolivia Accomplishments and Limitations by Clayton Mendonça Cunha Filho and Rodrigo Santaella Gonçalves Translated by Ariane Dalla Déa

Bolivia’s National Development Plan is the most detailed official document on the objectives of Evo Morales’s administration and therefore an important reference point for the evaluation of the intentions, difficulties, and approaches of his political project. Analysis of the plan reveals bold objectives such as transforming the nation’s structure of development and making the country the energy center of the continent and more modest goals of reducing poverty and social inequality. The greatest advance in the first four years of the Morales administration is regaining state control of the economy; Bolivia has effectively changed its economic model from a predominantly free-market one to a mixed model in which state management of the basic sectors of the economy predominates. Changing the structure of development has taken second place to these changes, but the government has acted to promote the needed diversification by encour- aging environmental protection, guaranteeing workers’ rights, and providing improved access to credit. The implementation of some of the plan’s main features has been delayed by political opposition from the eastern part of the country, but with a congressional majority for Morales’s party in his second term further advances can be predicted. Given the plan’s limitations and moderation and the problems in its implementation, it is significant that Bolivia has witnessed an impressive increase in the gross domestic product and a decrease in income inequality.

Keywords: Bolivia, Evo Morales, National Development Plan, Neo-developmentalism, Twenty-first-century socialism

In the past decade, South America has undergone a process of left-leaning political transformation that has attracted great attention from both political activists and social scientists. Despite the substantial differences among the

Clayton Mendonça Cunha Filho is a researcher at the Observatório Político Sul-Americano, Instituto Universitário de Pesquisas do Rio de Janeiro (South American Political Research Center, University Research Institute of Rio de Janeiro), and a doctoral candidate in political science at the institute. Rodrigo Santaella Gonçalves is an undergraduate student in social sciences at the Federal University of Ceará and a member of the Rede Universitária de Pesquisadores sobre América Latina e Núcleo de Estudos para América Latina e Caribe (University Network of Researchers on Latin America and the Latin American and Caribbean Study Group). Ariane Dalla Déa, an anthropologist, teaches social problems at Chapman University and has been a translator in Los Angeles since 1987. A first version of this paper was presented at the Twenty- first World Congress of Political Science held in Santiago, Chile, in 2009. The authors thank Cesar Zucco Jr. for assistance with some indices and the editors of Latin American Perspectives for comments and suggestions on the original manuscript.

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Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 178 LATIN AMERICAN PERSPECTIVES parties and social movements that have attained power in various countries in the region, the process has frequently been described as an almost uninter- rupted wave (with a few exceptions) of consecutive electoral victories by leftist parties. In January 2006 the indigenous coca grower and political leader Evo Morales Ayma assumed the presidency of Bolivia, marking this country’s entry into the region’s progressive wave after three tumultuous years of mass popular mobilizations and protests that forced the resignation of two presidents and made Morales’s inauguration and government the focus of great attention and expectations. Within this leftist wave, Morales’s Bolivia is frequently cited as radical when compared with those of more moderate leftists such as Lula in Brazil and Tabaré Vásquez in Uruguay. However, for conservative critics this is an accusation and for activists on the political left a form of praise.

NEO-DEVELOPMENTALISM VS. TWENTY-FIRST-CENTURY SOCIALISM

The political and economic changes that Bolivia is experiencing today place it at the center of the contemporary debates on the direction and projects of the continent’s new leftist governments (Borón, 2008; Boschi and Gaitán, 2008; Fiori, 2007; Katz, 2007). Although some approach this subject from a Manichaean perspective, of limited explanatory value, that creates a dichot- omy between a bad (or populist) left and a good (responsible) left (with the more radical governments falling into the former category and the more moderate ones into the latter), a richer and more interesting discussion emerges from the distinction between the concepts of neo-developmentalism and twenty-first-century socialism. Starting from Boschi and Gaitán’s (2008) identification of neo- developmentalism as a new form of state intervention in the economy intended to increase national revenue and to guarantee social welfare while maintaining certain aspects of the preceding neoliberal model such as monetary stability and fiscal equilibrium, it is possible to find many similarities between contemporary Bolivia and this conceptual model of development. However, whereas in the neo-developmentalist model the state seeks not to act directly in the productive sector but only to regulate it, in the Bolivian case the state has taken a direct productive role in several sectors. Another important characteristic of the past few years in Bolivia that does not fit the neo-developmentalist framework is the state’s opening up of new forms of direct political participation, including collective forms that go beyond a liberal—that is, individual- based—logic and have been institutionalized in a new constitution in which the demands of social movements and governmental proposals occupy as central a position as any economic changes. These characteristics—a direct state role in production and expanded democratization—may place Bolivia closer to the twenty-first-century-socialism paradigm, in which, according to Enrique Dussel (2007) and Boaventura de Sousa Santos (2007), expanded democratization is at least as important as state intervention in the economy. The truth is, however, that there has been very little effective conceptualiza- tion of what would constitute the socialist project in this new century, and the various proposed classifications of governments differ, in general, only on the

