Blocking the ‘Washington Consensus’: New Book Reveals How Bolivia Rolled Back Neoliberalism

Blocking the ‘Washington Consensus’: New Book Reveals How Bolivia Rolled Back Neoliberalism
By Jaisal Noor


Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization
Edited By Jim Shultz and Melissa Crane Draper
University of California Press, 2009

Ten years ago, it would have been unthinkable that in 2009 Bolivia would approve a constitution rejecting neoliberal policies and recognizing indigenous rights. Drawing on a decade of advocacy, research and reporting from Bolivia, the Democracy Center looks for lessons from the struggle in Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization. Editors Jim Shultz and Melissa Crane Draper weave together eyewitness accounts and interviews framed by insightful analysis.

The book presents a range of perspectives within the globalization debate, from Bolivian officials on the payroll of the U.S.-based Inter-American Development Bank, to Doña Porfira, one of the countless Bolivians whose livelihood was washed away during the massive Enron and Shell oil spill of 2000. The book documents the enormous gap between the reality on the ground and the theoretical benefits of policies dictated by the “Washington Consensus,” under which funds are loaned to developing nations on the condition they privatize state industries and cut public spending.

Bolivia has the greatest number of indigenous people in South America and is among the continent’s poorest nations. This poverty can be traced back to the extraction of vast amounts of silver from “Cerro Rico” by the Spanish, which financed its empire for the next two centuries, but left Bolivia deeply impoverished. Chronic poverty translated into chronic political instability and dependence on foreign aid. Starting in the 1980s, the economic policies of the “Washington Consensus” were leveraged upon Bolivia in return for desperately needed financial aid. This succeeded in enriching the elite few, while the vast majority suffered.

Recently, Bolivians have had increasing success rejecting these policies. During the Water Revolt of 2000, Bechtel took control of Cochabamba’s water supply and distribution and jacked up the price. In response, residents organized,took to the streets and drove Bechtel out of the city. Shultz was awarded for his reporting in Cochabama by Project Censored. Ever since, Bolivia has found itself at the forefront of opposition to neoliberalism, and the Democracy Center has been on the ground to report on events and to organize campaigns in solidarity.

When Bechtel sued Bolivia for $50 million dollars for the loss of the water contract in 2004, international solidarity movements pressured the company to settle for a five-cent symbolic payment. Bolivian social movements and indigenous groups have also had increasing success, for the first time propelling one of their own, Evo Morales, to the presidency in 2005. With this victory Bolivians firmly rejected the neoliberal policies that perpetuate poverty. The editors point out that while Morales has begun directing profits from the sale of Bolivia’s natural resources towards the indigenous majority, an abundance of resources alone is not enough to guarantee wealth. Bolivia’s challenge is to create a sustainable model of resource extraction and growth.

Bolivia held a constitutional referendum January 25. The referendum was hotly contested, and the version put to ballots was considered watered down by many of the nation’s indigenous groups who had pushed for stronger language addressing land distribution. The referendum passed easily, and included provisions for political reforms, land reform, the advancement social programs and indigenous rights and will make changes to the country’s oil and gas laws.

On January 23rd, I spoke with Jim Shultz, executive director of the Democracy Center, which is located in Cochabamba, Bolivia. He is also the co-editor, along Melissa Crane Draper of the book “Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization” published last month. An excerpt of our conversation follows.

Jaisal Noor: The release of your book coincides with two historic events. You have the inauguration of the first African-American president in the US, and you have the vote on the constitutional referendum on Sunday January 25 in Bolivia, which is expected to pass. Could you describe the mood right now towards the constitutional referendum, which is seen by many as a compromise compared to what was originally sought by the indigenous people of Bolivia?

Jim Shultz: After 11 years in Bolivia, I’ve seen quite a few elections and this is one of the stranger ones. Up until the very last few days, there’s been almost no visibility of campaigning on the streets. Not in the urban area here in Cochabamba where I work or the rural area of Tikiawa (?) where I live. Usually for almost a month before an election you see lots and lots of campaigning. On the other hand, the few times that I have snuck a peak at television here and there, it’s pretty obvious that the airwaves in Bolivia are just carpeted with ads. I mean, [practically]the only ads on the air are ‘yes’ or ‘no’ ads on the constitution. And some of them are completely over the top. You know, an image of Evo Morales and an image of Jesus - “Which side are you on? Vote ‘no’ on the constitution” is one of the ads that have been running.

