Santa Cruz’s Referendum, Bolivia’s Choice


[Also see: Understanding the May 4th Referendum in Santa Cruz, Bolivia]

Source: openDemocracy

The referendum in Bolivia’s eastern region of Santa Cruz on Sunday 4 May 2008 will – whatever its outcome – stand as a landmark in the country’s history as a unitary nation. The central government may have declared it illegal, but the referendum’s organisers are determined to proceed in seeking public approval for a set of proposals that would grant Bolivia’s most prosperous department de facto autonomy from La Paz.

The authorities in Santa Cruz – notably the department’s prefect Rubén Costas, and the president of its civic committee Branko Marinkovic – launched their so-called "statute of autonomies" on 15 December 2007, the very day that the country’s constituent assembly handed over the draft of a new constitution to President Evo Morales (see "Bolivia’s controversial constitution", 10 December 2007).

The opposition parties, chiefly the rightwing Podemos grouping, had previously boycotted the plenary of the constituent assembly, enabling the ruling Movimiento al Socialismo (MAS) to achieve passage of its draft text unopposed. Santa Cruz, the main bastion of the opposition, thus decided to take matters into its own hands, in rejecting the constitution and proposing to go its own way.

The meaning of autonomy

If the "statutes of autonomy" are approved – as opinion polls suggest will be the case – the result will be radical changes in the relationship between this department and the central government in La Paz. A new regional "government" in Santa Cruz would assume control over areas such as the distribution of land, the migration of people, as well as cutting much of the tax income that flows from the department to the treasury (see "Once more to the brink", Economist, 24 April 2008).

Moreover, the step taken by Santa Cruz in this direction would be followed over the next two months by the holding of referenda in three other lowland departments which also seek greater autonomy from the central government: Beni and Pando in the north of the country, and Tarija to the south, close to the frontier with Argentina. Tarija is the source of around 80% of Bolivia’s production of natural gas – a vital resource which accounts for most of Bolivia’s exports and the bulk of its fiscal revenues.

These four, contiguous lowland departments – Santa Cruz, Beni, Pando and Tarija – are known (in a reference to the rough shape they draw on Bolivia’s map) as the media luna (half moon). But they share more than geographical proximity: they are the areas which voted "yes" in a referendum in July 2006 – held at the same time as the elections to the constituent assembly – that mandated the assembly to grant autonomies to those departments that wanted them. The country’s other five (and largely highland) departments – La Paz, Oruro, Potosí, Chuquisaca and Cochabamba – followed the government line and voted "no".

The constituent assembly was thus mandated to come up with a system of autonomies that fulfilled this requirement. The constitutional proposal of the MAS involved a complex system of autonomies granted not just to the departments, but to regions, municipalities and ethnic communities within them. The idea here was to balance the power granted to departmental capitals (and their elites) by devolution to a lower level of government, including the granting of autonomies to indigenous groupings in departments like Santa Cruz (see "Bolivia: a tale of two – or rather three – cities", 18 September 2007).

The election of departmental prefects in Bolivia in 2005 – the first time that these figures were voted in rather than administratively appointed – has had important political effects in the argument over autonomy. The prefects were previously administrative appointees, but now have gained legitimacy as elected local leaders wielding substantial budgets. The overall result is to reinforce the country’s centrifugal tendencies.

Rubén Costas, as prefect of Santa Cruz – economically the most powerful department – has made the running on the autonomy issue, backed by powerful civic committees created to pursue the case. The most vocal and influential of these is the Comité Pro Santa Cruz, an organisation representing business interest in the eastern city and region.

The roots of a contest

Behind these arguments about autonomy are three underlying, interconnected and unresolved political issues in Bolivian politics, whose accumulative effect has been to exacerbate the country’s regional tensions over the last two years.

* Land The problem of land distribution in eastern Bolivia has become more acute. The lowland departments were never affected by the 1953 agrarian reform that redistributed land in the highlands and Andean valleys. A series of governments encouraged large-scale landowning as a way of developing agro-industrial production and thereby reducing Bolivia’s dependence on minerals, particularly tin. They also sought to relieve the pressure on land in the highlands by promoting migration to the lowlands.

In recent years, particularly with the expansion of extensive soya production, growing pressures over landownership have built up in Santa Cruz. Small-scale peasants and indigenous groupings have found their properties under pressure from large landowners. In addition, landless peasants have also followed the lead of Brazil’s Movimiento sin Terra (landless movement / MST) in squatting on unused private estates.

The MAS government has sought to ease these pressures by introducing upper limits on private landholding and threatening to redistribute land not being used productively. Its plans have met with strong resistance from landowners’ organisations, notably the Camara Agropecuaria del Oriente (CAO), one of the key institutions that make up the Comité Pro Santa Cruz.

* Gas rents The distribution of rents derived from the oil and gas industry has become much more salient since Evo Morales "nationalised" the hydrocarbons industry in 2006. This measure, which involved the compulsory renegotiation of existing contracts with foreign hydrocarbons companies, greatly increased the amount of money at the disposal of the government. In 2006 and 2007, Bolivia’s central government could declare a fiscal surplus for the first time in living memory.

