California's Ballot Initiative Explosion

Before my family and I moved to Bolivia, and my work began focusing on international issues, I was a California political junkie. For more than twenty years I was a campaign activist, an aide to the California Legislature, an advocate with Common Cause and Consumers Union, and a leader in the state’s public interest community.

For a while, I was even a pundit, due in part to the surprise popularity of a little book I wrote in 1996 about California initiative politics, The Initiative Cookbook, Recipes and Stories from California’s Ballot Wars.

This week I got to have a little punditry flashback when the San Francisco Chronicle called to do a long interview about the wild state of California initiative politics today. Here’s the article. I confess to still being a California political junkie from afar, with the help of a fine Web site on California politics, Rough & Tumble.

A century after California Progressives established the initiative process as a way to counter-balance the state’s big special interests, like the railroads, big money special interests are doing pretty well as initiative campaigners.

More than sixty different ballot measures are currently in circulation for the California ballot. Many, if not most, will probably fall thousands of signatures short of the requirements to qualify for the ballot. But even if a fraction does qualify, state voters are headed toward an initiative ballot longer than any in state history, longer than an LA traffic jam.

What is going on is easy to see, even from six thousand miles away. First, the state’s political process is grinding to a partisan standstill. The big issues just aren’t going to get addressed and the political desire to make change heads instead for the ballot. Second, Governor Arnold Schwarzenegger is doing what every governor for the past three decades has done – although in his case on steroids – he is taking his causes to the ballot instead of to the Legislature. Most governors have been content with one initiative. The Terminator has a handful.

Finally, it is a simple fact, as I pointed out in the Chronicle article, that for a million dollars you can put pretty much anything you want on the California ballot. Whether you are campaigning for or against something, the opportunities for return on investment are enormous for special interest groups. My favorite example is the 1990 campaign by the state’s alcohol industry against a ballot measure to boost California’s lowest-in-the-nation alcohol taxes. The initiative would have cost the industry $760 million per year. To defeat it they spent $27 million. That was a 28 to 1 return on their investment in the first year alone -- not bad.

Anytime you can buy public policy, it is usually, financially speaking, a pretty damn good deal. The initiative process is full of such opportunities.

On the other hand, this cry of, “The initiative process is out of control!” is really old news. I head it all the time when I was writing and commenting on initiative politics in California. One journalist even suggested once, in jest, that I shared some of the blame for it by writing a handbook for amateurs. That alarm sounds a little like every new generation’s warning about the music of its teenagers.

You would be surprised how clever California voters are at filtering out the bad initiatives and passing just a few measures that they like. Voters aren’t stupid. The alternative is to abolish the whole process, and California is no more likely to get rid of initiatives than it is earthquakes. After a century, the initiative process – good, bad and ugly – it is a fact of political life in my home state.

There are some reforms, however, that are badly needed. If you are interested in that, or in the initiative process in general, or like animated bears dressed as cooks, you might enjoy taking a look at The Initiative Cookbook. Meanwhile, if you are a California voter, good luck!

Easter in Bolivia

It is holidays, I think, that bring out the distinctions on our cultures.

I can picture the US this week, giant bunnies everywhere run amok. Children comparing the relative merits of hollow chocolate rabbits vs. solid ones (Is there really a contest on that point?), and green jellybeans vs. yellow ones. What drove me whacko as a kid was that my older sister used to actually hoard her chocolate rabbit in the back of the fridge, until maybe Thanksgiving. Really, there ought to be a law saying that the rabbit passes to your brother if it isn’t gone by May.

But I digress.

In Bolivia Easter looks a little different. First, the big event here is not Easter it is Good Friday. Among Christians in this part of the world the event is the crucifixion, not the comeback. You can see this as well in the images of Jesus on the cross in the north vs. the south. Crucifixes here are all blood and gore, the stuff of a Mel Gibson movie. My theologian friends would say that in Latin America, a suffering people identify with a suffering deity.

Last night here in Cochabamba was a time of visiting churches and making midnight pilgrimages into the mountains. Tradition here is to visit twelve churches on that Thursday night before Good Friday, and the Catholic churches of the city are adorned with elaborate altars, singing nuns, packed pews, and a heavy dose of candied apples for sale outside. Thousands are on parade walking from one church to another.

The pilgrimages, of mostly young people, involve leaving home at around 11pm and heading to a high spot in the mountains to see the sunrise. My 17 year-old son Miguel set out last night (he’s a Catholic, I’m not) with his friends, armed with peanut butter and jelly sandwiches. In reality, I think it is more about an excuse to stay out with your friends at night, but whatever, he got some good exercise.

