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Democratizing Bolivia’s natural resource regime

Isabella M. Radhuber held a Rosa Luxemburg Foundation scholarship in the ‘Democracy and Capitalism’.

The plurinational state project proposed by the indigenous peasant majority in the Bolivian population aspires to strengthen the diverse economic forms that are being practiced throughout the country. However, until now, mainly the state economy in the extractive sector has been intensified and other economic forms and actors have not been equally supported. This is a consequence of competition between different political priorities on diverse scales.

Latin American societies and states formed around the disputes about control over natural resources, as Bolivian intellectual Rene Zavaleta highlighted. In Bolivia, from the 16th to the 19th century, the exploitation of silver in Potosí and the exports to Europe made Europe’s industrialization possible. In the 19th and 20th centuries, the state economy was based on silver, tin, saltpetre and on rubber exports. Today, natural gas is the main natural resource. This presupposes a political economy characterized by exports of primary goods and therefore value transfers from peripheral to core countries. On the other hand, it leads to what Quijano describes as ‘coloniality of power’, a rule pattern made up of a specific combination of racism and global capitalism.

The natural resource regimes are characterized by alternating nationalizations and privatizations, whereby nationalizations enhance the possibility to extend societal control over the resources and thereby democratize the resource regime. In Bolivia, social movements set the agenda for the democratization of society and the state. This became especially evident in the ‘October Agenda’ from 2003, which put forth the demand for nationalization of the strategic resources, as well as the democratization of the state through more interculturality and a plurinational state design. This proposal emerges in the context of the colonial nation and state formation and aspires to an equal coexistence of the different civilizational, especially indigenous, forms of living in Bolivia, including their forms of political organization, economic production and legal systems.

The plurinational state has been formally recognized in Bolivia, but new protests and tensions arise that especially refer to the natural resource regime. Protest marches against extractive activities and their socioecological consequences are beginning to intensify again, especially since 2009. They focus on further societal control, particularly by the local population, over territories and natural resources. This can be explained by contrasting the social movements’ agenda with the current economic politics of the state.

Social movements handed over a document with their demands, the Unity Pact, to the Constitutional Assembly in 2005, proposing coadministration of natural resources with the state. This would be based on the idea of cogovernment, which is at the core of the plurinational state project, alongside with a mixed economy supported by the state. Coadministration was not integrated into the constitutional text, but a plural economic model was inscribed in articles 306 to 310 of the constitution. Four different economic forms, which also imply political forms, were recognized: public, private, social cooperative and communitarian forms. These should be weighted equally and have to be fully articulated. According to the legal articles, the communitarian form must be especially strengthened by the state, since this form comprises ‘the systems of production and reproduction of social life’, as it is specified in the Constitution, and is founded on the principles and visions of indigenous peasant nations and peoples.

However, an examination of state finances shows that the state economy in the extractive sector predominates, and that other economic forms are not equally supported. This can be explained by the competition of scales explained below, but also by the incomes for the state from the extractive sector. Data from the Bolivian Ministry of Economy shows that the significance of extractive activities, and especially hydrocarbon politics, for the national income increased significantly since 2001, and even more since 2005.

In relation to state income, direct and indirect tax on hydrocarbons constituted 27.6% of tax income in 2011. Another 48.4% of total income derived from state companies. In 2011, 37.4% of state expenditure was destined for state companies – the high priority of this sector has only become evident since 2005 – with 89.9% of this amount designated to the state company in the hydrocarbon sector (Yasimientos Petrolíferos Fiscales Bolivianos, YPFB). This shows that the state economy in extractive activities predominates for generating incomes and redistribution through measures of social politics (which must not be underestimated), and that other economic forms are not supported equally. But it also shows that hydrocarbons are the material basis of the government’s extractive project, including nationalizations and mining in the natural resource sector.

The question however is to what extent this government’s project, especially in the economic sector, corresponds to the social movement’s plurinational state and plural economy project. Tensions arise, especially in sectors that are strongly entangled internationally and transnationally. This might foil the project of the social movement of a plural economy, which is trying to strengthen its projects on different economic scales by reterritorializing the country and empowering a plural economy.

Social movements still promote proposals for coadministering natural resources. The indigenous highland organization, CONAMAQ, for example, suggests coadministration of mining activities. Also in the lowlands, local communities demand self-determination and control over territories, as well as cogovernment and coadministration of resources and projects. This is the case in, among others, the conflict around TIPNIS, where the government is going to construct a road right through indigenous territory, and a nature park. Further democratization of natural resource management depends on enhancing plurinationality and a plural economy in Bolivia. To achieve this, both societal and state actors have to reaffirm the decision to diversify the economy and democratize society and state, as societal actors originally demanded and state actors later assured.


Radhuber, Isabella M. (2014): El Estado plurinacional en Bolivia. El papel de la política de presupuestos y recursos naturales (título de trabajo). La Paz: Oxfam/Plural.

Radhuber, Isabella M. (2013): Der plurinationale Staat in Bolivien. Die Rolle der Budget- und Ressourcenpolitik. Münster: Westfälisches Dampfboot.

Zavaleta Mercado, René (2008): Lo nacional-popular en Bolivia. La Paz: Plural.

Author: Isabella Radhuber

About the author

Isabella M. Radhuber held a Rosa Luxemburg Foundation scholarship in the ‘Democracy and Capitalism’.

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