The political interests that are promoting the yes or no vote have certainly invested resources on television to make their case. But I don’t see a lot of popular engagement in the vote. If you contrast that with, for example, the election in December 2005 in which Evo [Morales] was elected, my gosh — for weeks you couldn’t walk out of your door without being plastered with some sort of campaign activity. There were mass rallies in stadiums, there were caravans, there were people leaf-letting on corners for candidates — this has been almost absent in this vote.

Most Bolivians are just trying to deal with the day-to-day struggles of making ends meet in an economy that is in deep trouble, and trying to find some economic opportunity in a country where there isn’t much, dealing with the rises in the prices of food. I just think that [this vote] hasn’t really connected with people as something that has a real direct impact on their lives. And Bolivia’s problems that are really about how the government can have a strategy to generate economic opportunity in this country for the people who have been frozen out of economic opportunity.

Now certainly people without land who focus on land as the economic opportunity that they’re seeking have pinned their hopes on the new constitution. But land reform has been watered down so much in this new constitution that I’m not quite sure what difference it’s going to make. All of the big tracts of land that are currently out there that are “in production” are now exempt from land reform under this watered-down proposal. Certainly people’s hopes are that if Bolivia can get more control of its gas and oil resources and get involved in the sale of those and the marketing of those that those resources can be used to invest in infrastructure projects and education and those kinds of things to lift up people’s lives.

But again the problem is that, one, Bolivia has had a real hard time getting its state oil company up and running and efficient. Two, just as in Venezuela and elsewhere in the world, oil revenues are not going to be in the coming years what they were in the last few. So it’s not going to be the raining gold that people thought it was as oil prices and gas prices are reduced. And three, under any political party and ideology in this country Bolivian governments have a real hard time operating honestly and efficiently to deliver the goods. So it’s unclear how schools are going to suddenly get better. It’s unclear how a pretty decrepit public health system is going to suddenly get better. These issues of reclaiming natural resources and all of these things are extremely important and certainly that was the original intent of the constitutional process, but I sense more and more of a disconnect between the process of political change in the country and how people’s day to day lives are impacted.

Jaisal Noor: One of the core themes in Dignity and Defiance is the basic human desire for self-determination, which is something I fear many in the West, especially in the United States, take for granted. One of the watershed moments in Bolivia’s anti-globalization movement was the Cochabamba water revolt, which was a struggle against corporate globalization. Do you see any difference in a Clinton administration and a Bush administration, which were dominated by corporations, to an Obama administration, which is dominated by corporations? Do you think there is a hope that U.S.-Bolivian relations will change? They have been tense in the last several months of the Bush administration.

Jim Schultz: Your point is right about self-determination. The fundamental point about the Democracy Center is that democracy isn’t about elections and all by itself. Democracy is the right of every person on this planet to understand and influence the public decisions that shape their lives. What the book documents is how organizations like the IMF and the World Bank - which are controlled by the United States government structurally - undermine that principle of democracy and took away from the people some basic decisions about who controls their water, who controls their gas, and oil, how money should be raised and spent in their national budget. Bolivia was the lab rat for 20 years of the Washington Consensus or the neoliberal model, exported to poor countries under pressure from the World Bank and the I.M.F., and the lab rat rebelled. And that’s what’s so profound. Not just the [Cochabama water war of 2000] but other struggles after are David and Goliath- quite literally David versus Goliath with a sling and that’s all people had here as well.

The lesson from that is that people do want to make these decisions for themselves. And the question of whether or not the United States will be a force on the side of democracy in this regard or against it under new administration, that’s the right question to ask. It’s not about the politicians who sit in the chair. There’s no question that we have a right to be more hopeful that Obama’s sitting in the chair than George Bush or even Bill Clinton, but it’s not about what the politicians do. The politicians will ultimately stick their fingers in the wind and try to figure out which way the wind is going. That’s what they do. The issue is now how do we connect the people in the United States with the people in Latin America to influence the government of the United states and the governments of Latin America to make policy that’s based on what the people need and what the people are demanding.