Good Friday is also a holiday here. Offices, schools and life in general are shut down. That’s good, Bolivia can use a break right now.

As usual we will throw a little Gringo tradition into the mix. This afternoon a mass of Bolivian friends is coming over to participate in a spectacle that I know they consider to be really, truly odd. We are going to take some chicken eggs, boil them in water, and then color them in little cups. What are these gringos thinking? Do they really like to eat hard-boiled eggs? Do they only like to eat them if the shell is dyed purple? Does it change the flavor?

In Bolivia it’s not hard-boiled eggs that mark the holiday. The special plates here involve pumpkin and potatoes. Che Guevara once said that the first sign of homesickness is missing the food. Don’t worry about us though, they are selling chocolate eggs on the street here too.

Are The Oil Companies Crying Wolf?

It is the endgame now in the long-fought Bolivian political battle over how much the country will charge foreign oil corporations for the privilege of developing the nation’s vast oil and gas reserves. As the Congress considers a final bill (the House of Deputies already passed one and the Senate is looking it over) the corporations are using their standard nuclear bomb – “If you charge us more in taxes we will walk away.”

Bolivia, its politicians, its media, its social movements and business leaders, and the public as a whole face a judgment that many others have faced before. Are they crying wolf or do they mean it?

Threats by corporations that they will leave if they don’t get tax policy to their liking are old news. Sometimes the threat is serious and governments need to take heed. Other times it is a standard negotiating ploy to get governments to back down. Why not make the threat? Corporations have everything to gain from making political leaders nervous and nothing to lose.

Here’s a little example I used in my book, The Democracy Owners’ Manual, in the chapter on taxes – Taco Bell’s threat to leave California.

In 1993 executives at Taco Bell threatened to move their corporate headquarters from California to Texas if they didn’t receive a hefty tax break from the state. California lawmakers fell over themselves to offer up an expensive new tax cut for the company, dubbed by critics, the “run for the border” tax cut, after the fast food giant’s well-known advertising slogan.

Then, just as the state was ready to approve it, the Taco Bell move ended up unraveling on its own. The landlord of Taco Bell’s headquarters, fearful of losing a major tenant, lowered the corporation’s rent by even more than the proposed tax break. Then the executive spouses took a trip to Plano and decided that over their dead bodies were they moving from the shores of Laguna Beach to the sands of Texas.

Today in Bolivia it is the oil companies’ turn. In a press release, Brazil’s state-owned oil giant, Petrobras announced, "Approval of the hydrocarbons law will without a doubt entail serious difficulties for Brazilian investments in Bolivia." One might rightfully ask if the Brazilian government is getting 50 percent from Petrobras. Similar statements have come from other companies this week as well.

Crying wolf or just stating the facts? Is a return to the 50/50 Bolivia/foreign corporation split of the days before privatization really such that companies would abandon the second largest oil and gas reserves in South America?

The answer, as I have written before these past few weeks, is not something to guess at. It is a numbers question. If the companies want their threat to be believed then they should make public their earnings statements and show Bolivia the math. Until they do, Bolivians should be rightfully skeptical.

Jumping Off a Cliff

There is something about running full speed off a 1500 foot cliff that, well, will pretty much scare the $%^# out of you. Especially if you are me. I don’t like heights generally. It may be that I went crashing to my death in a previous life or it could be just common sense. Could be a bit of both. In any event, running off a cliff is exactly what I did recently in Brazil, when my 18-year-old daughter cajoled me into taking her hang gliding.

A note to fathers – never casually mention an idea to your adventurous daughters (or sons) unless you are prepared to go through with it. Ten seconds after the words are out of your mouth you’re a goner.

Elizabeth and I drove with our hang gliding pilot up to the top of a steep peak overlooking Rio de Janeiro. Before he finished the question, “Who first?” I blurted out “Me, me.” It is one thing to jump off a cliff and another to stand around on a cliff for a long time thinking about it. As I peered nervously over the edge of the wooden platform off of which I would soon have to leap, two thoughts came to mind. One was that if a lot of people died doing this surely I would have heard about it. The second was that I wished I could have reinforced what little courage I had with a stiff drink.

For a moment I thought of chickening out, but the fear of looking like a geek in my daughter’s eyes surpassed my fear of being named “Splat.”