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STRUCTURE OF DEVELOPMENT VS. ECONOMIC MODEL

Another theoretical approach that can be used to analyze the Morales government’s project for Bolivia is the distinction proposed by the Bolivian economist George Gray Molina (2006: 65) between the structure-of- development and the economic model. The structure refers to “the way an economy’s factors of production are linked, function, and work together or obstruct each other in the context of competitive advantages and disadvan- tages that may or may not drive a particular productive configuration.” In other words, it refers to the content or substance of the economy and especially whether it is narrowly or broadly based. In contrast, the model refers to the way these factors of production are administered—the economic form rather than the content, which may evolve in different ways (e.g., market- based, state-led, or mixed). Although its economic model has changed several times during Bolivia’s history, its structure of development has not. Development has always been a type of mono-production structured around the exploitation of a small number of primary natural resources, among them silver, tin, and gas. In contrast, the liberal or free-market economic model dominated in the early twentieth century, with very little state intervention in the tin industry; later, with the nationalizing of Standard Oil in 1937 and the 1952 Revolution (which resulted in nationalization of the tin mines), the economic model turned nationalist. In the 1960s Bolivia returned to the free-market model, and in 1969 it entered into its last statist period before the total reliance on markets that occurred during the neoliberal years beginning in 1985. At present, as is apparent from the nationalization of hydrocarbons in 2006, there is a new economic model in the country. The question is whether the state’s increased role in this new model will be sufficient to transform the country’s structure of development. Whereas neo-developmentalism seeks not to change the structure of development but to change the economic model, twenty–first-century socialism necessarily points toward structural change, and this makes the theoretical distinction between the economic model and the structure of development very useful for analyzing the long-term character and approaches of the Movimiento al Socialismo (Movement Toward Socialism—MAS) in Bolivia. This article seeks to analyze the path followed by the Morales administration in its first four years on the basis of the most detailed statement of its politico-economic intentions: the National Development Plan. In the first section we analyze the plan’s four main interrelated lines of action—social justice, democratization, economic development, and Bolivia’s international role—in an attempt to understand the political concept of national development that shapes the document. Next, we attempt to determine how effective the implementation of the plan has been and identify its concrete impact on Bolivian society, pointing to the unforeseen impediments to achieving its

Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 180 LATIN AMERICAN PERSPECTIVES goals. We conclude with an evaluation of the limits and accomplishments of the Morales government from the perspective of the plan.

THE NATIONAL DEVELOPMENT PLAN: OBJECTIVES

The Plan Nacional de Desarrollo: Bolivia Digna, Soberana, Productiva y Democrática para Vivir Bien, Lineamientos Estratégicos 2006–2011 (National Development Plan: Dignified, Sovereign, Productive, and Democratic Bolivia to Live Well, Strategic Directions 2006–2011), promulgated on September 12, 2007, by Supreme Decree 29.272, encompasses Evo Morales’s political economic agenda for his administration and constitutes the most detailed official document of the government’s objectives and political strategies. It presents as its main objective moving beyond a political economic order based on primary product exports and the political and social exclusion of the majority of the population. For this reason, it is divided into four sections, listed in the document’s subtitle (Dignified, Sovereign, Productive, and Democratic Bolivia) and incorporated into the concept of living well, which is derived from the Quechua principle suma qamana and is part of Article 8 of the new constitution. As the plan declares, “The new development proposal is based on the conception of living well, with origins in the indigenous cultures of Bolivia” (Ministerio de Planificación del Desarrollo, 2007: 11); it is centered on citizen and community development and rejects purely economistic and lin- ear concepts of material progress.

DIGNITY

Dignity for Bolivia requires the eradication of poverty and the formation of a wide network of social welfare and essential public services such as health care, education, and public security. The National Development Plan proposes to seek social justice through state action: guaranteeing the negative freedoms the lack of which undermines the exercise of citizenship (freedom from hunger, threats, etc.) by providing access to justice, security, and national defense and guaranteeing the positive freedoms that allow a person to act productively in society through the provision of education, health care, and basic sanitation—generating what the plan terms “social assets.” The social realm, according to the plan, must become the state’s main objective rather than an “adjustable variable” of economic growth (Ministerio de Planificación del Desarrollo, 2007: 43). One of the main goals of the National Development Plan is to eradicate the structural causes of poverty rather than merely to minimize their effects. This endeavor will be possible through the implementation of a network that includes education programs such as the Juancito Pinto student stipend,1 health programs aimed at fighting malnutrition, and incentives to promote communities’ self-development as well as solidarity and integration among them. The main objective in the health care area is universal access through the implementation of an intercultural, community-based family health system with the goal of making health care available to the entire Bolivian population by 2010 (see Johnson, 2010). In addition, the plan intends to restore the state’s

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TABLE 1 Social Indicators and Goals, 2006–2011

Starting Situation Goals 2006–2011 Implemented by the End of 2009

Drinking water and sanitation: Serve an additional 1,926,414 Served 863,254 2.6 million (26.9 percent) lack access to potable water; 4.3 million (44.3 percent) lack Serve an additional 2,057,750 Served 478,000 access to sanitation Collection and treatment of solid Invest US$11.5 million per year – waste: insufficient to increase and improve sanitation facilities and solid waste collection Sewage: limited network of sewage Serve an additional 1,314,778 – treatment plants Electric power: 1.42 million urban Increase coverage in urban – households and 271,000 rural areas from 90 percent to Increased rural coverage from households have electric power 97 percent, serve at least 33 percent to 47.5 percent (October 2007) 462,000 more households and businesses. Increase coverage in rural areas from 33 percent to 53 percent, benefiting 210,000 households Energy matrix: households use Build gas pipelines and install Served 60,000 additional liquefied petroleum gas natural gas in 150,000 households and reduced households price by half Housing: quantitative deficit of Build 45,000 housing units by Built 28,858 housing units 298,000 houses, qualitative the end of 2010 deficit of 855,000 houses Literacy: 3.6 percent (750,000 Teach 1.23 million individuals Taught more than 823,000; individuals) of the population age 15 and over to read and Bolívia recognized as over 15 years old are illiterate write “illiteracy-free”

Sources: Ministerio de Planificación del Desarrollo (2007: 47–48), Presidencia de La Repúblic’a de Bolivia (2009a; 2009b).