The four departments of the media luna argue that they should receive the bulk of the revenues that they contribute to the economy. Santa Cruz, for example, has long benefited from a fixed percentage royalty payment on oil and gas produced in the department, which it has used to fund local infrastructure. The implementation of the "statutes of autonomy" would entail a change in such processes and a substantial reduction in transfers to the central government.

The government contends that taxes on hydrocarbons production and exports form income that belongs by right to the whole nation, not just the locality where it is produced. It wants to use these funds to finance much-needed social programmes, in particular the expansion of an existing universal system of old-age pensions. A particular source of contention to the departments of the media luna was the government’s plans to fund the so-called Renta Dignidad by switching money away from the departmental prefects, and thus cutting their budgets.

* Ethnicity The relations between Santa Cruz (with its large "white" immigrant community) and La Paz (with its majority indigenous population) have long been soured by ethnic or quasi-ethnic tension. In 2005, the election of Morales – Bolivia’s first-ever wholly indigenous president, and on an agenda of redressing the ethnic balance and ending the marginalisation that the country’s indigenous population had long suffered – was unwelcome news to the prosperous elites of eastern Bolivia. Their fears were extended by the election of a constituent assembly with a speaker and a large proportion of delegates of indigenous origin; and by the government’s pro-indigenous policy orientation in a number of areas.

The issue of ethnicity has strong resonance in Santa Cruz. Large numbers of people have settled in Santa Cruz since the late 1970s, many of them migrants from impoverished indigenous communities in the highland departments. They make up the bulk of the population in low-income districts in the city of Santa Cruz and in agricultural zones to the north officially set aside for the settlement of migrants. They were also among those who enthusiastically supported the MAS in the 2005 general elections, helping the MAS to win more votes than any other parties in Santa Cruz. The ethnic dimension of this political rivalry in Santa Cruz has been exacerbated by the activities of rightwing youth groups with anti-indigenous agendas.

The ethnic issue also involves indigenous peoples from within the eastern part of Bolivia. These have become vocal political actors since the 1980s in defence of their territory and cultural identity. They claim rights to land, natural resources and even the sub-soil, leading to conflicts of interest with those of large-scale farmers, mineral prospectors and those involved in logging. They support the government’s proposals for greater autonomy in the management of their own affairs.

An international dimension

The referendum in Santa Cruz has roused international concern, especially among some of Bolivia’s closer neighbours. A group of "friends of Bolivia" – made up of senior officials from Brazil, Argentina and Colombia – has striven to foster dialogue between the autonomistas and the MAS government, though so far without success. Brazil and Argentina are especially concerned about the prospect of political strife and instability in Bolivia; they are highly dependent on the continuity of Bolivian gas supplies to meet their own energy shortfalls.

The Washington-based Organisation of American States (OAS) has also sought to help mediate the conflict in Bolivia and to work out some form of consensus solution. Dante Caputo, a former Argentine foreign minister, visited the country on 28 April 2008 for the third time in a month. OAS members have pledged their support to the democratically-elected government of Bolivia. They have noted the government’s willingness to negotiate and how this contrasts with the obduracy of the prefect and the president of the Comité Pro-Santa Cruz.

These two figures have responded that they are prepared to negotiate with the government; but they have refused to postpone the referendum, arguing that any negotiation can only take place afterwards. The political logic is plain: a victory would enable them to negotiate the detailed terms of autonomy to their satisfaction from a position of strength.

The political fallout

The outcome of the 4 May vote in Santa Cruz – and probably others forthcoming in other media luna departments – is not in doubt; opinion polls suggest that (although the country as a whole is divided) a majority of voters in Santa Cruz will indeed vote "yes" to the "statute of autonomies". The government is calling for its supporters to abstain from voting, where obliged to vote, to spoil their ballot papers, or in the last resort to vote "no". Abstention will probably be high in those areas where the MAS has strong influence, but probably not so high as to call the legitimacy of the results severely into question.

The longer-term fallout of the autonomy process will be fundamentally to change the way Bolivia is governed, creating an endless source of tension between the central government and the departments. It would also further undermine the government’s standing in a large part of the country, severely reducing its effective remit. Other departments may also join the autonomies bandwagon, including those – like Chuquisaca and Cochabamba – which voted "no" in the July 2006 referendum.

Bolivia’s government has ruled out the use of force to prevent the referenda taking place, but further conflict is bound to emerge once discussion begins on the terms of the autonomy that is granted. The "statutes" are clearly at variance with the draft constitution, and the leaders from Santa Cruz have made it clear that they will not accept the constitution as it stands. If and when the new departmental authorities seek physically to take control of oil and gas installations, confrontation would be almost certain. At that point, the central government may feel obliged to send in troops to defend these, further exacerbating the tensions and carrying incalculable consequences. Bolivia’s many-sided dispute – at once constitutional, political, economic, ethnic, and in a larger sense historical – has some way to run.