Bolivia's National Palace is a classic colonial building that sits on the pigeon-filled Plaza Murillo in downtown La Paz. It's more often called the "Palacio Quemado" or "Burned Palace" because it's been set on fire repeatedly by dissidents of one stripe or another over the centuries since Bolivia gained its fragile independence. Today, painted a cheery yellow, it stands as a reminder of a conflictive past and a fresh future.

During the colonial period the Spanish exploited the country's mineral wealth without mercy, leading to the death of hundreds of thousands of indigenous mineworkers and uprisings that punctuated the nation's history with blood and legends. Between forced labor, the war of independence, and European diseases, the new nation began its life as a republic rich in natural resources but with a decimated populace. In the words of an historian in 1831, Bolivia was like "a beggar seated on a throne of gold."

In many ways, the nation's predicament changed little over the two centuries of republican life. The indigenous population, if no longer enslaved, confronted permanent inequality in political institutions and economic opportunities. The constant flow of resource wealth to a criollo elite—allied with foreign interests—cut deep channels into Bolivian society. Those flows changed form but scarcely diminished with the advent of globalization.

The government of President Evo Morales came to power in January 2006 with bold plans to change all this. Its main promise to its indigenous and impoverished base of support was to reform the constitution to assure the indigenous majority the full exercise of its citizenship, and to redistribute national wealth in favor of the poor.

Despite winning an absolute majority in the 2005 presidential elections, the Morales administration has had considerable difficulty leveraging its political capital into an efficient reform process.

Constitutional Revision

For the fledgling government of President Evo Morales, a new constitution is the cornerstone of lasting change. The goal is to create a new legal structure for Bolivian society that for the first time in the nation's history respects and legally recognizes diversity in a "plurinational" country.

The Constituent Assembly arose as a demand by social movements in the 1990s and more specifically in the Water War of Cochabamba in 2000-2001. In recent years neoliberal governments made legal and constitutional changes to grant private investors near carte-blanche access to natural resources and basic services, exposing the poor nation to one of the most unequal and exploitive forms of globalization found in the hemisphere. These legal changes became the hallmark of their governments and the source of their downfall.

For instance, in 2003 President Gonzalo Sanchez de Lozada fled to the United States after his government fired into a crowd of protestors, killing dozens. He and former defense minister Sanchez Berzain currently face extradition demands and a lawsuit from the Center for Constitutional Rights for damages related to the murder of 67 women, men, and children in the September and October protests, nearly all from indigenous Aymara communities.

After taking office the Morales government moved rapidly to institute the Constituent Assembly. The unprecedented process required establishing new institutions and rules that have generated ambiguity at times and conflict throughout. Acrimonious negotiations, dualing mobilizations in the streets, and overheated media warnings of ungovernability held the nation in near permanent chaos from July of 2006 to the mandated deadline of Dec. 14, 2007. Much of that time the assembly was suspended.

The government has been criticized frequently by both the left and the right for errors of judgment and procedure, but it has attempted to keep dialogue open. The conservative opposition has taken a confrontational stance toward the Constituent Assembly—presided over by Quechua and women's rights leader Silvia Lazarte —from the outset. The loosely coordinated opposition has zig-zagged between calls for greater adherence to the law and illegal acts of sabotage, including violence from civic committees and local neo-fascist groups. Finally, some but not all of the rightwing conservative parties launched a boycott of the institutional process.

The Assembly faced one obstacle after another. Debates over representation, regional autonomy, landholdings, and an old issue of where the nation's capital should be physically located (Sucre or La Paz) tested the limits of a country facing entrenched interests and the uncertainties of moving from a historically unjust system to a new system yet to be defined.

Toward Referendum

Finally on December 9 the assembly approved the constitutional text with the required two-thirds vote, but with a boycott of the major political conservative party PODEMOS. The text now goes to a national referendum, but only after a separate referendum on the crucial issue of land reform.

In a recent interview with the CIP Americas Policy Program, Vice President Alvaro Garcia Linera stated that the conflicts have their roots in Bolivia's history and reflect a fundamentally healthy, if difficult, stage of democratic redefinition.

Following the boycotted assembly, four of the nine departmental governments declared autonomy, with some leaders going so far as to threaten secession. They have begun gathering signatures to call a referendum on a far more radical form of autonomy that would grant local governments broad control over resources found in their territories and erode central government authority and national cohesion. Since these departments concentrate much of the nation's oil and gas and agricultural production, the move is a serious challenge to the Morales government, which has responded by declaring it divisive and illegal.

The text of the proposed constitution begins by declaring that Bolivia is "a unitary, plurinational, communitarian, free, independent, sovereign, democratic, social decentralized state, with territorial autonomies" that is founded on "plurality and political, economic, judicial, cultural, and linguistic pluralism."

The sheer quantity of adjectives reveals the complexity of the political project underfoot. The declaration of principles reflects the recent history of Bolivia's grassroots struggles for political representation for the indigenous majority and similar efforts in other Latin American nations with sizable indigenous populations.

It also addresses the age-old issue of the balance of power between federal, state, and local government by recognizing four types of autonomy: departmental, regional, municipal, and indigenous. The practical overlap here will be a challenge.

A detailed analysis of the 411 proposed articles now becomes the task at hand of Bolivian society as the constitution goes up for a popular referendum. But the other key element worth mentioning is the constitution's overall concept of building a state that controls and regulates natural-resource use for the public good. This is a political sea change from the era when it was assumed that what was best for the private sector was best for the nation.