Let me give you an example. You talked about the decline in the relationship between the Bush administration and the Morales administration which was stunning, I mean, they kicked each others ambassadors out and all of that. Well one of the things that the Bush administration did to retaliate against Bolivia was basically try to nuke 20,000 Bolivian jobs by taking Bolivia out of this Andean Trade Preferences program. And we have a project; we call it voices from Latin America, which is very simple. We use old fashioned organizing and new technology to bring people’s voices into the debates that affect their lives. And so, a team of young people from the democracy center, Bolivian and U.S., fanned out by jeep and bus around the country and interviewed the people who were going to lose their jobs. Put together a five minute video within a week, put it up on YouTube, tied it to an electronic petition and then we hammered on the Bush Administration until they agreed to actually let that video and that testimony be aired at the Washington hearing that the law required that the administration hold on Bush’s plan. And so, these people’s voices were actually right there in that room in Washington, heard. And I think doing that kind of thing is the way we educate people in the United States about what’s happening, it’s the way we educate and pressure politicians in the United States to take the different view of the way they’re handling countries like Bolivia and regions like Latin America. At the end of the day, What Bolivia teaches us is that change happens not because politicians led the way, but because people led the way. And ultimately change will happen in the United States because people lead the way. And ultimately change will happen in the way globalization works on this planet based on whether people link up across national lines and come up with new strategies to challenge globalization to be something that can serve the interest of people in stead of take away their democratic decisions and take away their natural resources, and make them essentially tools of what the world should look like.

Jaisal Noor: As much as your book deals with the successes of the anti-corporate globalization movement, it doesn’t gloss over its shortcomings. Could you share some of your insights on the future of the struggle in Bolivia?

Jim Schultz: It’s a sad fact that nine years after the Water Revolt, which was a global inspiration, the public water company’s situation here in Cochabamba is still miserable — it’s still inefficient, it’s still corrupt, it’s still not doing the job. Part of the lesson here is if we don’t follow up these great victories in the street with nutsand- bolts work of creating the alternative that actually delivers the goods, then the victory ends up being hollow. And sooner or later, if public control of these resources doesn’t work, the people in places like Bolivia are going to begin to turn around and say, “Gosh, we really should have corporations doing this.” So as a movement for social justice we have to pay much more careful attention to building these public systems that can deliver the goods.

That privatization of water is certainly no panacea, and in places such as Cochabamba, it is certainly not the answer. And this gap between the theory and reality is something that is extremely important. The flip-side of that, and this is something we document in the book as well, is the gap between the romance of kicking the corporations out and the hard work involved in actually making things work. Look at it- its a sad fact that nine years after the Water Revolt, which was a global inspiration, the public water company here in Cochabamba is still miserable, its still inefficient, its still corrupt, its still not doing the job. And you know the Democracy Center as an organization, we sort of straddle the line that not many organizations do. One hand, we’re very integrated and very involved in social justice movements that involve protest and direct action, and all of those things.

Jaisal Noor: What do you think the future holds for US-Latin American relations?

Jim Schultz: Oddly enough, the one upside to the “global war on terror” is that the Bush Administration didn’t pay any attention to Latin America while an important pendulum swung with the election of a whole class of left-of-center national governments. They range in ideology and policy quite a bit, and governing style, but from Lula in Brazil, to Chavez in Venezuela, to Morales here in Bolivia, Correa in Ecuador - the list is quite long. Uruguay, Paraguay, Argentina, South America is in very different political space the last time the United States tried to bully people around. And they are a very united force. After the violence in Bolivia in September and October [2008], the South American presidents not the United States intervened.

The way we make sure a difference happens is by linking citizens with citizens, people with people in the United States and Latin America. Diplomatic relationships between the United States and its neighbors ought to be determined by the people of the United States and those neighbors as opposed to just diplomatic experts. That’s really new, we’re very accustomed to having lots and lots of citizen engagement and activism in protest and advocacy on domestic issues, not so much on foreign policy issues. If there’s a war, people will come out on the streets. But this idea of saying “You know what? Diplomatic relationships between the United States and its neighbors ought to be determined by the people of the United States and those neighbors as opposed to just diplomatic experts”. That’s what we are trying to build and that’s what I think we’re going to see in the next 10 years. That’s what we are trying to build and that’s what I think we’re going to see in the next 10 years.

For more information about the tour, visit the Dignity and Defiance website:
democracyctr.org/publications/dignitydefiance/