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Last Updated: Friday, 3 June, 2005, 09:33 GMT 10:33 UK
Why is Bolivia in turmoil?
By James Painter
BBC regional analyst

A Coca farmer protests in La Paz, Bolivia
Bolivia has remained locked in poverty
Ever since Carlos Mesa took over the Bolivian presidency in October 2003, hardly a day has passed without some sort of demonstration.

There have been more protests than days in power, according to his own calculations.

For veteran observers of Bolivian politics, there is nothing particularly new about regular street demonstrations, road blockades and protest marches.

Several factors - some short-term, some with deeper roots - have combined to make President Mesa's current hold on office very tenuous.

Market reform

To the surprise of many, Bolivia has enjoyed relative stability in the last 20 years.

Bolivia had been a country with a reputation for coups, boasting the unenviable record of suffering more of them than years since independence from Spain at the start of the 19th Century.

Demonstrators in La Paz
Protesters want the nationalisation of the gas industry

But from 1985 onwards, elections were held regularly and power was shared mainly between three parties, the MNR (Nationalist Revolutionary Movement), the ADN (Nationalist Democratic Action) and the MIR (Movement of the Revolutionary Left).

All three broadly followed free-market economic policies to try and pull Bolivia out of its poverty, and won about 70% of the vote.

Most analysts agree that although this consensus gave Bolivia some stability, two decades of democracy did not create political parties which satisfied people's expectations.

As John Crabtree, author of a new book on Bolivia, Patterns of Protest, explains, the parties "failed to perform one of the key functions in a democracy, in providing the link between society and the state".

Instead, argues Mr Crabtree, the traditional parties were more interested in carving up government positions, which left them with an "awful reputation".

At the same time as mistrust of the parties was growing, various protest movements were gaining confidence, in part helped by a proliferation of non-governmental organisations.

Bolivia is unusual in having so many grass-roots organisations, often based on Indian community traditions.

Dropping incomes

Many Bolivians were prepared to put up with the economic shock therapy introduced in 1985 to control hyperinflation which had reached the dizzying heights of 24,000%.

Short-term pain for long-term gain, many said at the time - but 20 years later, there are few tangible gains.

Observers say some social indicators like infant mortality have improved, but income levels are either stagnant or worse.

The models of the last few years are now in crisis... They have not solved the problems of poverty and social exclusion
Gonzalo Chavez, La Paz's Catholic University

Bolivia is still the poorest country in South America, with around 30% of the population living on incomes of less than $1 a day.

It is also a very unequal society, with poverty concentrated amongst the 62% of the population of indigenous descent.

As Mr Crabtree says, the most dynamic sectors of the economy have been soya and natural gas, neither of which generates much employment.

It is the simultaneous combination of the failure of both the economic and political models which lies at the root of the current instability.

"The two models of the last few years are now in crisis," Gonzalo Chavez of La Paz's Catholic University told the BBC.

"They have not solved the problems of poverty and social exclusion."

Natural resources

It is no coincidence that the immediate cause of the current unrest is the row over a new hydrocarbons law, and more precisely what should be role of the state and foreign companies in exploiting Bolivia's rich gas reserves.

There is probably no other country in Latin America where natural resources arouse such strong passions.

It is not hard to see why.

Bolivia is landlocked, much of it high up in the Andean mountains, so transport costs are high.

The only products that Bolivia has been able to export successfully are commodities with a very high value per unit weight.

Throughout its history it has been an exporter of silver, then gold, then rubber, then tin, then hydrocarbons, and more recently coca and cocaine.

But Bolivia has remained locked in poverty.

Many Bolivians blame the "saqueo" or plunder of their resources by foreigners, so it is not surprising that a common theme of many recent protest movements has been against foreign companies and in particular their control of water supplies in Cochabamba and El Alto.

In recent days protesters on the streets have been chanting for the nationalisation of foreign oil and gas companies - an unusual demand in contemporary Latin America.

Another complicating factor is strong regional tension.

The eastern provinces of Santa Cruz and Tarija, where much of the energy industry is based, want more autonomy and the continuation of foreign investment.

Mr Mesa has the daunting task of juggling their demands and those of radical protest movements, foreign companies, political parties, congress, the US embassy and international financial institutions.

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