Bolivia Report · Web viewSteven E. Hendrix * EXECUTIVE SUMMARY. Since 1993, President Gonzalo...

ADVANCING TOWARD PRIVATIZATION, EDUCATION REFORM, POPULAR PARTICIPATION, AND DECENTRALIZATION: BOLIVIAS INNOVATION IN LEGAL AND ECONOMIC REFORM, 1993-1997

Steven E. Hendrix*

EXECUTIVE SUMMARY

Since 1993, President Gonzalo Sanchez de Lozada has initiated reforms designed to privatize industry, reform education, promote participation, and decentralize government. While controversial in their enactment, the reforms are revolutionary. The privatization program, actually called capitalization, sells off a fifty percent interest in state enterprises, and invests the proceeds into retirement funds for all adult Bolivians. All new private investment is plowed back into the company to expand or upgrade service.

The education reforms are geared to providing basic education and adult education to citizens in their native language. This measure seeks to correct previous practice of teaching only in Spanish, despite the fact that the majority of Bolivians are indigenous people, speaking languages other than Spanish. The reforms also hope to address centuries of discrimination against indigenous groups and women, providing them with more equal opportunities for advancement through education.

* * Steven E. Hendrix is a Legal & Policy Advisor with the Broadly Based Economic Growth Team, Bureau for Latin America and the Caribbean, U.S. Agency for International Development. He is also a researcher with the University of Wisconsin Land Tenure Center and an Honorary Fellow of the Institute for Legal Studies, University of Wisconsin Law School. He is an attorney licensed in both Bolivia and the United States (Wisconsin, Washington D.C. and Pennsylvania). The author would like to thank Ivo Kraljevic and Jim Riordan of Chemonics International, Luis Alberto Quiroga of Encuestras & Estudios, Carl Cira and Walter Guevara of the Agency for International Development, Tom Yuill of the University of Wisconsin, and Luis Baldomar of TIERRA for their help in preparation of this article. The opinions expressed are those of only the author and do not necessarily represent the opinions of any other institution. This article was completed in January 1997.

Popular Participation promotes a decentralization of fiscal authority and responsibility from central government to the municipal level. Previously, decision making was highly centralized at the nations capital. Budgets were allocated primarily to the big three cities: La Paz, Cochabamba, and Santa Cruz. Today, this is no longer true: many local communities now receive funds.Finally, a new decentralization law seeks to cement control of government at the local level. It provides for strong municipalities, but stops short of federalism by denying much power to the state level.

Taken as a whole, these measures are the most exciting legislative changes in Bolivia since the agrarian reform of 1953 which immediately followed the Revolution and agrarian reform legislation in 1952. Regionally, these changes rank with the North American Free Trade Agreement, MERCOSUR, and Mexicos changes to Article 27 of the Mexican Constitution as the most important legal developments in the hemisphere this decade. In this light, the Bolivian efforts at popular participation and its related activities become a model for other countries to evaluate as they confront similar challenges.

I. INTRODUCTION

The caricature of Bolivia is a country plagued by military dictatorships and political instability.1 Bolivia experienced 78 governments in 169 years of independence. This instability is now changing. Elected governments have been in place for twelve years.2 Also, there have been years of economic stability since 1985. Previously, inflation topped twenty-three thousand percent. In 1994, inflation fell to about 7.5%. In Latin America, only Argentina had a lower rate. Once heavily protectionist, Bolivia now has a maximum tariff of ten percent and allows free entry and exit of capital.3

1 ?. See Richard W. Patch, Bolivia: The Restrained Revolution, LAND TENURE CENTER REPRINT NO. 33 (1961) (available from the Land Tenure Center Library at the University of Wisconsin).2 ?. See Stephen Fidler, Survey of Bolivia (1), FIN. TIMES, Nov. 9, 1994, available in WESTLAW, 1994 WL 12635832.3 ?. See id.

Bolivias Innovation In Legal and Economic Reform, 1993-1997

Still, according to Bolivian Vice President Victor Hugo Cardenas, Bolivia has always had an exclusionary democracy, representing the paved streets of the cities while leaving rural Indians legally invisible . . . . Native peoples no longer want to be the object of anthropological studies, but participants in constructing democracies.4

Bolivia is Latin Americas second-poorest nation. It trails only Haiti. About seventy percent of Bolivians live in poverty; life expectancy is fifty-nine years, and eighty-two of every one thousand babies die before they are one year old. Maternal mortality is the worst in the Americas and one million women are illiterate.5

Descendants of the Aymara and Inca peoples account for seventy percent of Bolivias estimated seven million inhabitants. Still, most of their communities have received little or no government support.6 To get any level of assistance, Aymara leaders were often forced to make numerous trips to La Paz to meet with urban politicians.7 As late as the 1930s, indigenous citizens were not welcome in the white sections of La Paz, the nations capital. Often, they were forced to bathe and change into western clothing before entering the city. A 1925 decree prohibiting indigenous people from areas near the main square was on the books until 1944.8

Definition of race in Bolivia has come about in social rather than strictly genetic terms. The peasants are the indigenous people. The urban lower and lower middle class, and the rural freehold farmers wear European dress, and are usually bilingual (Aymara or Quechua, plus Spanish).These individuals are often classified as mestizos (generically in Latin America) or

4 ?. Jack Epstein, Bolivia Invites Indians to Its Revolution, S.F. CHRON., Feb. 6, 1995, at A10. 5 ?. See id.6 ?. See id. 7 ?. See id.8 ?. See id.

cholos (as they are called in Bolivia). The upper class, or gente decente (as the peasants refer to them in Bolivia), comprises Spanish speakers with western dress who eat non-indigenous foods. Originally, the elites or whites were of European ancestry. But over the years as families intermarried, new groupings emerged.9

The most recent Constitutional framework for Bolivia dates from 1967.10 That document establishes Bolivia as a unitary republic.11 Power is separated into three branches of government: legislative, executive, and judiciary.12 The legislature is comprised of two houses, a Senate and a House of Deputies.13 The Presidents term of office is four years without possibility for re-election.14 The country is further divided into Departments, each headed by a Municipal Council (Concejo Municipal) and a Mayor (Alcalde).15

Military dictatorship ended in Bolivia in August 1982 with the election of Hernan Siles Zuazo as President, and Jaime Paz Zamora as Vice-President. Siles worked to dismantle the ferocious para-military apparatus. In earlier years, that system had been built with the aid of Argentine officials and foreign fascists like former Gestapo leader Klaus Barbie and terrorist Pier Luigi Pagliari. However, during the de-militarization, the economy was out of control. Siles began to print more money, with money in circulation increasing over one thousand percent between 1980 and 1984. The government was unable to govern effectively or force through any serious stabilization policies.16

By 1985, the problems were clear. The newly elected President, Victor Paz Estensorro, began a systematic attack on the state bureaucracy and implemented a conservative economic policy. With assistance from Harvard University, the 9 ?. HERBERT S. KLEIN, BOLIVIA: THE EVOLUTION OF A MULTI-ETHNIC SOCIETY X (2d ed. 1992).10 ?. See BOL. CONST. (Constitución Política del Estado, Feb. 2, 1967). 11 ?. See id. art. 1.12 ?. See id. art. 2.13 ?. See id. art. 46.14 ?. See id. art. 87.15 ?. See id. art. 200.16 ?. See KLEIN, supra note 9, at 269-72.


