Travel Reference
In-Depth Information
ECONOMIC REFORMS
OVERSHADOWED
The early '90s were characterized by political apathy, party politics, and the struggle
between
capitalización
(the opening of state companies to international investment) and
populist models. The free market won with the election of Gonzalo 'Goni' Sánchez de Loz-
ada, the MNR leader who had played a key role in the curtailing of inflation through 'shock
therapy' during the Estenssoro government.
Economic reforms saw state-owned compan-
ies and mining interests open up to overseas in-
vestment in the hope that that privatization
would bring stability and make the enterprises
profitable. Overseas investors were offered 49%
equity, total voting control, license to operate in
Bolivia and up to 49% of the profits. The re-
maining 51% of the shares were distributed to
Bolivians as pensions and through Participación Popular, a program meant to channel
spending away from the cities and into rural schools, clinics and other local infrastructure.
In late 1995 reform issues were overshadowed by violence and unrest surrounding US-
directed coca eradication in the Chapare. In the late '90s the government faced swelling
public discontent with the coca eradication measures and protests in response to increasing
gas prices, a serious water shortage and economic downturn in the department of
Cochabamba.
Want to know more about Bolivia's history, taking
into account the effects of geography, economy,
policy and more? Check out the dense but incisive
A Concise History of Bolivia
(2011) by Herbert S
Klein.
Following a successful campaign advised by
a team of US political consultants that he hired,
Goni was again appointed president in August
2002. The following year his economic policies
were met with widespread demonstrations
which resulted in the loss of 67 lives during a
police lockdown in La Paz. In October 2003,
Goni resigned amid massive popular protests
and fled to the US. He currently faces charges
related to the deaths during the demonstrations,
both in the US and Bolivia, and a formal extradition process is underway.
Protests, rising fuel prices and continued unrest pushed Goni's successor, Carlos Mesa,
to resign in 2005.
COCA
About 1.2 million kilos of coca leaf are consumed
monthly in Bolivia, leading Evo Morales to declare
it an intrinsic part of Bolivia's heri- tage in the new
constitution. Millions have been invested in altern-
ative uses for coca.
