In a recent interview, after praising the government’s respect for human dignity, responsible development, and Mother Earth, Vergara Garinca was asked about the economy under Morales: “Bolivia has grown economically at a rate of approximately 4 percent [under Morales]; however, in spite of the fact that many say that this growth has brought big economic benefits for Tarija [a hydrocarbons-rich department in the eastern lowlands], these aren’t being felt by the people, because they have been concentrated in a few hands, and have never reached the general population.”
The streets of the city of Potosí, 600 kilometres southeast of the capital of La Paz, are desolate, distended with the uncollected garbage of 18 days of a general strike and popular revolt against poverty. Over 700 vehicles are trapped in road blockades at Villa del Carmen, Betanzos, Chaqui, Dan Diego and elsewhere, separating Bolivia’s poorest department (state) from its neighbouring territories, as well as from Argentina and Chile.
Stores are closed, and public and private institutions boarded up, along with schools, markets, and banks. Cash machines are out of money, food and fuel supplies are low, and inflation is lifting the prices of remaining basic commodities into the clouds. Only vehicles authorized by Potosí’s Civic Committee – the umbrella organization through which the protests have been organized – are permitted to navigate the streets, although some Potosinos, as residents of this city of 160,000 are known, make their way on bikes and motorcycles through the few internal streets that remain passable. The dynamite of miners is set off from time to time to remind people that this is a city in revolt, even if negotiations with the government – after six aborted efforts – have finally begun in the neutral city of Sucre.
The Poor Shut Things Down
The avenues and alley ways of Potosí are adorned with red and white – the colours of the department – and roughly 500 blue tent stations are scattered in different locales, providing shelter for possibly 1,000 people on hunger strike, including the governor, who is a member of the ruling party but has temporarily broken ranks under grassroots pressure.1 Two MAS congress persons also joined the hunger strike initially, but were then successfully pressured into abandoning that route by higher-ups in the party.
In recent days, over 100,000 people have taken to the streets in marches. Peasants from nearby Jatun Ayllu Yura (independent indigenous community) physically occupied the hydro-electrical station that supplies power to the biggest mine in the department, San Cristóbal, run by a Japanese multinational, and the site of major worker and peasant disputes earlier this year.2 San Cristóbal is losing $US 2 million per day in exports. $US 500 thousand is lost daily from the cooperative mining sector. Tourism is dead in Potosí, at the peak of its season (unless we count the few beleaguered backpackers still stuck in the area). “This is going to affect the entire Gross Domestic Product (GDP),” said Minister of Economy and Finance, Luis Arce, a prestigious expert in the inane and obvious. “We hope that the conflict will be resolved so that it will not have major economic impacts on the country.”3
The protests began on July 30 with a 48 hour general strike to drive home popular disaffection with the government’s failure to respond to a series of electoral commitments made to the destitute department. These agreements had first been outlined in a petition delivered by the Civic Committee to Morales back in 2009. The 48 hour strike was extended to an ongoing action with indefinite end when the government’s response was silence.4
The favoured government tactic has been to exhaust the strike through inattention, but this has seemed only to radicalize and broaden the base of support for Potosí’s militancy around six principal, immediate demands: (1) resolution of department borders between Potosí and Oruro, particularly around the mountain of Tahua, rich in the rock base used for cement production; (2) the immediate installation of a promised cement factory in the community of Coroma, to create jobs; (3) the reopening of a metal processing plant in Karachipampa; (4) the structural preservation of the over-mined Cerro Rico (the massive, historically and symbolically crucial mountain that towers over the city of Potosí); (5) the construction of an international airport in the department to attract tourism; and (6) the completion of promised highways.5
So we’re dealing with the poorest department in the country (where life expectancy is dramatically below the national average), which gave roughly 80% support to the MAS in the last elections, rising up in a protest against neoliberal continuity and the failure of basic responses to endemic poverty.
The class character of the protest is complex. Some of the leadership is clearly composed of cooperative miners. The richer layer of the cooperative miners is basically constituted by reactionary petty capitalists working together with transnationals in Potosí against the rights of state-employed miners.6 Also in the leadership are other sectors that might accept merely a clientelistic buy-out by the MAS to “solve” the situation.