government passed its New Economic Plan (Decree 21060, Aug. 25, 1985) which devalued the national currency, established a free floating exchange rate, eliminated all price and wage controls, raised public sector prices substantially, restricted government expenditures, and reduced the wages of government employees. The economy went into a deep recession, but inflation was reduced overnight to a two-digit level, down from 8,170% earlier in 1985 under Siles.17

By the 1989 election, none of the three leading political parties challenged the New Economic Plan or the dismantling of the state capitalization system.18 Estensorros successor, President Jaime Paz Zamora stated:

The new MIR-New Majority and the participative convergence have agreed that the government of national unity must direct its efforts to the following priority objectives to consolidate the Bolivian democratic process and to improve the electoral system; to preserve the monetary and financial stability of the country; to reinitiate the process of economic development; to construct a new Bolivian society centered on the social policy; to modernize and decentralize the state to allow popular participation; to fight drug trafficking; to preserve the sovereignty, well-being, and development of our people, as well as the nations values; and to fight political and administrative corruption in our society. . . .19

To undertake these tasks we will have to modernize the state and promote political and administrative

17 ?. See id. at 272, 274-75.18 ?. See id. at 284.19 ?. President Jaime Paz Zamora, Bolivian Presidents Inaugural Address: Need for Social and Economic Modernization (Radio Illimani broadcast, La Paz, Aug. 6, 1989) (transcript available in BBC Summary of World Broadcasts, Aug. 10, 1989, available in LEXIS, NEWS Library, NON-US File).

decentralization. Our national programme will not work if we do not have a true democracy, which should not be formally representative but essentially participatory and, above all, decentralized. We must reduce the state to make the nation grow; we must strengthen our nation to rebuild the country.20

Despite these commitments, only nine percent of the national budget was allocated for the countryside when President Gonzalo Sanchez de Lozada took office in 1993.21 President Sanchez began to implement changes outlined in his electoral platform, the Plan for Everyone (Plan de Todos).22 As a result, in 1994 the rural portion grew to twenty percent, or $172 million. Small towns that once received $300 a year increased to as much as $250,000. Within this new system, administrative salaries were capped at ten percent of total revenues.23 PRESIDENT SANCHEZ HAS ARGUED THAT STATE ENTERPRISES CAN NO LONGER CONTINUE TO PLUNDER POLITICALLY, OR BE A SOURCE OF INEFFICIENCY AND CORRUPTION:

We all know the sources of financing for these enterprises from multilateral institutions and foreign aid have been closed. Education can no longer continue to be the national disaster it is now. This is reflected dramatically in a rate of illiteracy of 55 percent. I would like to stop here to ponder on this figure-an illiteracy rate of 55 percent. No-one can continue to tolerate the great difference between the countryside and the cities. This caused our country to have the highest percentage of rural poverty in the continent.24

20 ?. Id. 21 ?. Epstein, supra note 4, at A10. See also GONZALO SANCHEZ DE LOZADA & VICTOR HUGO CARDENAS, EL PLAN DE TODOS 13-14 (1993) (discussing some of the reasons for the failure of the previous government to enact the legislation).22 ?. See generally SANCHEZ DE LOZADA & CARDENAS, supra note 21. 23 ?. See Epstein, supra note 4, at A10. 24 ?. President Gonzalo Sanchez de Lozada, Excerpts from Address at Independence Hall in Sucre to Mark the Beginning of a New Congressional Term, (Television Nacional broadcast, La Paz, Aug. 6, 1995), (transcript available in BBC Summary of World Broadcasts, President Sanchez Reviews Structural Reform Process, Aug. 9, 1995,


The external explanation is that the time for international cooperation, on which our country lives to a great extent, is coming gradually to an end. This will force Bolivia and many other countries in many continents to rely only on their own efforts. This is the reason why we have the idea of change in our minds and a light in our hearts.25

Capitalization is an answer to the need for more jobs. The educational reform is an answer to the need to improve our human resources, and popular participation is an answer to the unjust distribution of national income.26

All these reforms seek to meet the great challenge of achieving the sustainable development of our country by ourselves.27

Investments, an improvement in human resources and a reduction of poverty are part of the process of coping with the harsh reality. The next step is to promote the internal sector through pension funds and individual capitalization. Thus national investments will surpass foreign aid in order to extinguish our terrible dependence. With the shares of capitalization-that is, 50 percent of all important state companies like YPFB [Bolivian Government Oil Deposits], electrical and telephone companies, among others-we will have the basis to create the way for having pension funds from individual capitalization which will give Bolivia what every Bolivian dreams about: a dignified retirement.28

But the proposed measures were not met with unanimous support. Shortly after the enactment of the new legislation, on available in LEXIS, NEWS Library, NON-US File).25 ?. Id.26 ?. Id. 27 ?. Id.28 ?. Id.

March 28, 1995, La Paz was the stage of a battle between teachers and policemen. The confrontation also paralyzed the city, in the midst of a partially observed general nationwide strike organized by the Bolivian Labor Confederation (Central Obrera Boliviana, or COB). Public teachers opposed the Education Reform Law, while Labor fought the Capitalization Law and the Popular Participation Law, the current governments program to redistribute national wealth through a decentralization of the administration of national resources, as outlined in the Plan for Everyone.29

On April 4, 1995, the town center of La Paz was once again a battlefield in which demonstrators and antiriot police engaged in a cat-and-mouse game throughout the city streets, from very early in the morning until late in the evening, beneath skies filled with the smell of tear gas.30 The demonstrators were called out by the leaders of the teachers union and by the COB. While the demonstrators and the police engaged in street clashes, COB leaders and the government walked away from the negotiations empty-handed.31

The COB stipulated that the government should agree to negotiate a series of demands that range from halting the privatization process of state-owned companies to salary increases beyond what is established by the national budget, and the repeal of the Educational Reform Law. The government refused to take a step backwards in its push for reform.32

The tense atmosphere that prevailed in La Paz for those few weeks in April 1995 extended to other regions of the country. For example, in the Amazon jungle department (province) of Pando, teachers, supported by workers from other areas, staged a large protest march on April 4 that lasted ten hours and

29 ?. Alejandro Varela, Striking Teachers and Police Clash but General Strike Only Partially Observed, (EFE News Agency broadcast, Madrid, Mar. 28, 1995), (transcript available in BBC Summary of World Broadcasts, Mar. 29, 1995 available in LEXIS, NEWS Library, NON-US File).30 ?. See Demonstrations in La Paz and Elsewhere; Various Groups Plan Further Stoppages, (EFE News Agency broadcast, Madrid, Apr. 5, 1995), (transcript available in BBC Summary of World Broadcasts, Apr. 6, 1995, available in LEXIS, NEWS Library, NON-US File).31 ?. See id.32 ?. See id.


extended over thirty kilometers.33

Faced with increasing social unrest, President Sanchez de Lozada declared a state of siege on April 18, 1995. This marked the fourth time an elected government resorted to this tactic since Bolivias return to democracy in 1982. In contrast to the public acquiescence of previous states of siege, this time the authoritarian measure was strongly resisted. Coca leaf producers (cocaleros) threw dynamite at the army and blockaded roads. Teachers refused to start the school year. Miners reopened a union headquarters in La Paz. Students in Cochabamba took over the state university, and journalists declared a day of action in support of freedom of the press.34

Previous states of siege (1985, 1986 and 1989) were comparatively more effective. They occurred in the days of hyperinflation. People feared the mass dismissals that came after the 1985 economic stabilization initiative. In those cases, citizens seemed to appreciate that economic stabilization required drastic measures. They were therefore willing to accept states of siege to avoid street clashes in protest of government policy. In more recent years, people have grown accustomed to stabilization. Consequently, they were unhappy with the economic models failure to improve living standards and deliver promised jobs.35

Another factor contributing to opposition to the siege was that the Sanchez de Lozada Administration lost strength over the second year of his presidency. Sanchez de Lozada was weakened by his tendency to micromanage and failure to devise an operational plan for his key reforms of popular participation, education reform, and capitalization.36

In April 1995, President Sanchez de Lozada discussed the state of siege:33 ?. See id.34 ?. See State of Siege Fails to Suppress Signs of Unrest, LAGNIAPPE LETTER, Apr. 28, 1995, available in LEXIS, NEWS Library.35 ?. See id.36 ?. See id.

