Bolivian Protests: What caused the Protests and what impact did it have on the Economy

By: Navya Bajaj, Sasthaa Gingee Babu, Shreya Kasibhatla Research Head: Shreya Kasibhatla

Editor: Akshat Daga

Abstract Bolivia is currently facing civil and political unrest with people taking to the streets to voice their concerns against the current interim government. The interim government, headed by Jeanine Anez, has set the date for the new election (May 3rd, 2020). With the country in its current state, one might wonder how it came to be this way. This paper will look at the causes of the protests, analyse the economy under the ex-President and talk about some of the impacts that the protests have had. Finally, there will be a section about what the government can do, moving forward.

1. Cause of the initial protests On November 10th, 2019, Evo Morales, the first indigenous President of Bolivia resigned after having power for more than 14 years. He was accused of electoral fraud by the opposition and the people. The people expressed their discontent so intensively by protesting that the nation was paralysed. (Boulding, Foxworth, Hummel, Nuñez, Velasco-Guachalla, 2019)

The above graph shows Morales (2006 onwards) maintained a stable rate of popularity with his people. Furthermore, Morales maintained broad support (Machicao and Londoño, 2019).

2. Economy under Morales

The economy under Morales went through several economic transformations. The real GDP grew by 50% over the 14 years of his reign. This was twice the growth rate of the neighbouring countries at that time. Even as the growth of other countries slowed down, Bolivia had the highest growth in per capita in the continent. (Arauz, Weisbrot, Bunker and Johnston, 2019)

For the majority of the 13 years, Bolivia has had surpluses in its balance of payments. The country’s constant economic growth has also contributed greatly to reducing its poverty rates. (Arauz, Weisbrot, Bunker and Johnston, 2019)

Something Morales’ government is known for is nationalisation of hydrocarbons in 2006. This was pivotal to Bolivia’s economic progress. In the first eight years of administration, revenue from hydrocarbons increased tremendously. (Arauz, Weisbrot, Bunker and Johnston, 2019).

Source: researchgate

Morales was seen as a hero because he improved the lives of many natives. However, just like Rafael Correa in Ecuador, Morales laid the groundwork for his own undoing (Sarmiento, 2019). Manuela Picq, who teaches political science at Amherst College, has found similarities between Rafael Correa and Evo Morales.

Picq says that both the leaders slowly went back on their commitments on environmental welfare and focused only on improving economic well-being (Picq, n.d.) Picq points out that Correa approved oil drilling on a sacred ground, where many natives were residing. Analogously, in 2017 Morales approved construction of a controversial highway through a National Park that natives held sacred in the name of expanded infrastructure. Over his third term, Growth slowed despite the spending splurge. Public debt soared from 38% of GDP in 2014 to 53% in 2019, according to the World Bank. The budget deficit is projected to hit 8% this year. All of these reasons eventually led to the protests, followed by Morales’ resignation. 3. Impact: The protests have had catastrophic impacts on the Bolivian economy. Lap Paz, the capital, is gripped by food and fuel shortages. Supporters of deposed President Eve Morales blocked main roads and highways, increasing pressure on the country's interim government. The blow is also being experienced by farmers. Agriculture is an integral part of the Bolivian economy, contributing about 13 percent of GDP and accounting for just under 30 percent of total employment (World Bank, 2017). Clashes left 9 pro-Morales coca farmers dead, raising concern over excessive use of force by security forces and increasing demands from protesters for Anez to step down (Aljazeera, 2019).

Morales has used the proceeds of the country’s commodity-driven economic boom to fund welfare programs, public work projects and education, fuelling one of the region’s strongest economic growth rates and helping to cut the poverty rate by nearly half. Even if MAS wins, they might have to make tough choices as economic growth slows on slumping natural gas exports and a fiscal deficit that has swollen to 8% of gross domestic product (Reuters, 2019)

Bolivia’s crisis has also exposed racial, ethnic and geographic divides that some thought had been largely overcome during Morales’ administration as well as the introduction of a more inclusive constitution. Analysts say the movement to remove Morales was an urban middle-class revolt against the former president’s efforts to hang onto power. But since his departure, racist discourses and regional rivalries have re-emerged in a nation divided between a wealthier, more European-descended lowland east and a more indigenous, poorer, highland west.

Any potential attempt to prevent the MAS and its most representative candidates from taking part in future elections, by mimicking other efforts in the region to outlaw the Left and its political leaders, will send the country further into a spiral of unrest and instability. Bolivia may yet experience much turmoil, repression, violence, and anguish before it sees the restoration of democracy and the rule of law. 4. Why are people still protesting? One may wonder why the people are protesting even after Morales’ resignation. It is mainly because of the current interim government. On November 13, Jeanine Áñez, second vice president of the Senate and a political opponent of Morales, took office as interim president in a highly controversial move that the Constitutional Court endorsed. (Roth, 2019) President Áñez announced and adopted some alarming measures that run counter to fundamental human rights standards, including a decree that would have shielded military personnel from accountability for abuses during crowd-control operations, which has since been repealed. (Roth, 2019) 5.0 Conclusion Bolivia witnessed key developments in recent days. These help calm the protests down and reinforce the democratic institutions. On 22 November 2019, a peace building dialogue under the support of the United Nations, the European Union and the Bolivian Conference of Bishops was launched. This was followed by a bill approved by the MAS-led legislature to pave the way for elections. Under the new law, former president Morales is barred from being a candidate (Walsh J. , 2019). Having bolstered Anez at the outset, the Trump administration is expected to explicitly denounce abuses committed by the interim regime. The U.S. Government supports the efforts and steps made by the international community to facilitate dialogue as well as call for a prompt and thorough investigation to hold those accountable for abuses. At the end of the day, the goal is to convene credible new elections and take all measures to restore social peace and build an inclusive democracy in Bolivia (Walsh J. , 2019).

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