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Page last updated at 14:57 GMT, Saturday, 7 February 2009

'Rocky ride' for Bolivia after vote

By James Painter
BBC Latin America analyst

A road in El Alto
President Evo Morales enjoys strong support in places like El Alto

The official results of Bolivia's referendum on a new constitution confirm what most observers had suspected: the country is divided along regional lines as strongly as ever.

But the geographical fault lines are set to be compounded by two other factors in 2009.

First: Elections are scheduled for the end of the year.

Second: The global economic turndown is going to make it more difficult for left-wing president Evo Morales to deliver social improvements to his supporters.

Mr Morales can claim a resounding victory with 61.4% of voters nationally backing the new constitution.

But the governors of opposition strongholds in Santa Cruz, Beni, Pando and Tarija can also claim success, arguing that was less than the 67% Mr Morales won in a recall referendum last August.

The political conflict, which at times has become violent, is set to continue.

Greater complications

There are two main areas where the opposition is likely to continue its fight.

KEY REFORMS
Re-election: Allows Mr Morales to stand for re-election in Dec 2009
Indigenous rights: Stresses importance of ethnicity in Bolivia's make-up. A whole chapter devoted to indigenous rights
Autonomy: Power decentralised, four levels of autonomy - departmental, regional, municipal and indigenous
Resources: Sets out state control over key economic sectors, state sovereignty over vast natural gas fields
Judiciary: Indigenous systems of justice same status as official existing system. Judges will be elected, and no longer appointed by Congress.
Land: New limit on ownership 5,000 hectares (12,355). But measure not retroactive.
The first is in Congress, where the ruling Movement to Socialism party (MAS) does not have a majority in the upper house.

It is likely that more than 100 new laws will need to be passed to make the constitution operational. Some members of Podemos, the main opposition party in Congress, are bound to try to block them.

The second area is how the various levels of autonomy will work.

To give an example: One of the opposition-controlled regions, Tarija, holds about 85% of Bolivia's reserves of gas, which is the country's main export.

But about 80% of those reserves are estimated to be in traditional lands of the Guarani Indians, one of the 36 indigenous groups in Bolivia whose rights have been extended under the new constitution.

Political discord is likely to increase as a result of the referendum as it becomes more complicated to resolve competing claims over how to distribute the gas income, worth more than $200m (138m) to Tarija last year.

In the past, the dispute was usually between the region and the central state, but now indigenous groups are likely to stake a claim.

It is possible meanwhile, that the different strands of the opposition start to pay more attention to finding a unitary candidate to take on Mr Morales in the presidential elections, and less attention to pushing their regional demands.

Supporters of new constitution celebrate in La Paz
Smiling during the referendum but hard times may lie ahead
But they will have three fundamental obstacles.

The first is that recent voting suggests that they will be very hard pushed to break the 40% barrier at a national level.

The second is that leaders from the regional opposition strongholds do not, as yet, have a national project which could appeal to the majority indigenous population.

The final problem is more practical. Several politicians have put themselves forward as an opposition candidate, but it will be difficult to find one that broadly has appeal and is acceptable.

Economic vulnerability

The one area where Mr Morales may be weak in 2009 is the economy.

Bolivia is particularly vulnerable to the global economic downturn for three reasons: the fall in commodity prices; the drop in demand; and the decline in remittances.

Four commodities, oil, gas, zinc and tin, make up about two-thirds of Bolivia's exports.

The price of zinc has dropped by about a half in the last six months, tin by a third.

Oil and gas revenues were worth about $2.2bn in 2008 and are estimated to drop by about $700m in 2009.

Bolivians probably did not even read the text of the new constitution but voted for it anyway as a show of support for Mr Morales
High commodity prices over the last few years are the main reason why Bolivia has been able to run a historically unusual fiscal surplus.

But this is not likely to be sustained, which could mean less money for social spending and less money to distribute to the regions.

Demand for minerals is also set to drop. Bolivia exports large quantities of zinc to South Korea, for example, where demand is already plummeting.

The US's suspension of trade preferences for non-traditional exports like textiles is also likely to have an adverse effect, particularly in El Alto where support for Mr Morales is very strong.

Finally, remittances sent home by Bolivians abroad are already falling rapidly from the $1bn they were worth in 2008. These provide a very important safety cushion for large sectors of the poor.

'Instability'

Despite the unfavourable economic context, analysts say it is hard to see Mr Morales losing the election in December, which would give him a five-year term.

map
He remains popular, and the opposition remains weak at a national level.

Unlike Hugo Chavez in Venezuela, Mr Morales emerged from a well-organised, largely indigenous social and trade union movement, where his roots and support remain strong.

Proof of that was that many Bolivians probably did not even read the text of the new constitution but voted for it anyway as a show of support for Mr Morales's social and political project to shift resources to the indigenous poor.

The country is set for another rocky ride in 2009.

But then as observers often remark, Bolivia is well-known for the "stability of its instability".



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Battle for Bolivia's heart
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