The measure had to be taken to recover the state of law and to protect the interests of all against the abuse of some who wanted to create a state of internal commotion. This state of commotion was creating a bad image and was jeopardizing the stability of the republic. The reform process for changing our society will not be stopped. As a marvelous example for our history, we made the decision to take three steps, and those steps are: education, popular participation and capitalization.37

In 1996, one year later, the country was again in social gridlock. A general strike began on March 18, when state-employed teachers walked out in protest of low wages and the planned privatization of the state oil company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), as well as other state industries. The teachers were later joined by health-care workers, oil workers, public transportation workers, and students. During the strike, protests drawing crowds numbering in the tens of thousands occurred almost daily in the streets of Bolivias capital, La Paz. At least forty thousand people marched in La Paz March 26, after police, the day before, accidentally killed a worker watching the demonstrations. The protests intensified further April 2, when approximately fifty thousand strikers rioted in the capital. The protesters shut down public transportation, threw dynamite sticks at police and looted stores. On April 4, 1996, the government ordered troops into the streets of the capital to prevent more rioting.38

Nevertheless, in the governments first three years, 1993, 1994 and 1995, the three conceptual pillars of the Plan for AllCapitalization, Educational Reform, and Popular Participation with Decentralizationbecame concrete realities.39 This paper examines these controversial programs and outlines their contribution to Bolivias development. The programs have advanced local empowerment in the context of a general 37 ?. President Sanchez Justifies State of Siege in Speech to Armed Forces, (Radio Nacional, La Paz, Apr. 24, 1995), (transcript available in BBC Summary of World Broadcasts, Apr. 26, 1995, available in LEXIS, NEWS Library).38 ?. See Month-Long General Strike Ends, FACTS ON FILE WORLD NEWS DIG., May 9, 1996, at 328 D2, available in LEXIS, NEWS Library.39 ?. See Sanchez de Lozada, supra note 24.


downsizing of government.

II. STRUCTURAL REFORM UNDER PRESIDENT SANCHEZ DE LOZADA

A. Capitalization and Privatization Reform.

According to Carlos Janada, an economist with Morgan Stanley, privatization was initially implemented in Bolivia for the smaller companies, particularly in the hotel sector. That process, however, quickly became associated with corruption.40 However, the government carried out opinion polls and found it could promote an idea of capitalization.41 The capitalization program in Bolivia is really an adaptation of existing privatization trends across South America.42 However, the program has been adapted to Bolivias special needs. Instead of selling off state-owned monopolies completely, like Brazil, Argentina, and a host of other countries, Bolivia plans to sell only half its shares in these enterprises. Private investors would control the companies, but the state still would share in profit.43

The capitalization program is the cornerstone of Bolivias attempt to increase private investment. The program will transfer six state companies, responsible for one-eighth of the countrys economic activity, to the private sector. President Sanchez de Lozada hopes privatization will increase productivity of these industries, so they will one day represent twenty percent of gross

40 ?. See Lisa Sedelnik, A Capital Plan; Bolivias Economic Policy, 68 LATIN FIN. 38 (1995), available in LEXIS, NEWS Library.41 ?. See id.42 ?. See Kerry Luft, Political Odd Couple Shake Up the Old Order in Bolivia, CHI. TRIB., Mar. 4, 1995, available in LEXIS, NEWS Library; Ley de Capitalizacion, No. 1544 (1994); see generally Jose Antonio de Chazal P., Ley de Capitalizacion, 4 CONGRESO NAC. EXTRAORDINARIO DE COLEGIOS DE ABOGADOS DE BOLIVIA 23 (1995).43 ?. See Luft, supra note 42.

domestic product, compared with about fourteen percent in 1994.44

Capitalization differs from classic privatization programs. Interested companies or strategic investors are asked to contribute up to half the equity in the company being capitalized for a fifty percent controlling stake. The capital generated by that contribution is then used to provide technological improvements or expansion in services. The remaining equity in the company is then distributed among the 3.2 million adult Bolivians through private pension funds.45

Under capitalization, employees at a company being capitalized also have the chance to become shareholders or partners (on a voluntary basis) by purchasing shares. To become a partner or shareholder, the employee must buy at least one share and sign an option contract.46

Begun in March 1994, about nine months after Sanchez de Lozada took office, the capitalization program was part of the Presidents broad economic stabilization plan.47 In August 1994, the U.S. government began assistance to Bolivia to prepare five feasibility studies to carry out the program.48 Called The Year of Capitalization, the government hoped that 1995 would be the year all of sectoral legislation would be in place for capitalization.49

One attractive field for capitalization was telecommunications. Passage of a telecommunications law was required to capitalize ENTEL (the state-run telecommunications company) to establish procedures and rules of the game.50

Also attracting foreign investors were specific sectors with a tremendous amount of growth potential. For example, the demand for electricity is growing at a rate of about eight or nine percent per year. That growth rate will require doubling the

44 ?. See Fidler, supra note 2.45 ?. See Sedelnik, supra note 40.46 ?. See id.47 ?. See id. 48 ?. This U.S. $1.25 million program was financed by the U.S. Trade Development Agency. See Marianne Scholte, US TDA Funds Five Capitalization Studies, BOL. TIMES, Aug. 19, 1994 at 1.49 ?. See Sedelnik, supra note 40.50 ?. See id.


current capacity over the next six to seven years.51

In the telecommunications sector, a field associated with high returns, investors have identified unsatisfied demand of roughly eighty to ninety percent beyond the number of existing telephone lines. In other words, demand requires nearly doubling the number of telephone lines over the next five to six years.52

Based on this perceived demand, the government opened up six large, state-run businesses (accounting for approximately 12.5% of GDP) for investment in 1995.53 Those companies are the electricity company (Empresa Nacional de Electricidad, or ENDE); the telecommunications company (Empresa Nacional de Telecomunicaiones or ENTEL); the railroad (Empresa Nacional de Ferrocarriles or ENFE); the smelting and metal refinery (Empresa Metalurgica Vinto or EMV); the oil and gas company (Yacimientos Petroliferos Fiscales Bolivianos or YPFB); and the air-line (Lloyd Aereo Boliviano or LAB).54

Investor response has been impressive. Workers have also opted to participate in the employee stock option programs connected to the capitalization legislation.55 In ENDEs case, the government has an almost ninety-one percent participation rate by workers. In ENTELs case that participation is closer to ninety-five percent.56

Revenue from capitalization goes to privately managed pension funds instead of the government treasury. It is hoped that the process will enable the government to greatly increase the national savings rate. It should also give Bolivians added security.57 [T]he capitalization program in Bolivia provides a safety net for the workers, instant wealth and gratification in a 51 ?. See id.52 ?. See id.53 ?. See REPUBLICA DE BOLIVIA, PLAN GENERAL DE DESARROLLO ECONOMICO Y SOCIAL DE LA REPUBLICA: EL CAMBIO PARA TODOS, 28-29 (Oct. 1994); Sedelnik, supra note 40.54 ?. See Sedelnik, supra note 40.55 ?. See id. 56 ?. See id.