But the rebellion has matured into something much, much larger. Eighteen days of general strike (total lockdown of the city) and a thoroughly impenetrable regime of coordinated road blocks are not easily carried out absent mass popular support. While ostensibly led by the Civic Committee of Potosí, in which the cooperative miners play a partially determining role, the sectors in revolt also include communities of indigenous peasants, various unions of the formal working class, the informal urban poor, organized sex workers, university students and professors, artists and intellectuals, and even the city’s soccer team.7
“The historical necessity of the region, to which no government has ever attended,” sociologist José Mirtenbaum suggests in a recent op-ed, “produces these types of just and legitimate demands, which speak to all citizens. The qualitative magnitude of the historical causes are too enormous to measure. It’s absolutely legitimate that a population takes to the streets to reclaim their natural resources and for other demands that have much to do with their symbols,” as a people.8
Neoliberal Mining and Uneven Capitalist Development
“In search of profit and driven to compete,” Marxist geographer Neil Smith reminds us, “capital concentrates and centralises not just in the pockets of some over the pockets of others but in the places of some over the places of others.”9 With the crash of tin prices in 1985 and the onset of 15 years of brutal neoliberal restructuring in Bolivia, capital increasingly vacated the impoverished department of Potosí – once the silver capital and slave graveyard of the Spanish Empire – and entered the new dynamic centre of Bolivian accumulation – the agro-industrial, hydrocarbon-rich, and narco-fuelled right-wing heartland of Santa Cruz.
However, with the onset of the commodities boom in 2002, and still today, even in the midst of the ever-mutating global crisis, transnational capital has found its way back to mineral-rich Potosí. Unfortunately, with the continuity of neoliberal mining policy under the government of Evo Morales, the bulk of the wealth generated by mineral exploitation continues to be repatriated to imperial countries outside of Bolivia, leaving only poverty, unemployment, regional underdevelopment, and environmental contamination in its wake.
This is the backdrop to the extraordinary and ongoing popular revolt against poverty we’ve witnessed in Potosí since it first broke out, 18 days ago, on July 30, 2010. Again, the crux of the situation is that the mining regime that prevails in Potosí, as elsewhere in the country, is fundamentally neoliberal, and that this is a MAS strategy, not a deviation from their plan, or a distortion by disgruntled state bureaucrats, leftover from old regimes.10
For example, a recent study of a Canadian subsidiary, Pan American Silver, operating in the department through a shared-risk contract with the state company COMIBOL (COMIBOL effectively controls about 30% of the project), shows that the company will pay merely 17% taxes and royalties on projected gross sales value over the next 30 years. The taxes going to the municipality where the company is located, one of the poorest in the country, are just over 0.5%. This is straightforward looting. By comparison, in various shared risk contracts in Chile (hardly a socialist haven) taxes and royalties going to all levels of the state amount to up to 51%, whereas, in Peru, it’s on the order of 26%.11
The hegemony exercised by transnational capital in the mining sector in Bolivia calls into question the viability of the Morales government’s commitment to “harmony” and “equity” between different forms of property (state, private, communitarian, and cooperative), or what it terms a “plural economy.” Vice-President Álvaro García Linera has theorized the independent development paths of different forms of property under the rubric of “Andean-Amazonian Capitalism,” but his theory resolutely fails to account for the overwhelming dominance and power of private property – under the control of transnational capital – in the underdeveloped capitalist socio-economy of Bolivia. In mining, the role of COMIBOL has been entirely marginalized and the power of transnational mining capital to loot continues unabated.12
Neoliberal continuities in Bolivia’s political economy under Morales are not restricted to mining, and this is increasingly evident to perceptive thinkers from across the political spectrum. “What has changed in these last few years,” asks Roberto Laserna, one of Bolivia’s most renowned neoliberal intellectuals. “A lot, if one observes the process in terms of its discourse and symbols and maintains a short-term perspective. But very little if one is attentive to structural conditions and observes the economic and social tendencies with a longer-term view.”13 I rarely agree with Laserna, but on this point he is precisely on target.
Most of Morales’ first four years can be described, from an economic perspective, as high growth and low spending. Prior to the fallout of the worldwide economic crisis, which really started to impact the Bolivian economy in late-2008 and early-2009, the country’s gross domestic product (GDP) had grown at an average of 4.8 percent under Morales. It peaked at 6.1 percent in 2008, and dropped to an estimated 3.5 percent in 2009, which was still the highest projected growth rate in the region. This growth was based principally on high international prices in hydrocarbons (especially natural gas) and various mining minerals common in Bolivia.