So I ran off a cliff and for ten minutes or so soared like a bird over Brazil’s amazing seascape, landing on a quiet beach to the stares of sunbathers. Elly took her turn as well, as fearless as she was leaping into a swimming pool when she was five.

We filmed each other taking our jumps and copied the little videos onto our computer. A half dozen times per day my two-year-old daughter, Mariana, comes striding into my office at home and demands “Elly Bird!” She is obsessed with the fact that her big sister flew. “Daddy Bird” does not seem to be as much of a draw.

Happily, bungee jumping hasn’t made it to Bolivia yet.

The Washington Post Opts for Rhetoric Over Fact

An editorial in yesterday’s Washington Post demonstrates what happens when editorial writers living a hemisphere away decide to pontificate about Bolivia based on what they read from wire reports – they take one of the nation’s most respected newspapers off the cliff of rhetoric over fact. Here’s the Post editorial, “A Threat to Latin Democracy”.

If you believe what the Post writes, then the current wave of protests in Bolivia are part of some dark, region-wide Latin American conspiracy to upend “democracy” in the name of converting the region into one big Cuba-Iran-Libya-China. Really, I am not making up this stuff. Read the Post editorial.

Let’s start somewhere the Post opted not to -- with the facts.

The Post says, “The insurgents, who claim to represent the country's indigenous population, drove one democratically elected president from office 18 months ago; now they are working on his successor, Carlos Mesa…”

Fact: The popular demands in October of 2003 were all about stopping President Gonzalo Sànchez de Lozada’s gas export deal, which people didn’t trust would deliver for Bolivians. The demand for his resignation didn’t come until the President’s repression against the protests resulted in fifty-three deaths and the call for his resignation came not just from the so-called “radicals” but from mainstream leaders in the church, the legal community and academia. Even his own Vice-President at the time, Carlos Mesa, broke with him over the killings.

Apparently the Post believes that the more “democratic’ course would have been to let the shooting go on unabated. We are fortunate that the Post took a different stance toward failed presidencies during the Nixon administration.

Fact: The protest movements underway now have explicitly NOT called on Mesa to resign. In fact, they have called on him to complete the responsibilities he assumed when he ran in 2002 and serve out his term. I guess this point was too complicated for the Post to understand, or didn’t make for the rhetorical package it was aiming for.

The Post also says that the protests underway today, over the shape of the new gas export law, come from “a radical movement opposed to foreign investment”.

Fact: No one in Bolivia, not even the Post’s “radicals”, is arguing that Bolivian gas and oil be developed without partnering with foreign corporations. The issue is what those partnerships will look like. Who controls the volume of production? How are the profits to be split? As I have written in this Blog many times in the past few weeks, the social movements are demanding a return to the 50/50 split that Bolivia had before the IMF and World Bank coerced Bolivia into privatizing its oil and gas in the 1990s. That is hardly a radical proposal.

If the Post is so concerned with “democracy” in Bolivia, perhaps it might consider how that democracy has been taken away by having key public choices, over privatization of water and the like, usurped by international financial institutions like the World Bank and the IMF. If the IMF or Bank suddenly took it upon themselves to decide the current US debate over privatizing Social Security, would the Post’s editorial writers consider that a problem in terms of democracy?

As I have also made clear in my recent Blogs, I think that the social movements here have used the tactic of road blockades too freely and too many times. But the fact remains that their demands are legitimate and not some Post-imagined conspiracy to install Fidel Castro as leader of the American southern hemisphere.

The Post ought to know better.

Note: We have asked the Post to publish an op-ed in response to their editorial, from Roberto Fernandez and myself. Take a moment if you will and send the Post a note asking them to do that at: oped@washpost.com

Cochabamba Goes to the Dogs – and the Cats

It is a big weekend in Bolivia. Yesterday was Father’s Day here (I am the proud new owner of a blue t-shirt emblazoned with my two year old daughter’s hand prints). Today is Palm Sunday, marked by large processions of Catholics wielding palm fronds, which will be saved until next Ash Wednesday and burned to ash to make crosses on the foreheads of the faithful.

But the big news is that it is Vaccination Day! Here in Cochabamba 2,500 volunteers armed with 100,000 rabies vaccinations have set themselves up across the city and Cochabamba has turned into a parade of dogs and cats. Outside my house as I write the street is filled with every imaginable variety of dog, probably sixty or more. Large ones with short stubby legs, odds mixes of Dalmatian and German Shepard, black dogs with mysteriously white snouts, and fluffy white puppies known affectionately here as “Chapis”.