sense, reports Norberto Ellemberger, Latin America Regional Director for Coopers & Lybrand.58

While financial insecurity still affects Latin America, Bolivia may be creating the foundation for ensuring future economic growth by increasing its savings rate. Assuming all goes well, Bolivia may end up being a model.59 Many other countries have indicated interest in Bolivias unique program and are watching to see what happens.60

So far, three electrical companies which belonged to the National Electricity Enterprise have been capitalized. Despite the criticism, there have been no dismissals or evidence of corruption. Workers have kept their jobs, become shareholders, and seen their shares grow in value. The process was open: the enterprises received a contribution of almost 140 million dollars, and fifty percent of the shares are for the benefit of the Bolivian people.61 The new investment capital should generate employment.62

Many critics have probably overlooked the fact that a plan of this nature takes a great deal of effort to prepare.63 Innovative processes such as this one, by their nature, produce problems that have to be addressed as they occur. According to Francisco Munoz, a managing partner with Price Waterhouse in La Paz, the Bolivian government does not have the experience to advance capitalization more quickly because of the uniqueness of the process in the world.64

Many delays, for instance, are associated with passage of new legislation.65 Edgar Saravia, Secretary of the Ministry of Capitalization, notes that [t]here have been some small delays mostly linked to the fact that most of the these processes require new legislation and in some cases that has been a bit more complicated to prepare, from a technical and legal point of 57 ?. See id. 58 ?. See id. 59 ?. See id. 60 ?. See id. 61 ?. See Sanchez de Lozada, supra note 24. 62 ?. See id. 63 ?. See Sedelnik, supra note 40.64 ?. See id. 65 ?. See id.


view.66

Delays slowed passage of the hydrocarbons law and the private pension funds law. A law to modernize tax laws has come into effect, together with legislation to create the new regulatory agency SIRESE (the Sectoral Regulatory System).67 Another contributing factor to delay was the need for the President to focus on more pressing issues during his first year in office, including reorganizing the executive branch, and securing passage of the education reform law and popular participation laws.68

Despite these delays, some portions of the Plan for All continue to progress. For example, fifty percent of shares in the Bolivian airline LAB have already been sold to Brazils VASP. Similarly, the telecommunications conglomerate ENTEL has been sold in part to Italys STET. Further, half of the electric power companies have been sold to American interests. In addition, all of the totally decrepit government-owned railways have been sold to Chilean interests. Still ahead is the capitalization of Bolivias oil and natural gas company and the metal smelters at Vinto. Many Bolivians regard the oil company as something close to a national shrine which should under no circumstances pass into foreign hands. In a war with Paraguay back in the 1930s, Bolivians shed blood for the oilfields of the Chaco region.69

The reasons for the delays associated with the privatization of YPFB (Yacimientos Petrolíferos Fiscales Bolivianosthe state held oil and gas company) include: the reorganization of YPFB and the redistribution of personnel; the failure of the government to gain Congressional approval of a hydrocarbons profits tax before the sale; and the governments inability to complete work on regulations associated with the hydrocarbons law approved at the end of April 1996. The 66 ?. Id. 67 ?. See id. 68 ?. See id. 69 ?. A Strong Dose of Reform for Bolivia, SWISS REV. WORLD AFF., Sept. 2, 1996, available in LEXIS, NEWS Library.

government originally planned to privatize YPFB at the end of 1995. The process was put back at the beginning of 1996 when the hydrocarbons law bogged down in Congress. The bidding date was extended until July 25, then to September 26, and then again to October 31, 1996. Further delays, caused by political opposition to the sale and the governments problems finalizing the sale process, are likely.70

The new hydrocarbons law, signed by President Gonzalo Sanchez de Lozada on April 30, 1996, provides for the capitalization-fifty percent partial privatization-of the upstream and transport divisions YPFB, leaving the refining, wholesale distribution of products, and several service companies in the hands of the state. YPFB will also administer all new joint venture contracts, existing operations, and contracts with international oil companies.71

The approval of this law, which provoked widespread popular opposition, will help secure the financial arrangements needed to start construction on the natural gas export pipeline to Brazil. Challenges faced by the government in drafting the new law included: (a) striking a balance between attracting foreign investment, needed to develop Bolivias hydrocarbon reserves in order to supply the Brazil gas sale contract, and (b) maintaining tax revenues given that YPFB is the national treasurys biggest single contributor. The new hydrocarbons law balanced the thirst for investment with the need to maintain fiscal equilibrium through a profits taxknown as the surtaxwhich rises as hydrocarbon production increases. The new law distinguishes between the taxes levied on old production and new. Old production will continue to pay a fifty percent tax on production. The new tax regime will be introduced for new operations which will start paying an eighteen percent tax on production. Around twelve percent of income from the tax will be set aside for regional governments. Eleven percent will go to hydrocarbons producing departments and one percent to the underdeveloped departments of Beni and Pando. Six percent will be earmarked

70 ?. See Bolivia Delays YPFB Privatization Yet Again as it Releases Valuation, LATIN AM. ENERGY ALERT, Sept. 20, 1996, available in LEXIS, NEWS Library. 71 ?. See Bolivia Approves Major Overhaul of Hydrocarbons Law, LATIN AM. ENERGY ALERT, May 17, 1996, available in LEXIS, NEWS Library.


for the National Treasury.72

Another important aspect of the new hydrocarbons law concerns the system of area concessions. Investors are not so much asked to detail investment amounts, but are invited to make commitments, set targets, and complete work they promised to do. The new law adopts open access with regard to the transport of hydrocarbons. This is important since Bolivia is seeking to become a gas distribution hub for the Southern Cone. The law also grants the hydrocarbons superintendency and the Sectoral Regulatory System (SIRESE) a role in regulating activities in the hydrocarbons sector to ensure fair competition. SIRESE will be funded by a one percent levy on transportation fees and refining receipts. In addition, the law has provisions to declare oil reserves as property of the state and to bar foreign companies from drilling within fifty kilometers of Bolivias international borders.73

On August 23, 1996, the Bolivian Supreme Court agreed to study the constitutional legality of the capitalization and hydrocarbons laws. Applications to declare the measures unconstitutional were submitted by organizations of pensioners and civic action groups, who contend that President Sanchez de Lozada exceeded his authority by attempting to end state control of basic industries and services, including the pensions system. The day the applications were filed, Pensions Secretary Alfonso Pena Rueda stated that the scheme to use proceeds from capitalizations to provide all Bolivians with a basic retirement pension would not be affected by the applications.74

From the development perspective, the capitalization program has advantages and disadvantages. The capitalization approach to privatization may mitigate some of the popular doubts about traditional trade-sale privatizations. Leaving the 72 ?. See id.73 ?. See id.74 ?. See Legal Challenge to Capitalizations; Supreme Court to Rule on Application by Pensioners, LATIN AM. WKLY REP., Sept. 5, 1996, available in LEXIS, NEWS Library, File No. WR-96-34.

proceeds with the company helps to solve the shortage of cash for working capital and investment that commonly afflicts popular participation schemes in Eastern Europe.75 The Bolivian approach might work best where the government can afford to give up the direct revenue from the sale. The approach is improved where popular participation may help avoid political fallout. It also works best in sectors needing significant new investment. Still, the government receives no revenue from sales, something governments often cannot afford.76 Further, privatization in strategic resources, particularly natural ones, have always been sensitive in Latin America. For example, few countries have privatized their oil industries. Even Chile maintains its nationally-owned mining company.77

