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Bolivia's Election Hangover Looks Likely to Linger

5 MINS READNov 7, 2019 | 10:00 GMT
A demonstrator throws a tear gas canister during a demonstration against Bolivian President Evo Morales on Nov. 5, 2019, in La Paz, Bolivia.

A demonstrator throws a tear gas canister during a demonstration against Bolivian President Evo Morales on Nov. 5, 2019, in La Paz, Bolivia.

(Gaton Brito/picture alliance via Getty Images)
Highlights
  • Clashes have gripped the streets of Bolivia's cities, including the capital of La Paz and Santa Cruz, the country's commercial center.
  • The dispute risks further dividing the country between the pro-Morales highlands and pro-opposition lowlands.
  • Ongoing political uncertainty and protests over Bolivia's recent presidential election could limit the country's ability to exploit its abundant natural resources.

Editor's Note: ­This security-focused assessment is one of many such analyses found at Stratfor Threat Lens, a unique protective intelligence product designed with corporate security leaders in mind. Threat Lens enables industry professionals and organizations to anticipate, identify, measure and mitigate emerging threats to people, assets and intellectual property the world over. Threat Lens is the only unified solution that analyzes and forecasts security risk from a holistic perspective, bringing all the most relevant global insights into a single, interactive threat dashboard. This assessment also includes information originally published on Stratfor Worldview. 

Unrest stemming from Bolivia's disputed presidential election continues to escalate, threatening to worsen the country's political divide and economic woes. Opposition to Bolivian President Evo Morales, who has held office since 2006, has been building steadily since 2017, when he used the South American country's constitutional court to abolish term limits. Now, Luis Fernando Camacho, the leader of the Civic Committee of Santa Cruz, has called on the opposition to "paralyze" the country through an indefinite national strike and blockade of the country's borders on Nov. 4. The call came after Morales defied Camacho's demand that he resign within 48 hours. 

A Controversial Vote

Morales reputedly won his fourth term on Oct. 20 with a 10-percentage point margin over second-place finisher Carlos Mesa of the Civic Community party. Controversy has marred the vote, and all parties have agreed to an audit by the Organization of American States. The dispute has led to periodic protests and clashes in the streets of Bolivia's cities, including the capital of La Paz and Santa Cruz, the country's commercial center. Protests for and against Morales have closed roads, the two camps have clashed violently, and police have used tear gas to disperse crowds. Despite police intervention, crowds of Morales supporters trapped Camacho at the La Paz airport on Nov. 5 until he agreed to return to Santa Cruz.
 
Morales retains significant sway over the country's pillars of power, including the presidency. The security services and the leadership of the majority party in the National Congress remain loyal, and he also has the support of a plurality of the population. Camacho's call for the Civic Committee of Santa Cruz to protest is still, however, significant. The committee consists of over 200 businesses, associations and civic groups that wield significant economic and political power. A sustained strike and blockade by it and other groups, such as the National Committee for the Defense of Democracy, to oust Morales could escalate the protests and violence. The odds the opposition will succeed in removing Morales remain unclear, but Latin American media widely regard the Santa Cruz committee as extremely influential among the middle class and business community, indicating it could cause significant disruptions. Morales himself asked his supporters to stage general strikes on Oct. 22, before backing off to avoid the risk of dueling national walkouts.

Though foreign companies haven't been targeted yet, they could eventually attract unwanted attention. 

The protests also risk worsening Bolivia's highland-lowland divide. Morales remains popular in the highlands and major cities. In lowlander communities such as Santa Cruz, the opposition holds greater sway. Regional and ethnic differences in the protest camps could extend the length of the demonstrations.

The Impact on Business

For travelers and companies, the protests and potential for clashes in major cities and at critical transit points mean greater risk. Travelers could see their plans disrupted because demonstrations have broken out near major Western hotel chains in La Paz. Though foreign companies haven't been targeted, they could eventually attract unwanted attention from protesters. 

As a left-wing populist, Morales has often blamed foreign governments and companies for his nation's ills. Companies could also be singled out for other reasons, including their perceived support for one of the parties in the dispute, misunderstandings about their business activities and opportunistic looting. Ongoing political uncertainty and protests over Bolivia's recent presidential election could also limit the country's ability to exploit its abundant natural resources.

Deutsche Welle reported Nov. 4 that Morales' government canceled a joint venture with Germany's ACI Systems to construct a lithium processing plant and battery factory amid a dispute over royalties and in part in response to indigenous opposition to the operation. The proposed joint venture had attracted criticism from locals demanding the government extract greater royalties from participating companies. Bolivia's Uyuni salt flat is estimated to hold roughly 70 percent of the world's lithium reserves, a critical component for the production of batteries. The cancellation of the joint venture is a notable setback for Bolivia's strategy to establish its lithium operations and compete with other global producers, such as Argentina, Chile, Australia, China and the United States. 
 
The threat of heavy state intervention in the economy, and the potential for the nationalization of business assets, will remain as long as Morales stays in office. Bolivia has toned down its previous rhetoric on nationalization, but its description of lithium as a strategic natural resource suggests that it could consider assuming control of its reserves once production picks up and the metal fetches better prices. If that happens, lithium producers might cast a wary eye back at 2006, when Morales nationalized the Bolivian assets of major oil companies such as Petroleo Brasileiro and Repsol.

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