The dog parade is a highlight for my two year old. I also took note that one of the neighbors is sporting an old anti-Michael Dukakis t-shirt, in which the fluffy-haired 1988 Democratic nominee looks a bit like a dog. Where does this memorabilia come from?

Thanks to the wild cross breeding that takes place here among street dogs, the result is that dogs in Cochabamba are like snow flakes – no two are alike. Our own two – a mother and daughter duo named Simone and Little Bear – are some odd mix that makes them look like mini-Black Labradors. I once described them to a woman walking real Labradors in a posh section of Upper East Side Manhattan. After recovering from the shock that there were apparently mixed-breed mongrels in the world she said to me, “Oh, that would make them apartment-sized Labs then wouldn’t it?”

Palm fronds, Father’s Day presents, and dogs on parade. Do weekends get any better?

The Carlos Mesa Roller Coaster

Readers – I finally got around to writing a more in depth piece about the resigning, not-resigning, resigning, not- resigning drama out of Bolivia this week, which we sent out today as the latest issue of The Democracy Center On-Line newsletter. Here’s the link.

Okay – Now He’s Staying

Should I stay or should I go now?
If I go there will be trouble
An' if I stay it will be double
So come on and let me know.

-- The Clash

Granted it is an odd image. Bolivia's President sitting alone in the Presidential palace, his grey bearded chin resting warily in his hands, listening over and over to the lyrics of a bootlegged Clash CD that he surreptitiously picked up on a lunch time walk down La Paz's main street. Maybe it isn't happening this way, but it seems pretty darn close.

On March 6th President Mesa went on national TV to announce his resignation, which clearly was a move to provoke expressions of political support more than it was an actual threat. It also wasn't a bad move for him, politically speaking. Then he received support, both in the streets and from the Congress in a unanamous resolution caling on him to stay. Then he tells the same Congress -- Okay, I'll stay if you all agree to run for reelection two years early. How do you think the US Senate would react to a propoal to run their races over again two years early?

With that propoal rejected Mesa announced once again he would leave.

Then at 11 o'clock last night, after which all sensible Bolivians had gone to bed, Mesa told the few reporters still gathered near his office, that he was staying. "I am not going to hand over the Presidency to someone who doesn't have the legitimacy of the vote. For this country...I want to guarantee that I will not leave you abandoned."

Again I repeat, it is all about oil. Mesa, under heavy pressure from foreign oil companies to pass a new gas law to their liking, is frustrated that the Congress won't give it to him. In his various threats to resign Mesa has said, "We can't continue governing with a Congress that refuses to accept a minimum of rationality in its negotiations with the President."

Mesa, once the nation's leading newscaster, may have spent too many years communicating into the red light of a television camera that never spoke back to him. In politics it doesn't work that way. Presidents, as a rule, do not resign when their Congresses refuse to follow orders, they play politics to their best advantage and they negotiate.

So just how irrational are the demands coming from Mesa's Congressional opponents on the left? The demand is simple -- as foreign companies develop Bolivia's gas and oil they want the country to get a 50-50 split, a real one, not a fake one in the form of complicated tax schemes designed by the companies.

Suppose you found oil under your house. To be clear, you'd need to develop it in partnership with an oil company who knows how to pump, process and sell it. Would it be unreasonable for you to tell Shell, Enron, British Petroleum or another corporate suitor that you want a 50-50 split, straight out of the ground?

That is what Bolivia had before its failed privatization moves in the 1990s and that is what most Bolivians want back. I say again as well, Mesa knows better. He knows the calls from companies that they'll walk if they don't get what they want are cries of wolf. I quoted him in my last Blog in which he called it, "the great alibi." His own special minister for gas handed me a report when I met with him showing that, under the current scheme, Bolivia's share of oil profits is among the lowest in the world among oil producing countries.

Fifty-fifty at the mouth of the well. It is a reasonable demand and the sooner Bolivia gets there the sooner the country will escape a political meltdown. Foreign companies like to talk about the importance of stable investment environments and rightly so. Who wants to invest big dollars in a country where the government changes hands along with the seasons? What they need to see now is how they are the chief reason Bolivia is headed in that direction.

Help Wanted: President for Latin American Country

As of now it seems like Bolivia will soon have a new President, but no one knows who.