B. Capitalization and the Pension Fund System

Unlike traditional privatizations, Sanchez de Lozadas capitalization scheme was intended from the outset to benefit all the Bolivian people, not just the business community or those who can afford to buy into former state owned companies. In mid-August 1996, Bolivias capitalization ministry called for international competitive bidding to select two private pension fund administrators (AFPs) to manage the collective capitalization fund produced by the privatization process.78

Officially, the fund is expected to contain some $1.4 billion and when the capitalization of YPFB goes forward, there could be substantially more. The Ministrys competitive bidding arrangement presupposes favorable passage of the new pension fund law. However, there is opposition already forming. For example, the Confederation of Bolivian Workers (COB) refused to

75 ?. See Yvette Collymore, Haiti Economy: Bolivia Model Worries Haitian Groups, INTER PRESS SERVICE, Apr. 19, 1996, available in LEXIS, NEWS Library.76 ?. See id.77 ?. See Sally Bowen, The Americas: Sell-off Initiative Heading for Trouble, FIN. TIMES, Apr. 16, 1996, at 3, available in LEXIS, NEWS Library.78 ?. Bidders Sought to Launch Private Pension Fund System, LAGNIAPPE LETTER, Aug. 16, 1996, available in LEXIS, NEWS Library.


join in discussions that led to the drafting of the bill. 79

The AFPs will be charged with managing an annual old-age relief payment. This is estimated at around two hundred dollars per person-per year to each adult Bolivian sixty-five or older. A similar amount is payable upon death. The AFP program is unique in Latin America. Some three hundred thousand Bolivians who meet the age requirement are eligible to collect in 1997. In total, the collective capitalization fund benefited 3.4 million Bolivians over 21 by December 31, 1995. A program is in progress to identify undocumented potential beneficiaries. With fourteen million U.S. dollars from the Inter-American Development Bank, Unified National Registry (RUN) teams are signing up Bolivians across the country.80

A similar opportunity for AFPs will be the more traditional individual capitalization funds. These are based on the successful Chilean model. AFPs can sign up perhaps a million Bolivians between informal workers and formal employees (those listed on company payrolls) not currently enrolled in formal pensions or making pension contributions.81 It is assumed that the AFPs will jump-start Bolivias nascent capital market, as happened in Chile.82 According to Sanchez de Lozada, the secret of growth and the boom in Chile was the individual capitalization pension funds. The private pension funds in Chile accumulated twenty-seven billion dollars in fourteen years, and

79 ?. See Fair Shares for All in Bolivian Capitalization, PRIVATIZATION INTL, Sept. 1, 1996, available in LEXIS, NEWS Library.80 ?. See id. 81 ?. See id. The word informal in this context refers to workers operating outside normal, regulated channels or authorities. Usually, such work implies lower wages and no nonwage benefits. See, for example, Cynthia Truelove, The Informal Sector Revisited: The Case of the Talleres Rurales/Minimaquilas in Colombia, in INQUIRY AT THE GRASSROOTS 201 (William Glade & Charles A. Reilly, eds., 1993).82 ?. See Fair shares for All in Bolivian Capitalization, supra note 79.

this money is invested until the people retire.83 However, to be fair, the Chilean privatized pension funds are offering decreasing yields to contributors. According to a recent Merrill Lynch study, pension funds are responsible for only a fraction of the savings rate increase in Chile.84

The annual bonus for those over age sixty-five, known as alivio de vejez (age relief) is seen by President Sanchez de Lozada as performing two roles. The first is to provide for one of the most vulnerable groups in Bolivian society, the elderly (the other group is children). The second, which Sanchez de Lozada describes as philosophical, is to compensate the sacrifice of those who have paid the price of hyperinflation and forged the existence of the state enterprises.85

In effect, Sanchez de Lozada proposes a dual pension system. The old direct-transfer regime will remain in force for those who are already members-a mere 130,000 people in a population of 7 million. The new paid-up pension system, to be managed by private fund administrators, will be obligatory for those entering the labor force, voluntary for the rest. The rest, in this case, does not only mean those who are in formal employment, but also the self-employed: the peasants, artisans, and workers in the informal sector, who jointly account for about seventy percent of Bolivias economically active population.86

Earning a pension under the new paid-up system will be tougher than under the old direct transfer system. Members under the new system will have to contribute during 300 months to become entitled, versus only 180 months in the old system. As the plan stands today, the self-employed who want to join face another hurdle: they must certify earnings of about one hundred U.S. dollars a month, and set aside ten percent of that as their contribution. This provision has attracted much criticism, on the

83 ?. See Juan Carlos Rocha, Bolivia: Political Surgery Gives Nation a New Face, INTER PRESS SERVICE, May 23, 1996, available in LEXIS, NEWS Library.84 ?. See Jorge G. Castaneda, A Backlash to Latin America Privatization, SACRAMENTO BEE, Apr. 21, 1996, at METRO FINAL FO1, available in LEXIS, NEWS Library.85 ?. Private Pensions with a Unique Twist; Over-65s to Get a Bonus from Proceeds of Capitalization, LATIN AM. WKLY REP., Aug. 29, 1996, available in LEXIS, NEWS Library, File No. WR-96-33.86 ?. See id.


grounds that many in the informal sector will fall below the minimum earnings level. Women, who represent about forty percent of the workforce and are typically engaged either in unremunerated family work or in unstable employment, are most likely to fall through the net. Sanchez de Lozada promised to take another look at this issue.87 Also at issue is the fact that persons must wait until age sixty-five to receive benefits, while life expectancy in Bolivia is currently only sixty-one years old.88

C. Education Reform

1. Historical Context of Education in Bolivia

International Monetary Fund Director Michel Camdessus said the Bolivian government must break a deadlock on its educational reforms. Camdessus considers this a top priority in Bolivias fight against poverty.89 Historically, education is perhaps the only area in which government investment has led to significant improvement for a broad range of Bolivians. In 1950, just thirty-one percent of Bolivians were literate. By 1976, the figure had jumped to sixty-seven percent, and by 1988 to seventy-four percent. Part of the problem in education has been the use of Spanish for instruction. In 1988, only forty-four percent of the population spoke exclusively Spanish. In 1950, over half the population spoke just one indigenous language, either Quechua or Aymara. After thirty-eight years of offering education only in Spanish, many native Quechua and Aymara speakers became bilingual, with only eight percent in 1988 remaining monolingual in an indigenous language.90

87 ?. See id. 88 ?. See Collymore, supra note 75. 89 ?. See IMF Chief Backs Bolivian Reforms, UPI, May 31, 1996, available in LEXIS, NEWS Library.90 ?. See Herbert S. Klein, BOLIVIA: THE EVOLUTION OF A MULTI-ETHNIC

The new education reform91 may well be the most important of the three pillars in the Presidents Plan for All. Bolivia has South Americas highest concentration of indigenous people. About eighty-five percent of the 7.7 million population has at least some native ancestry. Still, classes were taught only in Spanish. However, beginning in 1995, schools began to offer classes in the Aymara, Quechua, and Guarani indigenous languages.92

The new education law attempts to achieve objectives found in the Constitution. In theory, the Constitution prohibits discrimination based upon race, sex, language, religion, political or other opinion, origin, or economic or social condition. Still, even in 1994, there was significant discrimination against women and indigenous people.93

