Evo Morales and the Populist Paradox

Roberto Laserna

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LA PAZ – Evo Morales succeeded in amending the Bolivia’s constitution and being re-elected President. And, backed by his parliamentary majority, he was recently able to fill vacant judicial posts, making him the most powerful president in Bolivia’s contemporary history.

According to his opponents, Morales is reproducing the tradition of caudillismo, concentrating power in his hands and turning government institutions into mere formalities. But his immense popularity over the past five years suggests that most Bolivians do not seem very worried in putting their country’s democracy at risk.

Morales’s success rests largely on the paradox of populism. Although he claims to oppose economic liberalism, he is a product of the political liberties that it promotes and feeds on the benefits generated by the market economy.

Morales was born into a peasant household on the Andean altiplano and later established himself in Chapare at the beginning of the coca boom. His career as a union leader took him away from agriculture and into politics, where he stood out for his criticism of the United States, whose anti-drug crusade meant the eradication of a cash crop for poor peasants.

By defending the coca leaf, consumed for centuries in the Andean world and the raw material for cocaine, Morales was able to link his opposition to America’s anti-drug policy with the defense of native cultural tradition and the economic rights of the poor. Thus, Morales’s leadership brought together three strongly symbolic dimensions: nationalist sentiment, concern for the poor, and emerging ethnic pride among Bolivia’s native peoples.

But the making of Morales as a leader able to combine these three dimensions reflects two institutional reforms in the 1990’s that expanded social participation and opened up opportunities for new leaders and political movements. The division of the country into municipalities transferred tax resources and decision-making capabilities to communities, thereby enabling agricultural unions to control several towns and assume management responsibilities. This led to the formation of new political parties, and the creation of regional councils in 1997 made it possible for leaders with strong local roots – like Morales – to reach Bolivia’s congress without any major party’s backing.

Once situated at the center of the political scene, Congressman Morales took advantage of his constitutional immunity to intensify his union activities and his fight against anti-drug policies. In the 2002 elections, Morales received an unexpected boost from the US ambassador, who, by declaring himself against Morales, stirred up nationalist sentiment.

Morales went on to win the 2005 presidential election with an absolute majority. The other parties made it easier for him by discrediting each other, failing even to defend their own achievements over the previous 20 years. Two other factors that made Morales’s rise possible were the revival of Bolivia’s oil industry and the creation of mechanisms for distributing the income that oil produces. Both now sustain his rule.

Private investment in the mid-1990’s, moreover, increased output of natural gas. Soon gas was being exported – very profitably – to Brazil. Thus, when Morales came to power, Bolivia’s economy was in a position to take advantage of the global price boom for raw materials. As a result, revenues increased, despite his government’s nationalist and statist policies, which drove away investment and hindered access to new markets.

Since 2005, Bolivian exports have increased six-fold, along with fiscal revenue. This money is distributed automatically to local governments, according to the model established by Morales’s predecessors, carrying resources to the farthest reaches of the country. But it is not only local governments that have benefited; through cash transfers created during the so called neo-liberal years, families have gained as well, most importantly through a universal and non-contributive old-age pension benefit given to persons over 60, which reaches slightly more than 30% of households.

In recent years, aid for students at public schools and maternity assistance for pregnant women at health centers have been created, but these have a greater political than economic impact. Indeed, Morales’s economic initiatives usually turn out to be empty, such as his deals with Venezuela for hydrocarbon supplies and with India for iron. His plan to exploit and industrialize the country’s gas fields remains just a promise.

The Bolivian economy has grown moderately under Morales’s management, owing to international demand and cash transfers from the state to local governments and individuals. These not only increase household spending, but also offer opportunities for trade, in both the formal and informal sectors, making it the most successful policy in the fight against poverty.

Thus, despite official speeches intended to support state intervention, Morales’s government benefits mainly from the workings of the market. The failure of state plans and projects is overlooked because of the small but expanding internal market, which is invigorated by de facto economic liberalism involving the growth of smuggling and drug traffic. These illicit activities are not intended, but they increase the income of peasants, transporters, builders, and businessmen.

This is the paradox of twenty-first-century socialism: economic liberalism is the foundation for a policy that aspires to replace it. This might also be its greatest limitation as a political project.