President Carlos Mesa added a new demand this week to his staying in office, new elections for the Congress and Presidency by August of this year – two years early. Rejection of that demand by the Congress seems to be the one thing that has unified every major political party in the country. So now Carlos Mesa says that if the Congress doesn’t go along he will resign (as he has been threatening to do off and on for nearly two weeks).

Even his harshest critics have called on Mesa to stay. But it doesn’t take a rocket scientist at this point to figure out that the man does not want to be President any more and that Bolivia will more than likely have a new President by this time next week.

But who?

The Bolivian Constitution lays out clear rules for succession but its practical politics that will drive events. First in line is Senate President Hormando Vaca Diez, a man with now constituency of any kind and plenty of opponents. Last week he announced he wouldn’t assume the Presidency if Mesa left, now his intent is less clear. Movement Toward Socialism leader, Evo Morales, spelled out the position of the Bolivian left pretty clearly, “Hormando won’t last 24 hours.”

Next in line is the President of the House of Representatives, Mario Cossio. His intentions and public reaction to him assuming the red, yellow and green sash is unclear at this point. Third in line, if the other two either don’t accept or are forced out is the President of the nation’s Supreme Court, in which case the Constitution would also require early elections.

It is all starting to look like George McGovern looking for a running mate in 1972. Heck, at this point even I have a shot at becoming President. If it weren’t such a sad turn of events for the nation it would be almost comical. It is also a worrisome repeat of history and Bolivia’s once-famous reputation for revolving door Presidents. From 1978 to 1982, Bolivia had nine different Presidents – some elected, some brutal dictators. We’re not there yet, but if Mesa leaves next week Bolivia will be on its fifth President since 2001.

I was in the room with some of the country’s main social movement leaders that night in October 2003 as we all watched Mesa accept the Presidency on national television, as a split screen showed his predecssor's flying off to exile in the US. There was such hope that night. Mesa seemed to be a real leader – smart, articulate, principled, independent. The guy even had the guts to make an unannounced appearance the next day before a multitude of protesters in La Paz, those who had tossed out Sànchez de Lozada the day before, asking for their support.

He was a man who always wanted to study the Presidency but it seems really did not want to occupy it. History should have told him that few Presidents, here or anywhere, get everything they want. Telling the country – “Do what I say or I leave.” – is probably not the legacy he wished for but it looks certain now that it will be the one he earns.

Bolivia’s Uprisings: “It’s the Oil Stupid”

Here’s the latest.

President Carlos Mesa – who threw Bolivia into a political crisis ten days ago with a threat to resign and then decided not to – has come up with a new strategy to escape the Presidency early. He has proposed that national elections be moved up by two years. He wants Bolivia to elect a new President and a new Congress next August instead of in 2007.

Mind you, this isn’t England where that dates for national elections float and get set by the party in power to their best political advantage. In Bolivia, like the US, election dates are set by the Constitution.

Carlos Mesa, one of the nation’s foremost historians on the Presidency, is starting to look like a man looking for an escape hatch as soon as possible.

To be sure, Mesa is in an almost impossible political spot, with pressures coming from his right, his left, and from the powers of multinational corporations, the US Government, the IMF and the World Bank. But he did sign up for the job. He did present himself to the nation as former President Sànchez de Lozada’s running mate and it didn’t take much intelligence to predict that the five-year term would be rough. A leader who once held great respect even among his political adversaries is starting to look, well, sort of flaky.

For now, the Bolivian Congress seems reluctant to approve Mesa’s “get me outta here quick” plan, for both reasons of sober constitutional concern and partisan self-interest.

Let’s not lose sight of the real issue here, however. To borrow a phrase – “It’s About the Oil Stupid”.

Why did the elites of Santa Cruz spark a regional rebellion for political autonomy? Why are the current confrontations between that nation’s right, left, and center so heated that the government itself rests on a precipice? Why is Bolivia in a state of nearly perpetual conflict?

It is all about oil and it nothing unique to Bolivia. Nearly every poor nation on the globe that finds itself wealthy in mineral resources also finds itself in a state of political conflict. In the more extreme cases that means civil war. When you have something of real value to fight about, you start to fight. I wrote about this recently in my report on international oil and gas issues published by the Soros Foundation.

Bolivia sits on a vast treasure of gas and oil. Social movements want to assure that the profits are shared equitably. International oil companies want to pay as little as possible. Bolivia’s oil-wealthy regions want as much control (and local profit) as possible. President Carlos Mesa is stuck in the middle and starting to look weaker and weaker.