leading role in health education. In the area of education, the plan proposes not only to eradicate illiteracy but also to produce qualitative changes by pro- moting a creative, intercultural education that brings together the various Bolivian cultural identities. This involves, among other initiatives, the creation of indigenous universities, expansion of public universities in rural areas, and the promotion of research about Bolivian cultural diversity. Parallel to these proposals is a project to modernize the education system through the construction of 1,000 educational “tele-centers” by 2010. The plan also establishes bold and clear goals regarding access to drinking water and basic sanitation systems throughout Bolivian territory (Table 1). This section of the National Development Plan, which makes up a large part of the document’s noneconomic content, also deals with the nonquantifi- able sectors in which the government proposes qualitative changes such as access to the justice system, including full recognition of indigenous community- based administration of justice, and an extensive fight against corruption through an increase in public-sector transparency and popular participation. The plan also gives the cultural realm increased importance for the state

Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 182 LATIN AMERICAN PERSPECTIVES through the creation of the Ministry of Cultures and cultural development councils. To achieve the objective of valuing the knowledge and culture of Bolivian indigenous peoples that is highlighted throughout the document, the government proposes to “decolonize culture” (Ministerio de Planificación del Desarrollo, 2007: 97), appreciating and fostering the artistic and cultural expressions of indigenous groups and the peasantry. The plan identifies the country’s cultural richness and history as a great but underdeveloped source of employment and income. Of the more than 35,000 archaeological sites, many not yet effectively studied and documented, 500 have been identified as having high tourism potential. This section also refers to the key and problematic issue of housing. Estimates of the housing shortage are very high, with a quantitative deficit of 298,000 houses and a qualitative deficit of 855,000. To address this, the Social Solidarity Housing Program proposes creating 45,000 housing units by 2010 with the goal of establishing and consolidating mechanisms for providing access to dignified housing, giving priority to the low-income population through governmental grants and direct financing (Ministerio de Obras Públicas, Servicios y Vivienda, 2009). In addition, creating these housing solu- tions will generate construction jobs. Finally, in the area of national defense, the National Development Plan envisions a better distribution of armed forces throughout the national territory to create a more balanced state presence in the most remote areas of the country. This presence will be connected to social and economic development projects in the border areas through investment in infrastructure and incentives for the relocation of families to areas near border military posts, which will serve as support centers for colonization in these regions important for national security. It also envisions the modernization and restructuring of the country’s civil defense so that it can respond rapidly to natural or man-made disasters.

DEMOCRACY

Democratic Bolivia, the second main area of the plan, calls for the recognition of the country’s long repressed multiculturalism, real access to power for the historically excluded sectors, and social control over and transparency on the part of those who govern. The plan maintains that a deep democratization of Bolivian society is an essential condition for living well, conceptualiz- ing democracy “in its broadest sense as . . . [including] the political, economic, cultural, and social dimensions, and . . . [with] social justice and equitable distribution of the economic surplus, of opportunities, and of individual and communities’ rights” (Ministerio de Planificación del Desarrollo, 2007: 101). One of the main obstacles to effective democratization is the long-standing exclusion of the indigenous population and the peasantry from the institutions of governmental decision making, and therefore the plan identifies as fundamental the “refounding” of the state on a “plurinational” basis. Recognizing the negative effects of Bolivia’s extreme centralism, this section of the plan proposes to deepen departmental, municipal, and indigenous autonomy to decentralize the state and to bring government closer to the people.

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Figure 1. Bolivian Tax Revenue (Royalties and Direct Taxes) from Hydrocarbons and Minerals (top section) and Other Sources, 2004–2006 (IMF, 2007)

PRODUCTIVITY

Productivity for Bolivia requires a change in the structure of economic development, with a strong and active state directing the industrialization of Bolivian natural resources and the equitable distribution of wealth. The National Development Plan divides the Bolivian productive matrix into two main axes and two transversal ones. The first main axis encompasses the strategic sectors that generate surplus, including hydrocarbons, mining, electric power, and environmental resources. The second main axis involves sectors creating jobs and income, such as agriculture and cattle ranching, industry, manu- facturing, handicraft production, tourism, and housing. The transversal axes include the infrastructure sector—transportation and telecommunications— and the production support sector, which includes the Bolivian System of Innovation2 and the Productive Development Bank. The National Development Plan establishes that the strategic sectors should be controlled by the state, which in 2005, a year before the plan’s implementation, represented almost 10 percent of the gross domestic product (GDP) at market prices and almost 32 percent of tax revenue (see Figure 1). Because these sectors need high investment but also have a high potential for generating surplus, the document declares that the state should be “the protagonist in development through the creation or refounding of state companies that promote development in these sectors, maximize the economic surplus, and appropriate, use, and distribute the surplus through reinvestment and investments and transfers to other sectors that make up the productive matrix” (Ministerio de Planificación del Desarrollo, 2007: 131). Thus, this section of the plan depends on the opportunities that control of the surpluses from the strategic sectors gives the government to reshape the economy and generate employment and income.

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SOVEREIGNTY

Sovereignty for Bolivia means the capacity to act in the international arena according to its own directives and goals. This section of the National Development Plan characterizes previous Bolivian foreign policy as dependent, submissive to foreign paradigms and prescriptions, and incapable of providing the basis for real development. Therefore, the plan proposes revers- ing this pattern by building an international policy organized around valuing Bolivian culture and national identity, increasing the country’s international geopolitical presence, and seeking strategic partnerships that allow increased use and industrialization of its natural resources.

