Bolivia: reactionary revolt of the mining cooperatives

As the crisis of overproduction deepens and commodity prices fall, a battle is going on for control of Bolivia’s mineral resources.

On 25 August 2016, a Bolivian government vice minister of the interior, Rodolfo Illanes, who was also a law professor, was stoned to death by a mob engaged in a dispute with the government over the terms on which mines are allowed to operate. He had been sent to the area to try to negotiate with the leaders of the disturbances, which involved blocking roads to paralyse the country’s economic activity, but instead he was brutally murdered.

The people who organised the anti-government protest – which was violent from the start, with rocks and sticks of dynamite being hurled at the police – were not the oppressed and exploited, but were essentially newly-emerged capitalists, who had become rich in the mining cooperative movement.

Although the mining cooperatives have in elections to date always backed the Movimiento al Socialismo (MAS), the party to which President Evo Morales belongs, their relationship with the government has always been tense and has been maintained only through the considerable concessions that the government makes towards them, such as absolving them from paying tax and not requiring them to observe the labour law – including permitting them to ban unionisation of their hired labour.

The government has also assisted in providing them with modern machinery. However, as a result of the world crisis of overproduction their profits have fallen – a situation that they expect the government to make good.

Economic background to the dispute

Since the MAS government took power in 2006, it has made significant strides forward in improving the lot of the working people of Bolivia, despite the intervening world economic crisis. It has done this principally by reducing imperialist exploitation, expropriating property that is lying idle, and using the wealth gained to improve people’s living standards – especially by investing in infrastructure, health and education.

It is recognised that, under Morales, average annual per capita income has risen from $873 to $3,119 and extreme poverty has declined from 38.2 percent in 2006 to 16.8 percent today. A recent World Bank report confirmed that Bolivia is a world leader in terms of revenue growth for the poorest 40 percent of its population.

Nevertheless, the collapse of world commodity prices presents a challenge not only to the extractive industries but also to the government of the country, which derives a considerable amount of its income from them. Although they represent only about 17 percent of GDP, hydrocarbons and minerals make up 72 percent of Bolivia’s export products (hydrocarbons 45 percent and minerals 27 percent of total exports). It is obvious that, in order to maintain its commitment to continued improvement of the lives of the Bolivian masses, the Bolivian government must find ways to maintain and increase its income in the face of difficult conditions.

The basis of the contradiction between the Bolivian government and the somewhat pampered mining cooperatives is therefore self-evident. What is true, however, is that a nationalist and patriotic government such as that of Morales offers the cooperative movement far better prospects than any alternative, and that as a result the contradiction is not by its nature antagonistic. Still, there are plenty of unpatriotic comprador and/or feudalistic elements around, who are making it their business to foster resentment and make the contradiction antagonistic in the hope that this will help restore the kind of comprador government that will prioritise their interests at the expense of the mass of the Bolivian people.

Before the MAS government took power, the richest 10 percent of the population had 128 times the wealth of the poorest 10 percent, but by last year this gap had been reduced to 37 times. This is not an achievement that is to the liking of the rich, however, who can, of course, count on the support of US imperialism, desperate to intensify its own exploitation of the country.

In particular, it is known that US imperialism has earmarked considerable resources towards mobilising public opinion in Bolivia for a future electoral defeat of the Morales government. Indeed, it was successful in February this year in defeating a proposal for constitutional change, put to a popular referendum, that would have allowed Evo Morales to stand for a third term in office.

Over the past eight years, the US government’s ‘National Endowment for Democracy’ (one its prime instruments for manipulating world politics in US imperialist interests) has funded about 40 institutions in Bolivia, including economic and social centres, foundations and non-governmental organisations, to the tune of more than $10m, while last year, the US produced its ‘Strategic Plan for Bolivia’ aimed at restoring imperialist sway over that country. This plan requires, first and foremost of course, the removal of the MAS government.

Bolivia’s mining cooperatives

Currently, mineral mines in Bolivia are divided between the private sector (which operates 70 percent of them), the cooperative sector (operating 22 percent) and the state sector (8 percent). The first set of cooperative mines were formed in 1952, when a new government headed by the Nationalist Revolutionary Movement nationalised the biggest mines, but turned others over to the workers to extract whatever livelihood they could from them. The exercise was repeated in 1985 when most of the state sector closed down and the least profitable mines were offered to their workers to operate as cooperatives while the others were sold into private hands.

By dint of ignoring safety regulations, mobilising child labour and operating under the most backbreaking conditions, the cooperative owners of these mines managed to eke out a living. When commodity prices surged in the world market, however, as China and the other Brics countries created an unprecedented demand for minerals, some cooperative owners became rich, and those operating the cooperative mines – who were originally co-owners – have divided into exploiter and exploited classes.