Government revenue increased dramatically because of changes to the hydrocarbons tax regime in 2006. But fiscal policy remained austere until the global crisis struck. Morales ran budget surpluses, tightly reigned in inflation, and accumulated massive international reserves by Bolivian standards. Public investment in infrastructure, particularly road building, increased significantly, but social spending rose only modestly in absolute terms, and actually declined as a percentage of GDP under Morales.
Fiscal policy changed in 2008 and 2009, as a consequence of a sharp stimulus package designed to prevent recession in the face of the global crisis. The social consequences of reconstituted neoliberalism—whatever the rhetoric of sympathisers on the international left—have been almost no change in poverty rates under Morales, and deep continuities in social inequality. Both of these axes persist as monumental obstacles standing in the way of social justice in the country.14
The realities of these dynamics do not escape even some hard-line supporters of the government, such as Ariel Vergara Garnica, Excecutive Secretary of the Federación Sindical Única de Trabajadores Campesinos de Tarija (Federation of Peasant Workers of Tarija, FSUTCT). In a recent interview, after praising the government’s respect for human dignity, responsible development, and Mother Earth, Vergara Garinca was asked about the economy under Morales: “Bolivia has grown economically at a rate of approximately 4 percent [under Morales]; however, in spite of the fact that many say that this growth has brought big economic benefits for Tarija [a hydrocarbons-rich department in the eastern lowlands], these aren’t being felt by the people, because they have been concentrated in a few hands, and have never reached the general population.”15
At the same time, this dynamic has been recognized recently by no less an establishment authority than the World Bank Director for the Andean Region, Felipe Jaramillo. In an exclusive interview with La Paz daily Página Siete this week Jaramillo did begin with a call for improvement in the Bolivian investment climate – an aural tick not easily cast aside after years spent as a PhD student in the economics department of Stanford, followed by a stint as Vice-Minister of Finance in Colombia, and then World Bank posts in Asia and Europe.
Grounding himself in the data, however, Jaramillo praised the macroeconomic management of Morales, particularly his government’s fiscal and monetary austerity, commitment to extremely low inflation, and unprecedented accumulation (by Bolivian standards) of international reserves.16 This assessment explains why, earlier in the week, the World Bank agreed to provide Bolivia with $US 150 million in concessional loans for various projects, loans which are of course subject to a series of neoliberal conditionalities with which the Morales government appears set to comply. The same is true of a $US 30 million loan from the Inter-American Development Bank agreed to simultaneously.17
The Rupture in Potosí and the Rising Discontent of the Popular Classes
Negotiations have now started with the government in Potosí, but it’s hard to exaggerate the significance of this break with the MAS, and the ways in which the government’s populism will be unable to contain the growing discontent from urban and rural popular classes.
For example, the factory workers of La Paz, who supported the MAS officially in the December 2009 elections, have now distanced themselves from the government. This was made clear in a series of strike actions in April and May 2010, alongside urban teachers, miners, and health care workers.18 The political-ideological orientation of the Federation of Factory Workers of Cochabamba, led by former shoe-factory worker Oscar Olivera, reflects an even deeper schism with Morales.
The powerful urban indigenous-proletarian organization, FEJUVE-El Alto (Federation of Neighborhood Councils of El Alto), for the first time in four years, has changed course. Following recent elections, the new leadership has a mandate to follow the latest set of resolutions, drafted at a Congress at which thousands of representatives from the impoverished neighbourhoods of El Alto had a voice. The new resolutions state explicitly that this government represents neoliberal continuity;19 three members of the new executive board come from a recently-established revolutionary federation of neighbourhood councils in the city.20
There will be major conflicts, possibly large-scale strikes, over the proposed pension law which is abysmal and which will affect the entire formally-employed working class. Further demonstrations are also likely to grow around the government’s new hard-line approach to cracking down on “contraband.” Whereas many on the left would be on board with measures against contraband mafias and narco-trafficking thugs, the reality in Bolivia is that the new measures are going to throw tens of thousands of informal workers out of work with no alternative means of employment.
Other prominent breaches between the government and popular organizations emerged this year. Particularly salient were those with the lowland indigenous organization, CIDOB, which the government accused of being a puppet of the United States Agency for International Development (USAID), and the coca growing peasants of the Yungas region of the department of La Paz, which split with the government after a dispute between peasants and the Morales administration over development projects in Caranavi.