FROM TEXT TO ACTION: IMPLEMENTATION

In attempting to study the implementation of the National Development Plan, we have faced difficulty in finding reliable and systematic data, and in that respect the plan has failed, at least partially, to meet its goal of making government actions transparent to the public. The web site of the Instituto Nacional de Estadística (National Institute of Statistics—INE) is extremely confusing and hard to use; in addition, some statistics and fundamental information are scattered among other organizations such as the Central Bank and government ministries. Information about progress in some areas of the plan, such as justice and social protection, could only be obtained indirectly because of missing information and a high level of disorganization in data presenta- tion. For this reason, in many instances the information we provide about the economic aspects of the plan appears much clearer than the results found for the social and noneconomic sectors. Other important data sources were the Bolivian and international media and the data bank of the Observatório Político Sul-Americano (n.d.). With the reservation noted above, the most salient characteristic of the implementation of the plan is the change in the economic model in terms of state participation in the strategic sectors of the economy. Some 20 years after the beginning of the privatizations that took place during the redemocratiza- tion process in the 1980s, the Bolivian state has recovered operational control over the hydrocarbons sector, mining, and telecommunications, although these sectors have not been totally nationalized.

HYDROCARBONS

Certainly, although the regulations and property ownership in this sector have changed significantly, private national and international capital remains present, and the government continues to seek direct foreign investment, on which it is still relatively dependent, especially in hydrocarbons and mining, where all the principal ongoing projects are in partnership with foreign companies (Table 2). The government initiated restoration of the state role in the hydrocarbons sector in May 2006 when it decreed that the state company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) should take over operational control of the entire chain of gas and oil production. This is the most

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TABLE 2 Distribution of Investments in Hydrocarbon and Mining Sectors (US$ millions)

2006 2007 2008

Hydrocarbons Government 59.6 60.9 42.3a Direct foreign investment 58.1 162.7 376.5 Mining Government 24.9 73.4 140.9 Direct foreign investment 340.1 319.7 477.8

Sources: Ministerio de Planificación del Desarrollo and INE, quoted in La Prensa, April 22, 2009. a. Data on budget execution for 2008 are available only up to the third trimester. Although the rest of the data on foreign investment refer to the entire year, it is likely that even using the final data a similar disproportion would be found.

TABLE 3 Hydrocarbons Tax Revenue (US$ millions, 2000–2008)

2000 2001 2002 2003 2004 2005 2006 2007 2008

Total 456 450 414 462 565 1,012 1,832 1,934 2,647 National Treasury’s 180 188 173 220 287 317 385 439 659 share and royalties YPFB’s share 0 0 0 0 0 0 282 196 297 Patents 9 8 8 7 6 5 6 4 6 Direct hydrocarbons 0 0 0 0 0 288 682 747 924 tax Other taxes 267 254 233 235 271 401 476 547 761 likely reason that 2006 was an exceptional year in which the government invested slightly more in hydrocarbons than foreign investors, as it was a rational decision for the latter to hold up investments until they learned the outcome of the promised nationalization of this sector. The process of negotiating the purchase of refineries and stock from various companies and issuing decrees regulating these purchases continued gradually until the beginning of 2009. With the exception of several companies already under complete state control,3 the remaining oil companies operate as mixed companies in partnership with YPFB. To a large extent, the process deepened the expansion of state participation in this sector that had begun after the approval of a new Hydrocarbons Law in 2005 in a referendum supported by the previous president Carlos Mesa. The increase in revenue from this sector as a result of the 2005 law and the nationalization of 2006 is apparent in Table 3.

MINING

In mining the process was more cautious. The state company COMIBOL was restructured through Law 3720 of July 31, 2007, restoring its legal autho- rization to explore and commercialize minerals directly or through partnership and shared-risk contracts. Fixed-term concessions were abolished and replaced by shared-risk contracts, a state reserve of unexplored territories was reestablished in the name of COMIBOL, and taxation was increased. With the

Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 186 LATIN AMERICAN PERSPECTIVES exception of the Vinto Metal Work Company and the Huanuni Mining Company, there were no nationalizations, and although the state’s power to intervene in the sector has increased considerably the main development projects in mining occurred in partnership with foreign companies: Corocoro (copper) with the South Korean state mining company Kores International, Mutún (iron/manganese) with the Indian company Jindal Steel, and Karachipampa (lead/silver) with the Canadian Atlas Precious Metals. A national registry for the minerals and metals trade has been created to license minerals exporters and prevent illegal exports, and a draft of a new mining code has been released for public discussion.

TELECOMMUNICATIONS

In May 2008, after a long and unsuccessful negotiation process with the controlling Italian Euro Telecom, the government decided to nationalize Bolivia’s main telecommunications provider, the private company ENTEL. As of July 2009, telecommunications coverage had increased by 14.98 percent and revenue by 176.4 million bolivianos (Presidencia de La República de Bolívia, 2009b: 63). Several smaller private companies and cooperatives continue to operate in competition with the nationalized ENTEL. In late 2009 an applica- tion was filed with the International Telecommunications Union for a geosta- tionary orbital slot for a satellite that will improve telecommunications services, especially in remote areas.

ENERGY

In energy there have been no nationalizations, and the sector continues to be dominated by private companies. In July 2008, however, the government ordered the restructuring of the state company ENDE, which up to that point had been barely more than a name, and began to reinvest in the generation and distribution of electric power for the first time since its subsidiaries were privatized in 1995. In September 2009 stock in those subsidiaries that was controlled by private pension funds was restored to ENDE. As a result, the government gained control over the stock of almost half of the electric power subsidiaries, and it is negotiating to acquire the majority of shares of these companies, as was done with gas. Through state expansion of electrical capacity, access to electricity in rural areas increased from 33 percent to 47 percent (Presidencia de La República de Bolívia, 2009a: 41).