The discrimination against women is quite significant. For example, women generally do not enjoy a social status equal to that of men. Many poor women do not know their legal rights; traditional prejudices and social conditions remain obstacles to advancement. Women typically earn less than men for equal work. Young girls often leave school to work at home or at a workplace. A study by the National Statistical Institute (INE) found that, as of the 1992 census, 27.7% of women were illiterate, compared to 11.8% of men. Although no legal impediments exist, women hold few professional positions.94

Likewise, the indigenous people face inequalities of opportunities for education and work in Bolivia. Indigenous people, who comprise a majority of the population, lack the opportunity to participate in decisions affecting their lands, culture, traditions, and the allocation of natural resources. The government placed rights for indigenous people on its reform agenda, which includes educational reform and popular participation. The 1994 constitutional reforms acknowledge Bolivia as a multiethnic, pluricultural society and allow the indigenous nations to assume ownership of traditional lands.95

SOCIETY 281(2d ed., 1992).91 ?. See Ley de Reforma Educativa, No. 1565 (1994).92 ?. See Luft, supra note 42. 93 ?. See U.S. Dept. of State, Bolivia Human Rights Practices, 1994, DEPT ST. DISPATCH, Mar. 1995, available in LEXIS, NSAMER Library, DSTATE File.94 ?. See id.95 ?. See id.


Despite the 1994 constitutional reforms, discrimination against and abuses of indigenous people continues. The indigenous majority remains at the low end of the socioeconomic scale, facing severe disadvantages in health, life expectancy, education, income, literacy, and employment. Lack of education, poor farming and mining methods, cultural practices, inability to speak Spanish, and societal biases keep the indigenous people poor. Construction workers, mostly indigenous, are often fired before completion of three months service, relieving the employer of the obligation to provide severance pay and other benefits. The same employer then rehires the workers for another short period.96

The old practice of criadito service still persists in some parts of Bolivia. Criaditos are indigenous children of both sexes, usually ten to twelve years old, whom their parents indenture to middle and upper-class families to perform household work in exchange for education, clothing, room, and board. There are no controls over the benefits to or treatment of the criaditos, who may become virtual slaves for the years of their indenture.97 It is in this context that educational reform is cast.

2. Government Action

On educational reform, President Sanchez de Lozada reports reforms are reaching the schools.

Our children will be better prepared to face lifes challenges and will be able to get better jobs with better salaries. This will allow them and Bolivia to progress. The reform is technically complex but it seeks to end the illiteracy which prevents children from going to school, to bring about a re-evaluation of our culture and to enable our community to take part actively in the educational

96 ?. See id. 97 ?. See id.

process.98

At the end of 1994, the first one hundred children graduated from a pilot program of bilingual education in Aymara, Quechua or Guarani, and Spanish. The President reaffirmed his commitment to teaching all children in both their native language and Spanish. A lack of personnel qualified to teach in the indigenous languages inhibits the expansion of this program at the present time.99

The reform law contains provisions outlining a new National Education System (Sistema Educativo Nacional or SEN).100 The purpose of the system101 is to:

Guarantee human resource formation.Achieve permanent increases in educational

quality to meet the changing needs for education and national development.

Improve the quality and efficiency of education.Organize a collection of educational activities with

multiple and complementary options.Provide for equal access to education for all

Bolivians without any discrimination.Democratize educational services.Seek to promote child development through

manual, creative and productive assignments.

Bring about an institutional and curricular transformation in secondary education.

The System is organized into four compartments102:

Popular Participation.

98 ?. Sanchez de Lozada, supra note 24. 99 ?. See U.S. Dept. of State, Bolivia Human Rights Practices, 1995, DEPT ST. DISPATCH, Mar. 1995, available in LEXIS, NSAMER Library, DSTATE File. 100 ?. See Ley de Reforma Educativa, supra note 91, arts. 3-54.101 ?. These objectives are listed in article 3 of the Ley de Reforma Educativa, supra note 91. 102 ?. See id. art. 4


Curricular Organisation.Curricular Administration.Technical-Pedogological Services and

Administration of Resources.

Alternative education has also been established for persons who have not already concluded their studies, either because of age, or physical or mental disability. This initiative includes adult education programs, permanent education (community support and extension), and special education (to meet the special educational needs of children, adolescents, or adults).103

Today, about forty percent of the rural poor receive primary educational services. Over the past fifteen years, the country experienced a one percent increase in enrollment annually. The new educational initiative anticipates an annual increase in participation of fifteen percent as an impact of the new legislation. It is also anticipated that participation in primary education will reach eighty percent of eligible students in rural areas by the year 2000, and ninety-five percent by the year 2006. Secondary education should reach participation levels of seventy percent by the year 2013.104

D. Popular Participation and Transfer of Powers to Local Communities.

J. Brian Atwood, Administrator of the U.S. Agency for International Development, asserts there is nothing more basic to the development process than participation. American foreign assistance seeks to support broad access to a countrys economy and participation in the societys decision making processes. Participation, in this light, is fundamental for

103 ?. See id. arts. 24-28.104 ?. See Los Objectives de la Reforma Educativa, 31 INFORMATION POLITICAL Y ECONOMIC 1, Aug. 17, 1994.

development. Atwood further argues that foreign assistance is more likely to lead to development if the programs are relevant to peoples needs. Consequently, there must be broad participation by people in defining development priorities and approaches.105

Supporting this idea, U.S. Vice President Al Gore asserts:

If democratic institutions are to serve people properly, the government must decentralize as many functions as possible and deliver services as close to the people as possible. In our country, we are working hard to create a new relationship with state and local governments. We want to empower them to better serve their citizens. In Bolivia, the Sanchez de Lozada administration has given local communities more responsibility for administering education, health, transportation, and irrigation systemsreversing decades of government centralization. Bolivia has passed a Popular Participation bill that will encourage the development of grassroots democracy, improve tax collection, and ensure more equitable allocation of revenues.106

1. Historical Context

The objective of administrative decentralization is not new in Bolivia. While Bolivia started out a highly centralized republic, movements began to change this as early as the 1930s. A national referendum in 1931 approved the Departmental Administration Law (Ley Organica de Administracion Departamental) which sought greater decentralization and participation.107 Yet despite a revolution in 1952, the country

105 ?. See J. Brian Atwood, Statement of Principles on Participatory Development 1 (Nov. 16, 1993) (on file with the Agency for International Development, Office of the Administrator).106 ?. Vice President Al Gore, A Community of Democratic Nations, Address to the Inter-American Development Bank, Washington, DC (Sept. 16, 1994), (transcript available in 5 U.S. DEPT OF STATE DISPATCH 40, Oct. 3, 1994, available in LEXIS, NSAMER Library, DSTATE File).107 ?. See GABRIEL PELAEZ GANTIER, DESCENTRALICACION . . . MITO O REALIDAD? 50-57 (1995).


failed to address this fundamental issue until the 1970s.108

In 1972, General Hugo Banzer Suarez, a military ruler, decreed the Administrative Organisational Law for the Executive Branch.109 A later government, again unelected, under the leadership of Luis Garcia Meza, passed another decentralization law which in fact re-centralized much authority.110 Then, in 1984 and the years following, a real interest in decentralization took hold in Bolivia.111 In 1984 and again in 1986, bills were proposed in Congress to decentralize much of government.112