Mesa is also starting to look more and more like a President happy to dance to the tune of foreign oil companies, even though he knows better. His tax plan is full of loopholes which will end up getting Bolivia far les than the 50% of all profits that social movements are demanding and that used to be the system here before privatization (see my Blog entry from March 10th).

Foreign companies are singing that old familiar song, tax us more and we will leave the country. Mesa knows there is a lot of crying wolf going on. Here is what he told me when I interviewed him about the issue when he was still Vice President:

The great alibi, the great argument of the multinational corporations is legal security. The moment that you change your tax rules you are changing the rules of the game that establish the possibility that those companies will come and invest in Bolivia. With another set of rules that isn’t predictable, they say, “We wouldn’t have risked coming here. This would demonstrate tat this isn’t a serious country and would send a signal – Don’t come and invest in Bolivia because they say one thing and do another.

As anyone who has ever taken Economics 101 knows, how much you can charge a company in taxes before they decide it is not worth their investment is not an ideological question, it is a math problem. The companies want a complex taxing system that only a half dozen people in the nation will understand and that will end up passing off taxes to Bolivian consumers and coming up well short of a real 50/50 split.

Are social movements here misguided in taking such an extreme stand in their demand for a gas bill that delivers a real 50/50 instead of a fake one? I don’t think so. The long-term sale of gas and oil is critical to Bolivia’s future and people know it. Do I wish that the social movements could find a less-destructive way to press their demand than blocking roads and letting millions of dollars in crops rot in transit? Yes I do, but what that would be that would actually have power is unclear.

Is Bolivia politically unstable right now? Very much so. But keep in mind that political instability is often the road from one kind of stability to another. The US was nostalgically stable in the 1950s, based of course on racial segregation, grossly unequal treatment of women and little questioning of corporate practices. Bolivia’s relative political stability in the 1990s was based on a small and wealthy elite controlling the future of a large majority of poor. Starting with the water revolt in 2000, Bolivia has been renegotiating that power relationship issue-by-issue, uprising-by-uprising. The end game is afoot on gas and the road ahead is unclear.

Bolivia and the President Who Threatened to Leave -- An Analysis

Bolivia has been back in the world´s eyes this week as the result of President Carlos Mesa´s dramatic Sunday night threat to resign. There has been a fait amount of international press and a flurry of email traffic among Bolivia watchers. Here is my analysis.

First, why now?

The timing is not a coincidence. Bolivian politics is at en and game on two important national issues, both of which are deeply entwined with the politics of globalization -- the return of the El Alto-La Paz water system to public hands and the new national law dictating the terms for development of Bolivian gas exports.

On the El Alto-La Paz water issue. We have written on this extensively and links to our articles are included in my last Blog. The bottom line is that the people of El Alto demanded the return of their water to public hands, staged huge but peaceful civic actions to press that demand, and received a clear assurance from President Mesa that the company´s privatization would be reversed. Then Mesa got hit with a load of bricks from international donor agencies and foreign]governments and tried to weasel his way out of his proclamations. Would any reasonable person really expect the community to not be pissed and to not react with renewed protest?

On the gas issue, one The Democracy Center has studied extensively and one I spoke with Mesa about directly. Before privatization of the nation´s gas industry in the 1990s (under commands to do so from the IMF and World Bank) Bolivia split the product of its gas fields 50/50 with the foreign companies involved. Revenue from gas and oil constituted nearly 40% of all national government revenue.

Then the IMF, the Bank and the foreign companies sold Bolivia (or forced it) to take a hugely risky economic bet -- cut the government´s take down to 18%, up the companies´take accordingly and they will be so pumped up (pardon the pun) to increase production that even though the Bolivian slice of the pie will be much smaller, the net profit for the government will be more.

Now the facts --- the government´s net revenue went down, not up, even as increased production steadily drained at a nonrenewable resource at a faster rate. Bolivia ended up with higher budget deficits and then came under criticism from the IMF for those deficits.

Fast forward to 2005. The Bolivian Congress and President Mesa are at the end of the process to hammer out a new agreement on gas economics and the social movements want a return to 50/50 with the foreign companies, not exactly a radical demand. Guess who is opposed to that. In a corner, Mesa is aiming closer to 38% for the government.

What does all this mean now?

Backed into their own corner the country´s social movements have resorted to the tactics they always use, economic disruption -- road blockades, general strikes and the like. Unlike past Bolivian Presidents Mesa has refused to respond with the bullet, to his credit. So we end up with a stalemate and Sunday night Mesa essentially said, I can´t govern this way,something has to give or I walk.