OTHER ECONOMIC SECTORS

The increased participation of the state in the economy is also apparent in the creation of new state companies in the sugar, milk products, paper, pack- aging, cement, and aviation sectors. Of these sectors, only the airline Boliviana de Aviación is in full operation. To promote agricultural development, the government created the Empresa de Apoyo a la Producción de Alimentos (Enterprise for the Support of Food Production—EMAPA) to promote agricultural research and development and financed agricultural projects through a restructured Productive Development Bank, and both are now in operation.

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In addition, to mechanize agricultural production, the state distributed 1,068 tractors between 2006 and 2008. In August 2008 control of toll roads was restored to the state company Vías Bolivia after the termination of private concessions. Other noteworthy advances in the transportation sector include the start of construction, financed by an economic-cooperation agreement with Brazil and Venezuela, on the Northern Corridor, a highway that will con- nect the isolated Amazonian departments of Beni and Pando with the rest of the country through La Paz. Highway construction in general has increased from an average of 113 kilometers per year in the 40 years before Morales’s election to 276 kilometers per year during the first three years of his administration, with a projected annual average of 487 kilometers for the next eight years (Presidencia de La República de Bolívia, 2009b: 76). Many of these changes in direct state control of sectors of the national economy were institutionalized through ratification of the new constitution in January 2009, which establishes national ownership of natural resources and places them under the administration of the state through public or mixed enterprises. Aside from the state control of the basic sectors of the economy, other governmental programs of economic restructuring and industrialization were less successful and created problems within the government’s own support base, such as the attempt to prohibit importation of used clothing and support for productive retraining of the ropavejeros (as the importers are known). At the end of 2008 the government announced that this program had failed and would be restructured. So far there has been no announcement of a replace- ment program, however, and the importation of used clothing, which was to be prohibited as of April 2009, continues as usual, provoking strong protest from the Bolivian textile industry. Similarly, the promised industrialization of coca has not taken place, although the inauguration of the first factory in this sector is scheduled for 2010. The difficulties the government faces in opening a market for possible products based on coca leaves—arising from the international penalties on coca due to its classification as a prohibited substance by the UN International Narcotics Control Board in 1961—discourage large investments in this sector (see Farthing and Kohl, this issue). The Bolivian System of Innovation, intended to stimulate and coordinate research to improve Bolivian competitiveness, has not gone beyond the planning stage.

ACCOMPLISHMENTS IN THE NONECONOMIC AREAS OF THE PLAN

BOLIVIA’S INTERNATIONAL ROLE

The government has achieved interesting results in diplomacy related to the coca leaf, with the United Nations Economic and Social Council (UNESCO) initiating the international decriminalization of chewing coca. Even though this is a lengthy process and there are no guarantees that it will not fail because of a veto by another country, it is the necessary first step in winning this important Bolivian demand. In addition, it is worth noting that at the recent climate change conference in Copenhagen, President Morales played a

Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 188 LATIN AMERICAN PERSPECTIVES leading role and won praise from international leaders representing a range of political viewpoints. In another demonstration of its changing international role, Bolivia’s strong affirmation of its sovereignty placed the country in conflict with U.S. agencies, resulting in the expulsion of U.S. Agency for International Development and Drug Enforcement Administration for alleged interference in Bolivian domestic politics and in the loss of benefits received through the Andean Trade Promotion and Drug Eradication Act. At the same time, the government has given full support to initiatives for Latin American integration, joined the Venezuelan-sponsored Bolivarian Alternative for the Americas, and become the first South American country to ratify the treaty establishing the Union of South American Nations.

AGRARIAN REFORM

In the agricultural sector, the government approved a new agrarian reform law in November 2006 (see Valdivia, this issue) allowing for the expropria- tion of land for failure to fulfill its socioeconomic function, legally designating land for public use, and favoring the communal distribution of land over distribution to individuals. In addition, the government has resumed the process of regularizing rural land titles and conducting inspections to determine which properties are not fulfilling their socioeconomic function, making them subject to redistribution. Additionally, the new constitution established a maximum size of 5,000 hectares for rural properties, although this limit applies only to land registered since it took effect. According to government data, between 1996 and 2005 titles were awarded or regularized for 9.3 million hectares, while between 2006 and 2009 the current administration has awarded or regularized titles to more than 23.46 million hectares, benefiting approximately 100,000 individuals (Presidencia de La República de Bolívia, 2009b: 65).

EDUCATION

Of all of the National Development Plan’s noneconomic areas, the most notable achievement has been in education, with the eradication of illiteracy. Certified by UNESCO in December 2008 at an official ceremony in the city of Cochabamba, this represented a reduction from an illiteracy rate that UNESCO had estimated at 11.7 percent for the population 15 years old and over in 2005. As a follow-up to the successful literacy program, in February 2009 the government initiated a basic education program that was projected to last two years and to benefit about 800,000 individuals and had already reached 53,000 by July 2009. Other educational goals achieved included increasing the salaries of schoolteachers as much as 14 percent by the end of 2009 and the construction of almost 15,000 elementary schools. In higher education, three indigenous universities were created, located in the cities of Warisata in the department of La Paz, Chapare in Cochabamba, and Kuruyuki in Santa Cruz. These universities emphasize the preservation of indigenous culture and languages and embody the cultural paradigm of the Morales administration, which makes original cultures and peoples the state’s top priority (see Howard, 2010).

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Efforts to update educational technology have been less successful than those involving cultural diversity; of 1,000 educational tele-centers projected for operation by 2010, only 142 had been created by the end of 2009.