Work began during the administration of Jaime Paz Zamorra (1989-1993) to design some sort of decentralization or popular participation program. With funding from Germanys Society for Technical Cooperation (GTZ Gesellschaft fuer technische Zusammenarbeit), the Bolivian government organized an empirical survey of communities in Santa Cruz, Oruro, Beni, Pando, and Potosi to engage the public on the issue of decentralization. Questions such as who should elect the Prefect (akin to a Departmental Governor), the school director, health authorities, chief of police, president of the development corporation, and so on were asked. The goal of the survey was to clarify who should manage departmental funds, health centers, transportation and other institutions. There was likewise statistical analysis of who should decide whether to create new taxes. The survey attempted to gauge what people thought about decentralization, how authorities should be elected, and other issues.113 That body of work clearly laid out the reforms demanded by the citizenry in terms of consolidation of 108 ?. See id. at 23.109 ?. See id. 110 ?. See id. at 24.111 ?. See id. at 26-27.112 ?. See id. at 35-37.113 ?. Informe Final Encuesta Descentralizacion (April 1993) in MINISTERIO DE PLANEAMIENTO Y COORDINACION, REP. DE BOLIVIA, ENCUESTA Y ANALISIS SOBRE LA DESCENTRALIZACION ADMINISTRATIVA 9-31 (1993).

democracy, efficiency of the state, and economic and market development. A series of meetings (the concertacion) organized to share draft legislation with members of parliament, non-governmental organizations (comites civicos), political parties, and the executive branch complemented the survey work.114

Today, there is an ambitious program to encourage popular participation. The plan divides twenty percent of the national budget among more than 300 municipalities, based on population. According to the President, many municipalities in rural areas have never received any direct funds in the history of the Republic, and since they are now able to organize and finance improvements to schools, roads, and health services themselves, it should have far reaching and beneficial consequences.115

Known nationally as the Popular Participation Law,116 the broad initiative represents Bolivias shift away from centralized government, an effort to reverse decades of inefficiency and mismanagement and push democracy onto the town plaza. In place since April 1994, the law gives local and provincial officials direct funding on a per capita basis, creates a watchdog system to keep local government honest, and ensures that local tax revenues do not disappear into the national coffers.117

A principal result of President Sanchez de Lozadas two-year-old administration, the law is intended to right the historical imbalance that exists between cities and towns in South Americas poorest nation. The experiment could provide a model for other Latin American countries that for centuries have operated under similar city-centered systemsa legacy of the indigenous civilizations as well as the Spanish and Portuguese

114 ?. Hernan Paredes Munoz, Una Estrategia de Descentralizacion de Largo Plazo para Empezar Ahora, in MINISTERIO DE PLANEAMIENTO Y COORDINACION, REP. DE BOLIVIA, ENCUESTA Y ANALISIS SOBRE LA DESCENTRALIZACION ADMINISTRATIVA 35-38 (1993).115 ?. Keith R. Suttill, Bolivia Mining 95: Exceeds All Expectations, ENGINEERING & MINING J., Dec. 1995, available in LEXIS, NEWS Library, EMJ File.116 ?. See Ley de Participacion Popular, No. 1551 (1994).117 ?. See Gabriel Escobar, Bolivia Defies Past, Tries Decentralization, WASH. POST, Sept. 17, 1995, available in LEXIS, NEWS Library, WPOST File.


colonial governments.118

In Bolivia, where more than sixty percent of residents are indigenous, the difference between urban and rural living is as pronounced as anywhere in Latin America. Although more than a third of Bolivians live in communities of less than 250 people, a disproportionate percentage of the revenues traditionally went to three citiesLa Paz, Cochabamba, and Santa Cruz.119

At its worst, the old system created towns on paper onlyplaces where no funding meant no local government. At its best, a town like Cliza, twenty-five miles south of Cochabamba, relied entirely on La Paz and benefited or suffered at the whim of the central government. It could not survive on what it retained of local taxes or on the meager federal payment, which in 1993 was $250 U.S. dollars, or less than two cents per resident.120 Of the 310 municipalities in the country now getting a share of the national revenues, 181 did not receive one cent of federal funding in 1993.121

Under the popular-participation program, the government plans to steer about twenty-five percent of the national income to poor villages and municipalities. The programs effects are more noticeable in the provinces and in the countryside, where thousands of projects are being developedamong them schools, roads, drinking water, health posts, sewerage systems, and sports centers.122

President Sanchez notes that through the Popular Participation program, 8,000 projects will be carried out in 1995:

This is more than twice the 3,271 projects carried out by the Social Emergency Fund in its three years of existence. Just imagine how this law is changing the lives of millions

118 ?. See id.119 ?. See id. 120 ?. See id. 121 ?. See id. 122 ?. See Sanchez de Lozada, supra note 24.

of Bolivians who have been ignored and left abandoned in the past. Perhaps this is why it is called the blessed law. I hope the opposition will not fulfil its promise of derogating this law if they become the government.123

As work cannot be carried out without men of flesh and bone, popular participation has become the greater creator of jobs in the country through the municipalities. One of the frequent criticisms is that these are temporary jobs, but those who make this type of criticism forget that the resources appropriated to the municipalities are renewed constantly. Therefore, the demand for jobs is permanent.124

Before Popular Participation, provinces received eighteen million Bolivianos per year. In 1995, the provinces received about 415 million Bolivianos, or about twenty-four times as much as before Popular Participation.125 Before Popular Participation was passed, the country distributed its revenue-sharing dollars according to where they were produced. The large, industrialized cities-La Paz, Cochabamba and Santa Cruz-received ninety percent of the money.126 In 1995, those cities got only sixty percent. The remaining forty percent-about $255 million U.S. dollars-went to small towns.127 Sanchez de Lozada asserts For the first time in five hundred years, we have recognized the existence of native communities. . . . We think what we are doing is revolutionary and irreversible.128

Sergio Molina, National Secretary for the Secretariat for Social Participation, claimed: If this nation didnt come up with a proposal like this, it could soon find itself facing Zapatista or

123 ?. See id.124 ?. See id.125 ?. See id. 126 ?. See Laurie Goering & Kerry Luft, Revolution and Democracy: After 171 Years of Neglect, Bolivia Struggles to bring Power - and Money - to its Peasants, CHI. TRIB., Mar. 26, 1995, available in LEXIS, NEWS Library, CHTRIB File.127 ?. See id. 128 ?. Epstein, supra note 4, at A10.


Shining Path guerrillas.129 Under Popular Participation, rural peasants-most of them indigenous Aymara, Quechua, and Guarani people-for the first time are being given an equitable share of federal revenues and the right to decide how they are used. That might not sound very revolutionary, but in a country where many remote towns have not received any federal money in 171 years, except by begging or bribery, its a significant step toward self-determination and democracy.130

It means money will be spent in new places and in new ways, on things such as Aymara text books, rural electrification, and deep wells to irrigate land parched by ages-old drought. Bolivias leaders hope that these investments will prove the key to finally producing tangible improvement in the lives of millions of desperately poor rural Bolivians who have seen no real changes for centuries.131

Its a[n] historic act of reparation, said Vice President Victor Hugo Cardenas, an Aymara. For the first time, the indigenous population is being legally recognized in this country.132

At its most basic level, Popular ParticipationCardenas brainchildis also an acknowledgement of federal defeat. Indicators show that years of federally managed social programs have failed to lift most Bolivians out of abject poverty. Today the average income in Bolivia is fifty-six dollars a month, making this the poorest country in the Western Hemisphere after Haiti.133

The answer couldnt be more of the same, said Fernando Ruiz, Bolivias National Social Policy and Investment Secretary. There had to be a conceptual change.134 So Cardenas and other government leaders decided to take a chance and see what the

