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Bolivia: Happy Days Are Here (Again) for Evo Morales


Evo Morales, leader of the Movement towards Socialism (MAS) was the clear winner in the first round of presidential elections held on October 12. Morales, aged 54, who has been in office since 2006, garnered more than 60% of the votes cast, and so will not need a runoff. More than six million Bolivians were eligible to vote, in a country where voting is obligatory.

EvoThe other candidates trailed far behind, with only businessman Samuel Doria Medina receiving a creditable 25%. Neither former president Jorge Quiroga, not former La Paz mayor Juan del Granado or indigenous leader Fernando Vargas were able to mount a serious challenge. Morales will also be able to count on a solid majority in the new Congress, which could enable him to bring in further constitutional changes.

“Winning elections is easy”, Morales recently said in an interview with the Spanish newspaper El País. Elected in 2005 with 54 percent and in 2009 with 64 percent, Evo Morales will become the longest-serving Bolivian president in office. What is the key to his success?

Nationalization of Hydrocarbons

One of the first decisions of Evo Morales when he arrived in the Palacio Quemado was to nationalize parts of the oil and gas sector in Bolivia, which possesses large hydrocarbon reserves, especially of natural gas. The Morales government did not expel foreign companies, but renegotiated conditions, allowing the Bolivian state to keep a larger share of the profits as well as receiving more tax revenues. Evo Morales himself explains this situation as “a long struggle against internal and external colonialism, against the neoliberal model”.

According to analyst Fernando Molina told Infolatam, “the decision yielded two important benefits: it did not keep foreign private investments away, and it has brought in significant resources to the State (thanks also to high commodity prices) which it could use to boost social policies which, in turn, has led to renewed support for the president”, 

Economic growth

During Morales’ first two terms in office, high gas prices boosted the Bolivian economy, which grew at an average of nearly 5 percent between 2005 and 2013. Bolivia’s per capita GDP doubled from $1,182 USD in 2006 to $2,238 USD in 2012, according to the Council on Hemispheric Affairs (COHA). It has large financial reserves, with the government running a budget surplus each year. The economic success has been such that both the IMF and the World Bank have congratulated the Bolivian government for its good work.

Despite this long period of sustained economic growth, some experts have warned about over-dependence on commodities. For this reason, a second focus of the Morales’ administrations has been to boost Bolivia’s industrial capacity, focusing on natural gas and the petrochemical industry. The newly re-elected president also recently announced ambitious plans to build the Andean country’s first nuclear reactor to secure energy supplies in the future. 

Poverty reduction

The economic growth also allowed Morales to raise the minimum wage 20 percent in May 2014. Since 2005, the Bolivian government has raised it from 440 bolivianos (around $65 USD) to 1,440 bolivianos (around $210 USD).

The government has also redistributed national income through transfers, via bonds and social programmes, to mothers, old people and children. When Morales arrived in Palacio the Quemado, Bolivia had a poverty rate of 38.2 percent; according to recent UN figures, this has been reduced by 20 percent.

“If the bonds are aimed at poor people, people who have fewer resources; they certainly help, as those people have more purchasing power than if they did not have those bonds”, said  analyst and former president of Bolivia Central Bank Armando Méndez.

Morales has also been keen to give the indigenous Aymara and Quechua-speaking peoples, who make up the majority of Bolivia’s population, an increasing say in society.  Although some of the indigenous organizations feel that the president has not done enough to stamp out inequality, in the main they continue to support him. However, the flare-up of discontent in 2011 among Aymara inhabitants of the city of El Alto above La Paz have shown that in his third term, President Morales will need to continue to listen to their demands.

Rapprochement between Evo and the entrepreneurs

Morales’ success not only includes the indigenous peoples, and the lower and middle classes but  has also won converts among the upper classes and business leaders. Whereas in 2008 the lowland eastern regions were pushing for independence, in the runup to the most recent elections, many agreed with Luis Barbery, president of COINCA, Bolivia’s main business and trade association, who told COHA that ‘this is a great moment for Bolivia. We have a new understanding with the government.’

‘There is a sort of mutual accommodation of interests between government and businessmen, in which both win: entrepreneurs protect themselves and can benefit from the resources of the government, and the government wins because it dislocates the opposition and facilitates the conquest of Santa Cruz’, Bolivian analyst Jorge Lazarte told La Tercera newspaper.

President Morales therefore begins his third five-year term in a strong position. His biggest challenge is likely to come from an end to the recent boom in commodity prices, which will test his government’s resolve to keep spending under control, or from discontent among the indigenous groups who feel he is no longer looking after their interests

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