HEALTH CARE

To fulfill the National Development Plan’s objective of democratizing health care, the government extended health care insurance to include youth between 18 and 25 years old and opened 545 health care centers, doubling the number existing in 2005. In addition, the successful Operación Milagro (Operation Miracle) provided free eye surgery that by the end of 2009 had benefited more than 441,000 individuals. Implemented with Cuban aid, this program also met the plan’s goals for international solidarity and cooperation. The administration also distributed over 1,000 new ambulances between 2006 and 2009 and served all of the cities prioritized in the Desnutrición Cero (Zero Malnutrition) program (Presidencia de La República de Bolívia, 2009b: 97–99). Despite a goal of bringing potable water to almost 2 million people by the end of 2010, only 900,000 had benefited from this program through the end of 2009. Similarly, of over 2 million intended to receive sanitation services, just under 500,000 had received them by the end of this year (Presidencia de La República de Bolívia, 2009a: 38).

HOUSING

The Morales administration had delivered 28,858 houses by 2009, double the number delivered in the preceding 15 years, and 33,622 more are projected to be delivered by the end of 2010. It is important to keep in mind, however, that these numbers are very small compared with the housing deficit in Bolivia, which amounts to more than 850,000 units that fail to meet minimum standards of quality.

REVENUE REDISTRIBUTION

It is unquestionable that the Morales administration has improved the quality of life and reduced inequalities in Bolivia. Programs such as the renta dignidad (dignity pension), which provides a monthly noncontributory pension to more than 687,000 senior citizens, using revenue from the nationalization of hydrocarbons, and the Juancito Pinto stipend, which reduced elementary school dropouts from 5.3 percent in 2006 to 2.5 percent in 2009 (Presidencia de La República de Bolívia, 2009b: 89), are clear examples of the positive results of revenue redistribution, even though on a smaller scale from what was ini- tially projected by the government and much less than needed in a country as poor as Bolivia. Other data also show progress in reducing poverty and inequality: between 2006 and 2008 the government generated 414,000 new jobs, 81 percent more than in 2003–2005, and increased the minimum wage by 47 percent from 2006 to 2009. All of these improvements succeeded in reducing the rate of extreme poverty from 37 percent in 2007 to 31 percent in 2008 (Presidencia de La República de Bolívia, 2009a: 48), although this remains an unacceptably high level.

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DEMOCRACY AND PLURICULTURALISM

In addition to the undeniable advances in education, the other most significant noneconomic achievement of this administration was the adop- tion in January 2009 of a new constitution that defines Bolivia as a plurinational state and recognizes collective forms of political representation (see Albro, 2010) and mechanisms of direct democracy such as the possibility of proposing or rejecting laws and constitutional amendments, exer- cising oversight of government agencies, and recalling elected officials. Plurinational democracy was advanced by a constitutional requirement that public officials speak at least one indigenous language (see Pérez, Cunha, and Coelho, 2009, for a detailed list of these mechanisms for expanding democracy). Another democratizing initiative was the creation of the Vice Ministry for Transparency and Combatting Corruption within the Ministry of Justice, one of Morales’s first executive actions. In 2009 this body was elevated to ministry status. Although some officials have been removed for corruption, anticorrup- tion legislation is at a standstill in the Senate. The inclusion of collective forms of representation within the plurinational framework4 is particularly important in the Bolivian context, because, as has been recognized since the work of René Zavaleta (1986), Bolivia is noteworthy for its abigarrada5 (heterogeneous) social formation—one in which many soci- eties and civilizations with distinct socioeconomic characteristics coexist in juxtaposition and none of them can impose hegemony over the others. Instead of a central nucleus expanding its sovereignty until it covers the entire national territory, the Bolivian state originated from the unequal and com- bined expansion of various nuclei that sometimes overlap, resulting in what George Gray Molina (2008) calls its “uneven reach” and its constant suscepti- bility to challenges to its legitimacy. The new constitution therefore recognizes the institutional pluralism that has existed de facto but has been denied in law and establishes previously missing mechanisms of regulation and coordina- tion that open up the possibility that the institutions of the plurinational state will function less convulsively. The constitution is also an advance in including regional autonomy and decentralizing administration by distributing responsibilities and authority among the national government, the departments, the provinces, the regions, and the indigenous territories. A new Ministry of Autonomy has been created, along with a national council on autonomy to discuss proposals for the new laws and regulations that the implementation of autonomy will require. Passing the enabling legislation will be the responsibility of the new congress that took office in January 2010. The financing of the subnational levels of government remains relatively undefined. The administration has promised to replace the current model, based on rents from mineral and hydrocarbon extraction, but has not yet offered a concrete proposal for an alternative. The National Development Plan recognizes that the problem with the current model is that these natural resources are heavily concentrated in a small number of Bolivia’s nine departments and this irregular and unequal distribution is a source of conflict (see Bebbington and Bebbington, this issue).

