(PINR)Cycle of Instability in the Andes: Bolivia, Ecuador and Peru

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Power and Interest News Report (PINR)
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31 January 2005
Please visit the following analysis that places today's analysis in context:

"Testing the Currents of Multipolarity"
http://www.pinr.com/report.php?ac=view_report&report_id=246

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Cycle of Instability in the Andes: Bolivia, Ecuador and Peru
Drafted By: Dr. Michael A. Weinstein
http://www.pinr.com

The core Andean states -- Bolivia, Ecuador and Peru -- form the most politically unstable region in South America today. Political instability is no stranger to the Andes -- the three states in the heart of the mountains have long histories of veering from military rule to authoritarian and quasi-democratic civilian governments, and have political cultures that encourage direct extra-legal action as a social counterbalance to formal institutional and constitutional processes. At present, each of the Andean states is in the throes of a political crisis. The immediate causes of the crises are local and theforms they take are different, yet they express the same basic and persistent social tensions, making their simultaneous occurrence an indication of region-wide problems rather than simply a coincidence.
In Bolivia, the integrity of the state itself has come into question as protests initially mounted to oppose increases in fuel costs have escalated into autonomy and secessionist movements in the country's energy rich and relatively prosperous south and east. In Ecuador, the integrity of the constitution has become problematic in the aftermath of a congressional decision instigated by President Lucio Gutierrez to remove 27 of the 31 justices of the country's Supreme Court and to replace them with others. In Peru, President Alejandro Toledo's approval rating has fallen to eight percent in the wake of an electoral fraud scandal and a raid by radical nationalist militia on a police station in the town of Andahuaylas. In each case, the major issues are surrounded by other conflicts, leading to uncertainty about each country's political future.
Cycles of stability and instability corresponding to periods of economic growth and decline have become normal in the Andean states. In a recurrent pattern, relative economic prosperity covers over underlying social tensions, which come to the surface when the economy contracts. Deep social divisions between the minority of European and mixed ancestry that controls each country's wealth and forms its political class, and the indigenous and mixed majority of peasants and mine workers are activated in recessionary times and are expressed in both direct forms of confrontation and derivative conflicts within the political class.
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Bolivia

Andean instability has recently become most severe in Bolivia, a country of eight million people, 55 percent of whom are indigenous and 70 percent of whom live below the poverty line. The country has been long dependent on mining and subsistence farming, but, in the 1990s, large natural gas deposits were discovered in its southeastern province of Tarija and since then have become the major focal point of a political conflict over how the resources will be developed, processed and marketed.
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Ecuador

Less severe than in Bolivia, political stability in Ecuador follows the same pattern of political tensions surfacing in the wake of resistance against neo-liberal economic policies that have been instituted in response to pressures from international financial organizations. Two-thirds of the country's population of 13.7 million is of mixed Spanish and indigenous ancestry, 25 percent is indigenous and 7 percent is European (mainly Spanish); but 40 percent speak the indigenous language Quechua. Like Bolivia, 70 percent of the population lives below the poverty line, reflecting a sharp rise that occurred during the Andean recession. Large oil deposits were discovered in the country during the 1970s, supplementing its agricultural base and providing cause for conflicts over the distribution of revenues and how the resource should be exploited.
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Peru

Whereas in Bolivia, the state itself is in question, and, in Ecuador, constitutionalism is threatened, in Peru, it is only the administration of President Alejandro Toledo that is problematic. With a population of 27 million that includes a 45 percent indigenous plurality, with people of mixed ancestry (37 percent) and European ancestry (15 percent) composing most of the rest, Peru's poverty rate of approximately 50 percent is lower than those of the other core Andean states. Its economy is also more balanced than those of its neighbors, though it is still in great part dependent on resource extraction, and it has gone furthest on the path of market reform.
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Conclusion

Political instability has been the norm rather than an exception in the three core Andean states. With societies deeply divided by class, region and ethnicity, the values of constitutionalism and indirect institutional action have never taken root in Bolivia, Ecuador and Peru. In their stead, direct action has become the means by which readjustments in the balance of power among social groups have been effected.
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As the Andean states work through their cycle of instability, Washington is pushing Ecuador, Peru and Columbia to sign a free trade agreement as part of its strategy of instituting its plan for a Free Trade Area of the Americas in piecemeal steps. The recent bout of Andean instability has not yet derailed the agreement, but, even if it is signed (disputes on agricultural goods and treatment of foreign corporations have yet to be resolved), its effectiveness would be in question were the Andean states to take a populist turn. Washington is not pleased with developments in the Andes, but there is little that it can do about them.
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complete report available at http://www.pinr.com


Report Drafted By:
Dr. Michael A. Weinstein
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