Revolution is brewing in Bolivia.

This is a nation with 8.5 million people, of which 60% live on less than $2 a day. During the 1990′s there was a significant progress in privatizing state-owned industries: airline, telephone, railroad, electric power, and oil. But the last three years have seen a major slowdown in the world economy and Bolivia has suffered, thus the government’s anti-poverty programs have suffered.

In 2002 a general election failed to provide a clear majority for any candidate, forcing a runoff in Congress. US-educated Gonzalo Sanchez de Lozada is a millionaire on the center-right of the political spectrum. He won the Congressional vote. His opponent was Evo Morales, a radical Indian leader of Bolivia’s coca growers.

President de Lozada oversaw much of the privatization programs in the 90′s, and wishes to continue the trend. He proposed a plan to export natural gas through Chile for sale to the United States and Mexico, bringing and estimated $1.5 billion in revenue each year. This plan has set off a wave of violence that has claimed the lives of over 50 people, injured many more and has possibly sparked plans to topple him, barely one year into his five-year term. As Congressman Morales, a protest leader, said:

“What the Bolivian people want is that the gas remain in Bolivia, for the benefit of Bolivians.”

The mountain capital of La Paz has been under siege for weeks. There are daily protests, scattered looting, and gun battles between protesters and police. Protesters are digging up roads with chisels and scattering paving stones to block major intersections, making movement in the city nearly impossible. Further, commuters who attempt to make it to work are sometimes pelted with stones. Many shops remain closed for fear of looting.

There are a number of factors at work here, mostly historical.

1. The country has a long history of being exploited by foreign powers; the level of distrust is extremely high when one speaks of selling resources to other nations.

2. Bolivia is a landlocked nation, having lost its coastline to Chile way back in 1879. These people know how to carry a grudge – resentment towards Chile is still very strong and the people do not want Chile to benefit from Bolivia’s natural resources.
3. The people do not believe that the economic rewards of privatization will filter down to them. With the long history of privatization and the large number of impoverished citizens, it is difficult to blame them.

So now the president has lost the confidence of his people, his congress, and even his own vice-president. One minister has resigned, several others have threatened to do the same, and the vice-president withdrew his support, citing disapproval in the way that de Lozada was utilizing the military and police to quell the protests. Although the majority of protests are peaceful, it is said that the political violence is the bloodiest in two decades.

As a result, the weak coalition of centrist parties is disintegrating, while the leaders of parties like the Left Revolutionary Movement and Movement Toward Socialism are taking advantage of the situation, calling for de Lozada’s resignation. The protesters are further demanding that the government abandon plans to take part in the U.S.-sponsored Free Trade Area of the Americas and renounce free market economic policies which have been in place since 1985.

De Lozada now sits in the presidential palace surrounded by a ring of tanks. He states it clearly when he says:

“Bolivia is in danger,” he said. “It is being attacked by a subversive project from abroad aimed at destroying Bolivian democracy. They will not succeed because our democratic institutions are strong.”

I fear he is incorrect. The opposition has a strong base of support in the impoverished populace.

Update: InstaPundit connects the dots, and they make an outline of a terrorist.

Update: Newly blogrolled Newly.com posts a letter from his brother in Bolivia, who explains the reasons behind some of the people’s sentiments:

For one thing, because many Bolivians still resent their loss of coastline to Chile over a hundred years ago, but mainly that so many industries have been privatized here (part of the IMF recommendations to stabilize Bolivian currency (which worked) and economy (which hasn?t seen much change) and there has been no benefit to the poor majority of Bolivians. For example, the train system was sold to a Chilean company and now trains don?t run to La Paz because the route wasn?t profitable. The national phone system was sold to an Italian company, etc., etc. It seemed that the rich were the only people to benefit from these changes. They don?t want to see the same thing happen again without guarantees that they will see some benefit.

Update: Ciao! is on location in Bolivia and reports that the president held a press conference with the heads of two major coalition parties, presenting a four-point plan. Looks like he won’t be stepping down any time soon.

Sources: CIA World Factbook
BBC News Country Profiles
CBS News: Back To The Future In Bolivia
Yahoo! News: Bolivian Leader Nixes Plan to Export Gas
MercoPress: Bolivian leader refuses to resign
SF Gate: Bolivia protest spirals into general rebellion
Forbes: Tanks shield Bolivia president from growing revolt