BOLIVIA AT THE CROSSROADS: THE DECEMBER ELECTIONS Latin America Report N°15 – 8 December 2005 TABLE OF CONTENTS EXECUTIVE SUMMARY AND RECOMMENDATIONS................................................. i I. INTRODUCTION .......................................................................................................... 1 II. ORIGINS OF THE CRISIS........................................................................................... 2 A. THE NATION AND THE STATE................................................................................................2 B. THE ECONOMY AND POVERTY ..............................................................................................4 C. DEMOCRACY AND SOCIAL MOVEMENTS ...............................................................................5 III. THE DECEMBER 2005 ELECTIONS ........................................................................ 8 A. THE FALL OF PRESIDENT MESA ............................................................................................8 B. THE RODRÍGUEZ GOVERNMENT AND THE ELECTORAL PATH...............................................10 C. CONTENDERS AND ELECTION SCENARIOS ...........................................................................12 1. MAS.........................................................................................................................14 2. PODEMOS ..............................................................................................................15 3. UN............................................................................................................................16 IV. THE CONSTITUENT ASSEMBLY, REGIONAL AUTONOMY AND NATURAL GAS ................................................................................................................................ 18 V. INTERNATIONAL RELATIONS.............................................................................. 21 VI. CONCLUSION ............................................................................................................. 24 APPENDICES A. MAP OF BOLIVIA.................................................................................................................25 B. ABOUT THE INTERNATIONAL CRISIS GROUP .......................................................................26 C. CRISIS GROUP REPORTS AND BRIEFINGS ON LATIN AMERICA/CARIBBEAN .........................27 D. CRISIS GROUP BOARD OF TRUSTEES ...................................................................................28 Latin America Report N°15 8 December 2005 BOLIVIA AT THE CROSSROADS: THE DECEMBER ELECTIONS EXECUTIVE SUMMARY AND RECOMMENDATIONS Bolivia is on the verge of national and social disintegration. The next government will have to deal with strong Its elections on 18 December 2005 – for a president, centrifugal forces challenging the unity of the nation- Congress and department prefects – may be a final state, powered by autonomy claims from not only Santa opportunity to start solving deep social and economic Cruz but also the southern department of Tarija and problems and profound ethnic divisions. The international radical indigenous and trade union groups in the western community – especially the U.S. and key left-leaning highlands. There are fundamental policy issues of governments in the region like Brazil – will need to show hydrocarbon resource management, poverty reduction, restraint, offer reasonable support and focus on areas equitable distribution of social and economic power, rural of common interest. This is particularly so if the new development and the building of a stronger and more government is led by the mercurial indigenous champion, inclusive state. All sides need to be willing to compromise Evo Morales, who may otherwise be tempted to join on a policy consensus over a five-year period and beyond. forces with Venezuela’s populist president, Hugo Chávez, in a dangerous confrontation with the U.S. There is widespread expectation that the new government and Congress will prepare a constituent assembly to After the ousting of President Gonazalo Sanchez de draft a new constitution and a referendum on regional Lozada in October 2003 and the forced resignation of autonomy, both to occur in mid-2006. These two measures, his successor, Carlos Mesa, in June 2005, the country if based on a negotiated consensus, could form the is under enormous pressure. Interim President Eduardo foundation for the country to move toward democratic Rodríguez, the former head of the Supreme Court, was stability and socio-economic progress. Without that initially able to steer away from the abyss that loomed consensus, they could tear it apart. when he took office. The honeymoon calm was broken, however, by a bitter fight over reallocation of The international community should provide effective congressional seats provoked by the relatively prosperous, election monitoring through the Organization of American business-oriented eastern department of Santa Cruz as States (OAS) and announce it will cooperate constructively part of the long-standing struggle with poorer, more with the new government, regardless of who leads it. U.S. statist-inclined and indigenous power centres in the western unease over Morales remains strong, as he has spoken highlands and valleys that threatens to tear the country most harshly against the coca eradication aspect of its anti- apart. narcotic drugs policy (proposing lifting all constraints on coca leaf production) and is close to Chávez. Washington The latest surveys give Morales, the leader of the coca remembers the counter-productive effect when its growers (cocaleros) in the Chapare region, and his ambassador spoke out against Morales in the 2002 election, Movement Toward Socialism (MAS) party a narrow lead however, and has wisely avoided taking sides in the over their main rival, former President Jorge Quiroga and campaign. If Morales wins, it will need to move with care his Democratic and Social Power (PODEMOS) citizen to avoid pushing him further into Chávez’s embrace. association. Neither candidate is likely to win an absolute majority, which means the election would be decided The transnational oil companies also can play an by the new Congress, a prospect that favours the more important role in helping Bolivia achieve stability and traditionalist and conservative Quiroga even if he socio-economic development by agreeing to negotiate polls fewer popular votes. If Morales becomes the new contracts with the government and paying higher next president, he will be under strong pressure from taxes and royalties on natural gas production. substantial sectors of the social movements to adopt radical policies, especially regarding nationalisation of the hydrocarbon industry and relations with the international financial institutions. Both scenarios almost certainly guarantee social upset and quite possibly violence. Bolivia at the Crossroads: The December Elections Crisis Group Latin America Report N°15, 8 December 2005 Page ii RECOMMENDATIONS specific goals of the constituent assembly and the referendum on regional autonomy. To the Government of Bolivia: To the Bolivian Congress: 1. Continue to take all necessary measures to hold the elections for president, Congress and department 10. In the interest of political stability, if no candidate prefects on 18 December 2005, including ensuring wins an absolute majority in the popular vote on 18 that parties have equal access to media and that December, elect as president the one who received polling stations are run efficiently. the most votes. To the Political Parties and Citizen Associations: To the U.S. Government: 2. Limit personal attacks in the campaign and 11. Send a clear message through diplomatic channels concentrate on the core policy issues, particularly that it will not question the legitimacy of the new hydrocarbon management, job creation and government and that its priority will be to find poverty reduction, that the next government will common ground for tackling Bolivia’s deep-seated need to implement. problems in a constructive manner. 3. Keep hardliners in the western highlands and To the Governments of Venezuela and Brazil: eastern lowlands in check by campaigning on the basis that the unity of the Bolivian nation-state is 12. Provide clear public messages of readiness to not negotiable and that the results of the elections support the next government in implementing will be fully respected. its reforms. 4. Reach out to women voters and women party and 13. Dispatch small observer missions in coordination citizen association members, recognising their with the OAS to reinforce the legitimacy of the priorities and according them decision-making election results. responsibilities in appropriate positions. 5. Pursue hydrocarbon sector reforms by amendments To the OAS: to the new hydrocarbon law – which brings greater 14. Prepare and implement the election monitoring revenues to the state – while ensuring that such mission agreed with the Rodríguez administration amendments respect international legal norms with in good time and cover the entire country. regard to investments of private transnational oil companies and include competitive arrangements To the European Union, its Member States, the to encourage further investment and sector Inter-American Development Bank (IADB), the efficiency. World Bank, the IMF and the Andean Community: 6. Stop creating high expectations on the nationalisation of the hydrocarbon sector that could 15. Increase contributions