These fractures between the popular classes and a government that continues to insist it represents them are very distinct phenomena from the rightwing destabilization campaigns in Sucre, Santa Cruz, and Tarija in the last few years, or the related peasant massacre in the community of Porvenir, carried out by functionaries of right-wing governor of the department of Pando on September 11, 2008. The government, in this context, was correct to assume a gladiatorial stance against imperial meddling. In the latest face-offs with popular groups, the fantasy that the discontent of the exploited and oppressed has simply been artificially engendered by Empire reflects an unsavoury attachment by elements of the Morales administration to the Stalinist witch hunts of the past.
While committed to the defence of the Morales administration against destabilization campaigns from the domestic right and various imperialist forces, these popular currents are also beginning to believe that the break with neoliberalism actually introduced in recent years has been exaggerated by the Morales administration. Rather than waiting for transformative change to come from on high in the form of state officials aligned with the MAS, the new struggles are reclaiming agency – an agency rooted in the struggles and capacities of the exploited and oppressed themselves, working independently from the MAS.
The ability of Morales to play the distant saviour, to reduce recurrent instability to mere manifestations of internal party problems, “bad-apple” ministers, disloyal bureaucrats, and social movements manipulated by nefarious CIA and NGO agents, is losing plausibility rapidly amongst the population. As much as he deigns to, Morales cannot stand above the class struggle and inherent contradictions in the capitalist development model to which his government has wedded itself.
At the moment, the Bolivian President is attending the Social Forum in Paraguay as a special guest, while several of his top Ministers are back at home in Sucre attempting to resolve the crisis in Potosí.21 It is likely that a short-term agreement will be hashed out and temporary stability restored. However, unless the Morales government takes the unlikely turn toward abandoning its bourgeois alliances and committing itself to the authentic anti-capitalist and indigenous-liberationist demands of the popular revolts of the 2000-2005 insurrectionary cycle, the Potosí uprising is likely just the beginning of things to come.
Jeffery R. Webber teaches politics at the University of Regina, Canada. Beginning in September, 2010 he will be a Lecturer in the School of Politics and International Relations at Queen Mary University of London. He is the author of Red October: Left-Indigenous Struggles in Modern Bolivia (2010), and From Rebellion to Reform in Bolivia: Class Struggle, Indigenous Liberation and the Politics of Evo Morales (2011). He is currently in La Paz, Bolivia.
 “La Villa Imperial está unida, movilizada y desabastecida,” La Razón, August 12, 2010; “El Gobernador de Potosí está en terapia intensiva,” La Razón, August 12, 2010; “Hay ministros que no están con el proceso de cambio,” La Razón, August 11, 2010; “Conflicto en Potosí es el más largo desde la caída de Goni,” Pagina Siete, August 14, 2010.
 Juan Carlos Véliz, “El diálogo naufraga y Potosí radicaliza sus movilizaciones,” Página Siete, August 11, 2010; “Minera San Cristóbal para labores con pérdidas día de $US 2 millones,” La Razón, August 12, 2010.
 “El conflicto afectará el crecimiento económico,” La Razón, August 14, 2010.
 Eugenio Paz, “Demandas históricas irresueltas,” Página Siete, August 14, 2010.
 Editorial, “Potosí sin salida,” Pulso, August 15, 2010.
 This layer, for example, often no longer engages in direct mining activities, but rather hires poor “cooperative” miners at super-exploitative wages. The rich layer of cooperative miners has even become known as the “nueva rosca,” or the new mining political-economic elite of the region. See Jaime Chumacero, “Potosí entre la eterna frustración y su incierta combatividad,” Pulso, August 15, 2010.
 “Conflicto en Potosí es el más largo desde la caída de Goni,” Página Siete, August 14, 2010; “El Origen del conflicto fue la caliza,” Página Siete, August 14, 2010.
 Jose Mirtenbaum, “No se puede medir la magnitude,” Página Siete, August 14, 2010.
 Neil Smith, “The Geography of Uneven Development,” in Bill Dunn and Hugo Radice, eds., 100 Years of Permanent Revolution: Results and Prospects, London: Pluto, 2006, p. 189.
 For an alternative view, see Frederico Fuentes, “Bolivia: Social Tensions Erupt,” Green Left Weekly, August 15, 2010, available online at:http://www.greenleft.org.au/node/45140.