Did he mean it, probably not. It was more likely a negotiating tactic to provoke an expression of support for him. It is also hard to blame him for using that tactic, but easily to blame him for cowing to the international players. In contrast Argentina´s government recently said it would consider paying off its foreign debtors at 30 cents on the dollar. It is possible to demonstrate some ¨cojones¨with the players abroad, Mesa seems to lack them.

The social movements are in their own jam. I think most Bolivians back them on their demands on water and oil and gas, but the public is clearly very tired of the left´s tactics. This is not the Cochabamba water war where the public not only backed a citywide general strike but joined in on it. Taxi drivers, bus drivers, regular people lose a day´s wages when social movement tactics aim to shut down the economy and people are tired of it.

It is like the old saying, ¨When you have a hammer, everything starts to look like nail.¨ Unfortunately, for the social movements, every political battle has started to seem like another moment to block roads and disrupt the country and their are losing their broader base as a result.

Carlos Mesa this week has managed to collect a large part of that base, with public rallies coming to his side. Sadly, he seems intent to use that support to strengthen his connections with the traditional political parties who set the steady robbing of Bolivia in motion, in alliance with the¨policies of the World Bank and IMF. Bolivia seems headed toward a form of Goni-light¨, all the same economic policies without the army repression -- for now.

The challenge now is for the social movements to articulate their economic demands in clear language and to make the case for why Bolivia needs a direction different one than the one demanded by the Bank and IMF. That is the easy part. The movements then need to devise a set of pressure tactics that can have a real effect without disrupting people´s daily ability to go out and make their small earnings.

That is Bolivia tonight. It is not the meltdown that some thought might come in the aftermath the President´s announcement Sunday night, but it is a turn in a more conservative direction in the country´s politics, and not one with great promise for increased justice and equality.

President Mesa Offers his Resignation

Last night President Carlos Mesa announced that he is submitting his resignation to Congress. No question, this is the most serious development in Bolivia since Goni´s resignation in October 2003.

First question, is Mesa leaving or is this a political ploy (a reasonable one) to call all sectors of Bolivian politics toward compromise? Rallies in support of Mesa have broken out in various cities throughout the country. Mesa does have a good deal of support, whgich has been largely silent during the past few months.

Second question, if Mesa does leave, what next? The answer to that one is not good. His constitutional successor is the President of the Senate, Vaca Diez, who has been quoted in the press in Bolivia for weeks calling on Mesa ¨to govern¨, shorthand for repression.

I like Carlos Mesa. I may not agree with him on everything but he is as honest a leader as Bolivia can hope for right now.

More later today as the story develops.

El Alto´s Uprising Over Water

El Alto, the poor and sprawling city above Bolivia´s capital of La Paz, is on the march again in its efforts to remove, fully and finally, the French water giant Suez. Here´s a quick take on what is going on.

In December the neighborhood groups of El Alto announced their demand that their water system, privatized in 1997 under pressure from the World Bank, be returned to public hands. The private contract excluded tens of thousands of families from any hope of getting water and sewage service to their homes.

In January, following two days of protests and a peaceful citywide general strike, Bolivian President Carlos Mesa issued a proclamation declaring that the contract with Suez was being cancelled and that a process would begin to form a new public company.

The Democracy Center was the first to write about the story, back in December, followed by later coverage by the Miami Herald, New York Times and others. Here´s our original reporting on the story.

This week is the second chapter in the effort by the people of El Alto to take back their water. Suez officials signaled from the start that, despite declarations from the Bolivian government, they had no interest in going quietly. Suez declared that funds granted to the company by international donors would be treated as Suez assets. They talked publicly of demanding expensive compensation. News reports suggested that President Mesa received a phone call over the issue from French President Chirac. Officials at foreign embassies spoke privately that is was time to teach Bolivians a lesson about the power of contracts and the cost of breaking them.

In meetings with the neighborhood groups, Suez floated the idea of staying engaged in the local water company as an investor, a proposal soundly rejected by a community that had come to mistrust Suez deeply. It turns out that the Bolivian government has been talking with Suez in private about exactly that option and put the public/private model squarely in the table in negotiations over how to form a new water company.

Suez claimed all along that the uprisings in El Alto were never broadly supported and instead were the actions of a few radicals in the neighborhood groups. The Mesa government apparently took the same bet.