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CONCLUSION Analysis of the National Development Plan reveals bold objectives, for example, transforming the national structure of development and making the country the energy center of the continent, along with relatively modest goals in terms of reducing poverty and social inequality. The degree of success in achieving the proposed objectives also varies significantly. The greatest advances in the first four years of the Morales administration occurred in regaining state control of the economy, although none of the sectors mentioned in the plan have been completely nationalized, foreign investment continues to be the driving force in the strategic sectors of mining and hydrocarbons, and only tentative steps have been taken regarding the reinvestment of profits from state companies in the industrial processing of raw materials (see Rivera and Arispe, 2008, and Seoane, 2008: 73, on the problems of rein- vesting profits). However, overall, we can certainly assert that Bolivia has effectively changed its economic model from a predominantly free-market one to a mixed model in which state management of the basic sectors of the economy predominates. As we have seen, Gray Molina (2006; 2007) reminds us that Bolivia’s economic history in the twentieth century was characterized by alternating free- market and state-led economic models, none of which changed the structure of development, which remained dependent on the export of one or a few primary products. Gray Molina emphasizes that it is essential to change the underlying structure—the “what”—of the economy and not merely the “how.” Thus, although he recognizes that the current administration needs to regain control over the economy’s basic sectors, replacing the neoliberal model with a state-led one, he emphasizes that this will be insufficient if it is not followed by diversification beyond the traditional sectors of gas and mining, effectively changing the economic structure from its current narrow base, with 65 percent of national revenue being generated by a small sector that employs only 7 percent of the workforce. Structural change to create a broad- based, diversified economy should be the government’s primary economic objective. In fact, the National Development Plan specifically calls for changes in the structure of development (see Ministerio de Planificación del Desarrollo, 2007: 31), and many proposals by Bolivian development economists such as Gray Molina (2007; 2008) and Fernanda Wanderley (2008) for creating a broad- based economy are included in the plan. Both writers point out that Bolivia has the potential for specialization in desirable niches in the global market for relatively high-value exports such as organic and Fair Trade products, in which Bolivian cultural and environmental diversity would contribute to value added, meeting the plan’s objective for creating a “Bolivia trademark” (marca Bolivia) based on social and environmental protection (see Ministerio de Planificación del Desarrollo, 2007: 30, 135, 199, 251). The problem is that despite the prominence of this kind of diversification in the plan, in its implementation it has played a secondary role to changes in the economic model. However, the government is pursuing the “noneconomic” actions necessary to promote this diversification, such as environmental protection, guaranteed workers’ rights, and improved access to credit.

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Within Bolivia’s two traditional economic sectors, the goal of national industrialization has advanced farther in mining than in hydrocarbons. The shared-risk mega-projects under construction, such as Corocoro, Mutún, and Karachipampa, are moving toward the goal of ultimately producing and exporting industrialized (electrolytic copper, steel, silver and lead alloys) rather than raw minerals. By late 2009 the Corocoro complex had begun to produce copper cathodes. The Karachipampa project involves reopening a smelter that has been closed for 25 years. At Mutún the exploitation of iron ore began in 2009, and Jindal plans to invest US$2.1 billion there in the next few years to set up an integrated steel plant, a sponge iron plant, and an iron ore pellet plant. Despite this progress, it may be several years before these facilities are fully operational. Bolivia also possesses one of the world’s largest reserves of lithium, a strategic mineral that is used in the medical industry and in batteries and is one of the best alternatives for powering electric cars. The government is building a prototype plant with Bolivian technology under COMIBOL that should open for industrial-scale production in 2010 and will produce lithium bicar- bonate, the first industrial phase of this product, for export. The first experi- mental samples have been produced, and the government is negotiating with Korean, Japanese, and French companies interested in forming a partnership with the state company for the next phases of industrialization. The government anticipates building at least one lithium-battery factory, and sources at the Ministry of Mining are optimistic about the possibility of national production of electric cars operated by lithium batteries. In the hydrocarbons sector, there have been no advances beyond regaining state control. In fact, there has been great political instability in this sector, with the Ministry of Hydrocarbons now being headed by its fourth minister and YPFB by its sixth president (see Kaup, 2010). Important projects such as a gas-liquid separation plant planned for the city of Río Grande and the drilling of new oil wells with machinery donated through a partnership with the Venezuelan state oil company PDVSA have come to a halt because of a corruption scandal that sent Santos Ramirez, the president of the company and a founder of the MAS, to prison. The current president, Carlos Villegas, who is one of the main authors of National Development Plan, is working to restruc- ture of the company, but the outcome is yet to be determined. At the present time, YPFB suffers from a lack of qualified technical personnel, and, except for the suspended construction of the fuel separation plant, no important pet- rochemical complex projects for the industrialization of gas are under way. In September 2009 the government approved a US$1 billion loan from the Central Bank reserves to invest in industrializing through YPFB in 2010, but it remains to be seen whether the state company will be able to use these resources more efficiently than during the previous four years. At the same time, several projects to expand the domestic gas pipeline network are under construction, among them the Carrasco-Cochabamba gas pipeline, the first segment of which was completed in May 2009, and the extension of the altiplano pipeline. These expansion projects will allow a more efficient domestic use of gas for industrialization and energy generation, unmet needs that have been subordinated to gas exportation. In fact, government plans to diversify the domestic energy matrix and make better usage of