Why Bolivia Matters

To outsiders, Bolivia's upheaval may seem like merely the latest in a seemingly endless series of conflicts in a tiny nation known for political instability.

The corporate-controlled media in the United States have carefully crafted an image of a relatively ignorant and violent populace running rampant over hopelessly weak institutions. These distorted images persist even though the deep changes proposed by the government have been conducted largely through legal channels and it has been the conservative opposition that has sought to undermine those processes.

The indigenous character of Evo Morales's leadership and popular support plays like a subtle but palpably racist sub-theme in the international press, with the Wall Street Journal taking the lead in Evo-bashing. An Indian president, Morales is persistently portrayed as a pawn of Venezuelan President Hugo Chavez, and his deep ties to traditional coca growers are recast as nefarious drug lord activities. Numerous press reports portray indigenous organizations as mindless mobs intent on dismantling the remains of Bolivia's dubious democratic institutions.

The viciousness of these attacks on the Morales government best reveal the potential global impact of what it's trying to do. Bolivia matters, to everyone seeking more just and stable societies, for two reasons that Vice President Garcia Linera describes as the "two conquests of equality"—political justice and economic justice.

The government's attempt to establish conditions for the full exercise of citizenship for indigenous peoples goes beyond equal access to limited forms of representative democracy. Recognizing the rights for the 36 peoples mentioned in the new constitution implies devising concrete mechanisms to harmonize communitarian and liberal forms of justice and government that have very different logics. Every nation in the Western Hemisphere where indigenous peoples have survived the genocidal campaigns of the past five centuries faces this challenge.

The second challenge, the effort to harness the sustainable use of natural resources for the public good, tests the limits to change imposed by the global neoliberal system. Can a country climb from poverty to equitable development through constitutional reform?

The answer will depend in large part on the dynamics of Bolivian politics and the ability of the political leadership. But it will also depend on the extent of external limitations. In assessing those limitations, Mexican political analyst Adolfo Gilly points out "the inelastic limits that those who govern run into, whether it be the ferocious resistance of the classes that have been displaced from power, and their political and economic representatives, foreign as well as domestic; or the steel cage in which the new global neoliberal order encloses possibilities of action, along with the imminent presence of its powerful material base—the Pentagon, the military force of the United States; or the material limits of scarcity, national isolation, and poverty."

The Morales administration has so far sought to break the ties that bind in various ways. It announced withdrawal from the U.S.-run School of the Americas—now called the Western Hemisphere Institute for Security Cooperation (WHINSEC) but still often referred to by the less cumbersome name it carried prior to a 2001 revamping. SOA/WHINSEC is a military training facility in Georgia that has produced a long line of dictators and torturers throughout the hemisphere.

With respect to the global economy, the Bolivian government decided to withdraw from the International Centre for Settlement of Investment Disputes of the World Bank, a trade arbitration system characterized by its supranational powers, lack of transparency, and bias toward investors.

Bolivia has sought renegotiation of its Free Trade Agreement (FTA) with Mexico as well as opposing an FTA with the United States, while signing a People's Trade Agreement with Venezuela and Cuba. In March of 2006 the government stated it would not seek to renew its standby agreement with the IMF, which was responsible for imposing neoliberal policies that hurt the national economy and its most vulnerable sectors.

International Response

The response of the Bush administration to the Morales government has been hostile but guarded. U.S. Agency for International Development has moved to directly fund projects in opposition regions to strengthen resistance to the policies of Morales' party, the Movement for Socialism (MAS), as part of its "democracy-building" program.

The U.S. ambassador in Bolivia, Phillip Goldberg has had frequent run-ins with the Bolivian government over accusations of politically targeted aid. The ambassador recently stated that the relationship between the two countries was "complicated" and emphasized that cooperation would be focused on reducing coca cultivation. This formulation is ominous given the wide differences between the Morales government's policy of promoting traditional coca growing while cracking down on cocaine production, and the U.S. drug war model centered on militarization and fumigation programs.

On the other hand, several Latin American nations have stepped up to support Bolivia following the termination of the Constituent Assembly. Brazil's President Lula made a state visit and announced a $1 billion investment by the country's state-owned petroleum company in oil and gas. The announcement was particularly significant since Brazil's semi-public gas giant Petrobras initially protested the Morales government's nationalization of control of its operations in the country and suspended further investment. Chilean president Michelle Bachelet also gave explicit support to the beleaguered government by promising to finish the Inter-Oceanic highway system.

Perhaps the most important determining factor in the success of the Morales program will be its relationship with progressive social movements of indigenous peoples, workers, miners, women, and others that created the revolutionary conditions that brought the MAS to power. Not only is this the government's base of support, but it is the true source of national sovereignty and impetus for democratic change. Although the Evo Morales administration defines itself as "a government of social movements," historians Forrest Hylton and Sinclair Thompson rightly point out that the relationship is far from simple and that it will be crucial that the independence and political space of those movements not be subsumed in the logic of the state.

Bolivia today is an open laboratory. It might seem an unlikely stage for such an ambitious experiment: a landlocked nation of scarcely nine million with strong vestiges of colonial rule and the continent's highest poverty rate. Yet the effort to use the state to retake and redistribute resources ceded to private economic interests under globalization, to enfranchise indigenous populations, to narrow the appalling gap between the haves and have-nots of our era deserves a chance and will no doubt provide lessons for the rest of the world.

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