Today, only some 5 percent of cooperative miners remain owners, the remaining 95 percent being relegated to the status of hired labour, which, for historic reasons, lacks the labour protection rights that have now spread to most other workers in Bolivia. If the market forces from which cooperative owners seek protection force the mines to close, these workers would immediately be pauperised – and this is the basis of their support for their bosses’ demands for continued and increased government support.

The cooperative owners’ demands

Interestingly, the present dispute arose on 10 August without there having been any proposal at all on the part of the government that affected the cooperative mining sector. What it had proposed was to extend employment protection rights, including the right to strike, to the whole of the cooperative service sector – which clearly does not include the mines.

Nevertheless, the cooperative miners’ organisation, Fencomin (Federación Nacional de Cooperativas Mineras), to which some 45,000 cooperative miners belong, including of course the mine owners, decided to mobilise en masse against this law. Since the workers in the service sector (electricity and gas, water and telecommunications) cooperatives all supported the proposal, the action was taken effectively in support of the member-owners of the cooperatives, not their workers.

It was only after they had already mobilised that Fencomin brought out its list of demands – originally 10 and then increased to 14. Prominent among these demands are:

– No to unionisation of the workforce (which hadn’t even been suggested at that stage)

– The loosening of environmental controls

– Allowing the cooperatives to make their own arrangements for outside investment without government control

– Subsidised supply of electricity.

On 23 August, Fencomin started to implement roadblocks that left thousands of travellers stranded in an effort to force the government to accede to its demands. This mobilisation was violent from the start, with the miners being armed with sticks of dynamite and laying traps to blow up police vehicles. At one point, some 40 policemen were taken hostage and beaten up before being released.

Although the government had decreed that the police facing the miners should not be armed, it is perhaps understandable that, in view of the violence they were facing, this order was ignored by some. This led on 24 August to the fatal shooting of two miners, which will in turn have further inflamed the passions of the others. Nevertheless, the murder of the unarmed and defenceless peace negotiator from the government caused such revulsion among the miners themselves that their protest was very quickly abandoned altogether.

Government backlash

The government has lost no time in bringing forward proposals that will give protection to proletarian and genuinely cooperative miners, but will clip the wings of the cooperative profiteers. According to Xinhuaof 2 September 2016: “Several decrees were agreed during an emergency cabinet meeting on Thursday [1 September] …

“The decrees called for the state to take back control of areas and concessions subleased to private companies [national and international], and, according to the government, there are 31 such contracts …

“The state will also take control of sites that are not producing, he said …

“A third decree calls for regular auditing of the mining cooperatives, which will have to report annually on how many members they have, and the volume and value of their output.

“‘The goal,’ said Navarro, ‘is to identify the legitimate cooperatives from those that are merely companies (that) exploit men.’

“In addition, the government announced labour protections for salaried miners, and banned the possession of dynamite and other explosives during strikes or protests.” (Bolivia unveils stricter regulation of mining cooperatives)

This will enable the state to take over any mines that the cooperative owners close down, so that their hired workers are not left high and dry. It will also enable the state to clamp down on what has been a lucrative business for cooperative owners of ‘partnering’ with private companies in order to enable the latter to enjoy the cooperatives’ tax immunity.

As Alfredo Rada Vélez, vice-minister of coordination with the social movements, has explained: “Today the government, by acting without hesitation, has sent a clear message to the worker base of the cooperatives: we are a government of the workers and will no longer tolerate abuses and exploitation within the mining cooperatives. Equally clear is the message to the employers’ leadership: we are a government that defends the sovereignty of the Bolivian people over mineral resources and we will not permit their privatisation or subjection to foreign ownership.” (Quoted in Bolivia’s government sides with workers in conflict with bosses in mining cooperatives by Richard Fidler, Links International Journal of Socialist Renewal, 10 September 2016)

Capitalist production cannot solve the people’s problems

It is only too likely that the cooperative owners will do everything in their power to restore their offensive against the Morales government, and that in doing so they will receive the enthusiastic and munificent support of imperialism. However, the MAS government has proved that it is no walkover, but is able to counter with pragmatic and intelligent responses, relying above all on the downtrodden proletarian masses of Bolivia, whose interests it genuinely seeks to represent.

However, to escape the noose of the world crisis of overproduction, it is essential to reduce market relations to a minimum by establishing a socialist economy based on state planning for the maximum benefit of the masses. It is very clear in Bolivia that market relations leave the country in extreme difficulty when crisis causes a reduction in the world price of commodities, making it almost impossible for the government to continue to implement measures that improve people’s living standards, including investment in the mines.

In the last great depression of the 1930s, the Soviet Union was the only country that escaped unscathed and able to continue growing its economy and the wellbeing of its people, precisely because it had substituted planning for the anarchy of the market.