 Juan Collque and Pablo Poveda, “Hegemonía transnacional en la minería boliviana,” Le Monde Diplomatique, edición boliviana, agosto de 2010.
 Juan Collque and Pablo Poveda, “Hegemonía transnacional en la minería boliviana.”
 Roberto Laserna, “El cambio que no cambia,” Pulso, August 8, 2010.
 Drawing on data from Bolivia’s National Institute of Statistics, the best study thus far charts poverty and extreme poverty trends up to 2007, which are the latest available figures. The study notes that since 2005 there has been only marginal change in the poverty rate, and that this change has been slightly upward, from 59.9 percent of the population in 2005 to 60.1 percent in 2007. Levels of extreme poverty increase from 36.7 to 37.7 percent over the same two year period. At the same time, other categories relevant to living standards highlighted, such as household density, and access to electricity, running water, and sewage systems, all show modest improvements between 2005 and 2007. It is possible that poverty levels have improved since 2007, and it should also be noted that these figures do not take into account improvements in the social wage of workers and peasants – i.e. any improvements in social services for the poor. Again, however, social spending has actually declined as a percentage of GDP under Morales, even as it increased in real, inflation-adjusted terms. The record on poverty shows that there is little to celebrate. The key data here is derived from Mark Weisbrot, Rebecca Ray, and Jake Johnston, Bolivia: The Economy During the Morales Administration, Washington, DC: Center for Economic and Policy Research, December 2009, p. 16. It ought to be noted the poverty figures from ECLAC do not correspond with the figures discussed here. The latest ECLAC publications provide national figures for 1999 and 2007, and claim that there has been a downward shift in Bolivian poverty from 60.6 percent poverty to 54 percent poverty between these years. See ECLAC, Anuario Estadístico de América Latina y el Caribe, 2009, Santiago: ECLAC, 2009, p. 65.
Inequality, likewise, remains a huge barrier to achieving social justice in the Bolivian context. Between 2005 and 2007 income inequality, as measured by the Gini Coefficient, declined from 60.2 to 56.3. Figures for the distribution of Bolivian national income show that the poorest 10 percent of the Bolivian population received 0.3 percent of national income in 1999, and still received only 0.4 percent by 2007, the last available figure. Meanwhile, the richest 10 percent of the population took home 43.9 percent of national income in 1999 and precisely the same percentage in 2007. If we broaden our perspective, to compare the bottom and top fifths of the social pyramid, we reach similar conclusions. The poorest 20 percent of society took in a mere 1.3 percent of national income in 1999 and, in 2007, a still-paltry 2 percent. The richest 20 percent of the population pocketed 61.2 percent of national income in 1999 and 60.9 in 2007. In other words, there has been almost no change on either end of the scale in terms of the redistribution of income, never mind the redistribution of assets. See, Mark Weisbrot, Rebecca Ray, and Jake Johnston, Bolivia: The Economy, p. 18 for inequality figures employed here.
 Quoted in Danitza Pamela Montaño T., “La economía, el reto para consolidar el nuevo Estado,” Pulso, August 8, 2010.
 “ ‘Hay que mejorar el clima de inversión’: El máximo del Banco Mundial en la región mira a Bolivia,” Página Siete, August 15, 2010.
 Demmis Valenzuela, “BM asegura recursos para tres proyectos: Con un aporte de $US 140 millones,” Página Siete, August 11, 2010; “BID entrega $US 30 millones para apoyar la gestión pública,” Página Siete, August 11, 2010.
 Personal interview with Wilson Mamani, Executive Secretary of the Federation of Factory Workers of La Paz, August 11, 2010. Also see, Jeffery R. Webber, “Evo Morales and Bolivia’s Reconstituted Neoliberalism,” International Socialist Review, forthcoming (September-October, 2010).
 Raúl Zibechi, “Movimientos-Estados-movimientos,” La Joranda, July 16, 2010.
 Personal interview with Carlos Rojas, ex-leader of FEJUVE-El Alto, August 10, 2010.
 “El diálogo avanza pero Potosí mantiene el paro y el bloqueo,” Pagina Siete, August 15, 2010; “IV Foro Social: Presidente Morales viaja a Paraguay,” Página Siete, August 15, 2010; “El diálogo se abre en Sucre, pero sigue el paro y bloqueo,” La Razón, August 14, 2010.