Bolivia: What’s Happening in Potosi? (Updated)

New (Aug. 16): Jeff Webber, who is currently in Bolivia, has published an article that looks at the situation in detail: “The Rebellion in Potosi.”

Read the article by Federico Fuentes, “Bolivia: Social Tensions Erupt” and this comment on the situation by Jeff Webber:

This article is interesting but misses crux of the situation:  that the mining regime that prevails in the department (province) of Potosi, as elsewhere in the country, is fundamentally neoliberal, and that this is a MAS strategy, not a deviation from their plan, or a distortion by disgruntled state bureaucrats leftover from old regimes.

A recent study of a Canadian subsidiary, PanAmerican Silver, operating in the department through a shared-risk contract with the state company COMIBOL (COMIBOL effectively controls about 30% of the project), for example, shows that the company will pay merely 17% taxes and royalties on projected profits over the next 30 years. The taxes going to the municipality where the company is located, one of the poorest in the country, is just over 0.5%. This is straightforward looting. By comparison, for example, in various shared risk contracts in Chile taxes and royalties going to all levels of the state amount to up to 51% for equivalent contracts.

So we’re dealing with the poorest department in the country (where life expectancy is something like ten years less than the national average), which gave 80% support to the MAS in the last elections, rising up in a protest against neoliberal continuity and the failure of basic responses to endemic poverty. The class character of the protest is complex. Some of the leadership is clearly the cooperative miners. The richer layer of the cooperative miners are basically reactionary petty capitalists working together with transnationals in Potosi against the rights of state-employed miners. Also in the leadership are other sectors that might accept merely a clientelistic buy-out by the MAS to supposedly solve the situation. But this has grown into something much, much larger. Sixteen days of general strike (total lockdown of the city) and road blocks that have cut the department off from all other departments, as well as from Argentina and Chile.

Negotiations have now started with the government, but it’s hard to exaggerate the significance of this break with the MAS, and the ways in which the government’s populism will be unable to contain the growing discontent from urban and rural popular classes. For example, the factory workers of La Paz, who supported the MAS officially in the December 2009 elections, have broken officially with the government.  FEJUVE (Federation of Neighborhood Organizations) El Alto, for the first time in four years, have changed course with new elections and have said that this government represents neoliberal continuity; three members of the new executive board come from a new revolutionary federation of neighbourhood councils in the city. There will be major conflicts, possibly major strikes, over the proposed pension law which is abysmal and which effects the entire formally-employed working class.