This week it became evident that Suez´s doubts about widespread opposition to it were a bad bet. Over the course of the past few days thousands upon thousands of people have taken to the streets, backing the demand for Suez´s complete ouster. Here´s a good article (in Spanish) from today´s La Prensa in La Paz which includes a photo of the protests. Police actions against the protesters have resulted in injuries, included one elderly woman hospitalized after being hit with a tear gas canister.

Will the company and the government never learn that ¨No¨means ¨No¨? Suez can disagree with the negative view of it held by the people they were supposed to serve. The government can question the wisdom of kicking out a foreign company. But they should not question that that ouster is indeed the public´s demand.

As I wrote in The Nation last month, water privatization forced on a people is a policy doomed from the start. It should be no surprise now that such an opposition has emerged.

¨Legal security¨has become the new rallying cry toward Bolivia from foreign investors. On one side, they have a valid point. Investors need to know that agreements worked out in a contract are reliable agreements. On the other hand, all too often, corporations have worked out these deals behind closed doors with government officials who had neither the compentency or the integrity to cut a deal in the public´s interest.

The implicit understanding between corporations has been -- don´t worry, if the people don´t like it we have an army. That didn´t work in Cochabamba five years ago, but one dead teenager and more than a hundred wounded paid the price. The Mesa government and Suez had both better know that the bullet won´t work this time either, for anything other than putting blood on their hands.

Here´s how to contact Suez´s CEO in France. Drop him a note and tell him that it has come time to say Bonjour Bolivia:

Mr. Gérard Mestrallet
CEO, Suez Corporation
gerard.mestrallet@suez.com

U.S. Threatens Bolivia in Effort to Secure Criminal Court Immunity

Today the Pacific News Service published an article that I co-wrote with Luis Bredow, a veteran Bolivian journalist. The article looks at the efforts of the US to pressure Bolivia to adopt an immunity pact shielding US soldiers and officials from prosecution before the International Criminal Court.

The article includes an interview that I did with the US Embassy and a look at similar US efforts around the world.

Here is the link and the lead. Take a look if you are interested.

U.S. Threatens Bolivia in Effort to Secure Criminal Court Immunity

The U.S. government is demanding that the Bolivian Congress approve an agreement that would grant immunity to U.S. troops and officials accused of human rights violations, exempting them from prosecution by the International Criminal Court. That effort, which includes a threat to withhold financial aid and access to free trade, seems to be backfiring.

Bolivia is one of 139 nations that have signed the Treaty of Rome, which set up the International Criminal Court (ICC) in 1998. A respected Bolivian judge, Renee Blattmann, also sits as a member of the court. The treaty's goal, according to its Preamble, "is to establish an independent permanent International Criminal Court with jurisdiction over the most serious crimes of concern to the international community as a whole."

Brazilian Optimism

Rio de Janeiro, Brazil

I´ve spent the past three days in one meeting after another with leaders of Brazilian citizen groups. Finally, I put my finger on what it is I keep picking up from them -- optimism.

That certainly is not what I pick up from progressive activists in the US these days, still reeling from the challenges of a second Bush administration. It isn´t what I pick up from progressive activists in Bolivia either, where economic and political crises keep jumping out from behind trees unannounced.

Brazil has one of the most progressive governments in the world these days, led by Lula, the factory worker turned four-time Labor Party candidate, turned President. Like all leaders, you hear more about the imperfections here up close than you do abroad, but there is still little question that Lula and what he represents is the most hopeful example in the Americas.

Some like the swagger of Chavez in Venezuela, but ignore the authoritarian instincts that are evident in his governance as well. He is also a one man show. Lula is the visible face of a movement that has been building here for years and will survive long after Lula leaves office.

I am looking at how citizens carry out advocacy on budgets here, part of a global study I am involved with. In other countries citizen budget work is about quick, targeted campaigns to get more money for one slice of the pie or another. Here in Brazil people talk about real democracy building and they mean it.

Citizens in Brazil can take a course in public budgets on line for free. They are invited to participate in workshops, engage with their governments. This country that has moved in two decades from dictatorship to sponsorship of the World Social Forum takes democracy building seriously.

I have seen optimism in activists´eyes before, in California , in Cochabamba, and elsewhere around the world but Brazilian optimism, likes Samba, seems built to last.

And today, the most progressive, pro-people government in the hemisphere announced economic growth at 5.5%. I´d like to see George Bush match that!