Downloaded from lap.sagepub.com at SMITH COLLEGE on February 17, 2016 Cunha Filho and Santaella Gonçalves / NATIONAL DEVELOPMENT PLAN 193 gas as fuel for transportation have not been implemented because Bolivia is still extremely dependent on diesel, mostly imported, and spends large amounts on fuel subsidies. The budget for 2009 projected an expenditure of more than US$509 million in subsidies (La Prensa, January 4, 2009). In the nontraditional sectors, the most significant changes are in agriculture, where the implementation of the agrarian reform law could have a positive impact on job creation and income, in addition to increasing food production, with possible positive effects both in supplying the domestic market and in generating surplus for export. The provisions of the law that prioritize collective over individual land distribution are especially promising because they discourage the establishment of nonviable minifundios (small plots) such as those generated by the agrarian reform that followed the 1952 Revolution. Furthermore, the new system is based on communal values and forms of organization that are still strong in Bolivia, such as the ayllus and the markas,6 that could improve the organization of production and even add value if their products entered the organic food and Fair Trade markets already mentioned. However, critics such as Enrique Ormachea (2008) emphasize that because it maintains the capitalist character of land exploitation linked to generating surplus for export, the MAS agrarian reform, which exempts land fulfilling a socioeconomic function, may not produce the expected positive results in the medium or long term. Although he points out that the government could make a good quantity of land available for immediate distribution, a significant por- tion of the large commercial landholdings, located in the East and occupying the best lands, will be excluded from the land reform process and, furthermore, the initial gains from reducing land concentration could be easily reversed by market forces. He emphasizes that even collective land distribution faces risks due to internal pressure in some communities from members who want individual titles (see Fabricant, this issue). It is too early to say whether the changes proposed and in progress will be able to put Bolivia well on its way to overcoming underdevelopment. On the one hand, some analysts argue that the strategies of the National Development Plan point in that direction (Gray Molina, 2006; 2007; Wanderley, 2008); on the other, there is strong criticism of the plan and its implementation for maintaining excessive dependence on gas and raw mineral exports until 2011 (Orellana, 2006: 31–32). In fact, the plan’s own projections of the results to be expected by its 2011 end date indicate continuing dependence, and, given the country’s existing institutional and economic weaknesses, it is plausible to imagine that this would have been the outcome even if the five-year plan had contained bolder projections. Moreover, a significant part of the underdevelopment trap resides precisely in the fact that the investments needed to change the economic structure require capital that underdeveloped countries can accumulate only through the export of primary products, and this makes it impossible to change the economic structure without to some extent reinforcing the existing structure that allows increased exports to accumulate capital. The crux of the problem is to determine exactly when and how much to reorient the lucrative export sectors toward changing the economic structure without smothering them and killing the goose that lays the golden egg. It is hard to imagine that Bolivia could make a significant economic leap forward without taking advantage of its great energy and mineral wealth.

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Moreover, the effects of the important domestic conflicts in the country during Morales’s first term cannot be ignored. The political situation in Bolivia is complex, and the opposition in the eastern part of the country has consistently attempted to destabilize the government (see Bebbington and Bebbington, Centellas, Gustafson, and Valdivia, this issue). In this climate of conflict, the government has made some concessions, such as changing the new constitution to prevent the 5,000-hectare limit on landownership from being made retroactive. The implementation of some of National Development Plan’s main points has been delayed or abandoned because of the correlation of political forces in the country, which is reflected in the extraparliamentary regional opposition and in the Senate, where the governing party was always the minority until the 2009 elections. In Morales’s second term, with a congressional majority, we can predict further advances, especially since much of the new constitution needs implementing legislation that will be the task of the new congress taking office in 2010. Given the National Development Plan’s limitations and moderation, as well as the problems in its implementation, it is important to emphasize that in the first four years of the Morales administration Bolivia has achieved an impressive increase in the rate of growth of the gross domestic product (from 4.80 percent in 2006 to 6.15 percent in 2008) linked with a decrease in income inequality. According to a study by Silvia Escóbar (2009: 56), in 2008 the income of the richest 20 percent was 14.5 times that of the poorest 20 percent, compared with 42 times in 2004, when the United Nations Development Program last measured inequality in Bolivia (El Deber, October 8, 2009). Transfer payments such as the Juancito Pinto stipend, the Juana Azurduy7 payments to pregnant women and mothers of infants who get medical checkups, and the renta dignidad8 may not be sufficient to overcome capitalism but are certainly needed in the context of the abject poverty of much of the country and have improved the standard of living and brought into fuller citizenship a significant segment of the population. Moreover, there is a clear change in the cultural paradigm that involves taking into account the original peoples of Bolivia, valuing indigenous cultures and the country’s cultural diversity, and that in itself represents a development model considerably different from the approach of previous governments. Much of the criticism from the left (see, for example, Orellana, 2006, and Ormachea, 2007) is focused on the inability of the plan to overcome capitalism, which is unquestionably true; however, up to the present, the existing theories of what would constitute a new type of socialism contain nothing revolutionary. In fact, there is no longer a recognized theory of transition to socialism that could serve as a basis for determining whether Bolivia is advancing toward twenty-first-century socialism. Although the economist Claudio Katz (2007) and others assert that there is a fundamental antagonism between twenty-first-century socialism and mere neo-developmentalism, they do not identify a clear dividing line between them. Given the practical impossibility of overcoming capitalism in Bolivia today, perhaps we can take comfort from that fact that, with all its moderation, the MAS government has at least contributed to achieving modest goals such as attempting to “save the 22,000 infants who die needlessly of malnutrition every year” (Dunkerley, 2007: 166).

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NOTES

1. This grant to underprivileged students in public K–12 schools amounts to about 200 bolivianos per child and has already reached more than 1 million students. 2. This is a program of the Vice Ministry of Science and Technology that promotes, coordinates, and channels funds to basic and applied public, private-sector, and university-based research. 3. These are the Companía Logística de Hidrocarburos de Bolivia, a fuel storage and pipeline company, Transredes, a gas pipeline company, Chaco S.A., which is active in hydrocarbon explo- ration and development in four Bolivian departments, and Air BP, which sells aviation fuel. 4. The constitution allows the establishment of autonomous indigenous cities ruled according to traditional customs. 5. No exact English translation conveys the rather poetic sense of diversity expressed by this concept. 6. The ayllu is an indigenous communitarian form of social organization based on collective landownership and mutual obligations. Markas are groups of ayllus. 7. To encourage prenatal care for women and regular checkups for children up to the age of two years, women are paid for every medical appointment they attend. Payments vary by type of checkup and can total 1,800 bolivianos (approximately US$225) over 33 months. 8. Replacing the previous pension Bonosol, this lowered the age of eligibility from 65 to 60 (therefore covering an additional 187,000 senior citizens) and increased the payment from 1,800 to 2,400 bolivianos (approximately US$300).

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