129 ?. Id. 130 ?. See Goering & Luft, supra note 126. 131 ?. See id. 132 ?. Id. 133 ?. See id. 134 ?. Id.

rural poor could do to help themselves, given a little cash of their own.135

Concretely, the new legislation distributed income between national, departmental, and municipal authorities. National income was said to originate from:

Value added taxes.Complementary value added tax sources.Presumptive income taxes on corporations.Transactions taxes.Specific consumption taxes.Consolidated customs duties.Inheritance taxes.Exit taxes for leaving the country.136

The country is divided into nine Departments, each with a Departmental Council.137 The councils have advisory, consultation, and control functions.138 The Prefect for the Department, the Presidents appointed representative, presides over the council.139

Departmental income sources are generically said to be those assigned in law.140 Municipal income is generated mainly from presumptive income taxes on real estate and vehicles (cars and airplanes).141 The assumed value for vehicles is based on a list approved by the Finance Ministry.142 Initially, urban property values will be assessed by owners themselves.143 However, these

135 ?. See id. 136 ?. See Ley de Participacion Popular, supra note 116, art. 19A(1)-(8).137 ?. See Ministerio de Desarrollo Humano, Secretaria Nacional de Participacion Popular, Sujetos de la Participacion Popular 28 (1996) [hereinafter Sujetos de la Participacion Popular] (citing Ley 1654, Ley de la Descentralizacion Administrativa).138 ?. See id.139 ?. See id.140 ?. See Ley de Participacion Popular, supra note 116, art. 19(b).141 ?. See id. art. 19(c).142 ?. See Administrative Rules to the Popular Participation Law, Dec. Supr. No. 23813 (1994), art. 25(a).143 ?. See id. arts. 25(b)(1), 6. (citing Dec. Supr. 21458 (1986)).


self-declared figures will fade away as they are replaced by official assessments of the municipal governments.144

Municipal governments have today become, in effect, province sections.145 Cities have now been enlarged to include surrounding rural areas so that all inhabitants are represented in some form by a municipal government, whether they are urban or rural residents.146

Municipal governments and public universities also receive funding under a Co-Participation program with the central government, in which centralized funding is redistributed, with twenty percent going to municipalities and five percent allocated to universities.147 Distribution for municipalities is based on population; distribution for universities is based on the population of the municipality where the university is located.148

Any town with at least five thousand inhabitants is entitled to an accountthose with less than five thousand may join together and share a single account.149

The Popular Participation Law not only transferred resources, but also granted ownership of physical infrastructure corresponding to education, health, sport, culture, neighborhood roads, and irrigation to the municipalities.150

Indigenous groups have taken advantage of the Popular Participation Law to form municipalities that will offer them greater opportunities for self-determination. In 1995, indigenous 144 ? See id. art. 25 (b)(2).145 ?. See Ministerio de Desarrollo Humano, Secretaria Nacional de Participacion Popular, Guia de Capacitacion para Comites de Vigilancia 41 (1996) [hereinafter Guia de Capacitacion].146 ?. See id. 147 ?. See Ley de Participacion Popular, supra note 116, art. 20.148 ?. See id. art. 21.149 ?. See Administrative Rules to the Popular Participation Law, supra note 142, art. 6.150 ?. See Ley de Participacion Popular, supra note 116, art. 13; Administrative Rules to the Popular Participation Law, supra note 142, art. 18.

groups established six municipalities in Bolivia. In August 1995, the Government formed a National Committee for the International Decade of Indigenous Peoples to plan, evaluate, coordinate, and publicize programs to increase self-determination, and to set goals and objectives.151

Community organizations have also become recognized.152 At the municipal level, peasant groups (comunidades campesinas), indigenous communities (comunidades o pueblos indigenas), and neighborhood associations (juntas vecinales) can now register to receive legal recognition or legal personality (personalidad jurídica).153

Legal recognition enables organizations to enter into contracts and exercise legal rights.154 Municipal governments, under the authority of a mayor (alcalde), have the option of forming municipal districts (distritos municipales or cantones) or sub-mayoralities (subalcaldias), allowing for further decentralization of administration.155 This also allows indigenous groups to preserve socio-cultural units and consolidate their political administration.156 City government itself is controlled by 151 ?. See U.S. DEPT. OF STATE, supra note 93. 152 ?. It is incorrect to say that the Popular Participation Law was the first to allow for the recognition of communities. In the Ley de Reforma Agraria, community organizations were supposed to have been recognized. This however was not carried out. The Popular Participation Law not only gives renewed emphasis to this idea, but also extends legal personality. See, e.g., Ministerio de Desarrollo Humano, Secretaria Nacional de Participacion Popular, Apre(he)ndiendo la Participacion Popular: Analysis y Reflexiones Sobre el Modelo Boliviano de Descentralizacion 185 (1996) [hereinafter Apre(he)ndiendo la Participacion Popular].153 ?. See Sujetos de la Participacion Popular, supra note 137, at 10. The nine capital cities for each department, and the cities of El Alto and Llallagua, have together formed a National Confederation of Neighborhood Communities (Confederacion Nacional de Juntas Vecinales or CONALJUVE). See Apre(he)ndiendo la Participacion Popular, supra note 152, at 189.154 ?. See Guia de Capacitacion, supra note 145, at 34; Apre(he)ndiendo la Participacion Popular, supra note 152, at 187.155 ?. See Sujetos de la Participacion Popular, supra note 137, at 34.156 ?. See Ministerio de Desarrollo Humano, Secretaria Nacional de Participacion Popular, Manual de Distritacion Municipal para la


a municipal counsel and the executive officer, the mayor.157 In addition, there is a vigilance committee for each city that is typically comprised of a locally selected representative from each municipal district.158

Vigilance committee members are selected by the communities themselves in accordance with local customs or by-laws for selecting local leadership among peasant groups, communities, or indigenous populations.159 Committee members serve without pay for single-year terms and may be reappointed.160 In short, the function of the vigilance committee is to be the intermediary between society and the municipal government.161 To some degree, the control role of the vigilance committees conflicts with that of the municipal councils. This conflict is already generating some degree of disagreement over jurisdiction between the two.162 The difference between the two is fine: the committees have a control function, while the councils have an audit function.163

By mid 1996, 12,342 peasant communities, indigenous groups and neighborhood associations had already received their

Participacion Popular 5 (1996) [hereinafter Manual de Distritacion Municipal].157 ?. See Guia de Capacitacion, supra note 145, at 42.158 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 120.159 ?. See Ministerio de Desarrollo Humano, Secretaria Nacional de Participacion Popular, Manual de Instrumentos y Procedimientos pata el Comite de Vigilancia 2 (1996) [hereinafter Manual de Instrumentos y Procedimientos]; Apre(he)ndiendo la Participacion Popular, supra note 152, at 154.160 ?. See Manual de Instrumentos y Procedimientos, supra note 159, at 3; Apre(he)ndiendo la Participacion Popular, supra note 152, at 154.161 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 154.162 ?. See id. at 155.163 ?. See id.

legal personality. Indigenous groups and neighborhood associations are currently operating in 308 Vigilance Committees, working with municipal governments on planning and watching over municipal administration of resources.164 By mid-1996, nearly one hundred percent of the urban and rural communities received legal status recognition.165

2. International Reaction

Popular Participation impressed diverse international groups. While in Bolivia in 1994, Cuban Foreign Minister Roberto Robaina characterized Popular Participation as revolutionary. Months later, U.S. Ambassador Curtis Kamman depicted it as an audacious scheme of reinventing true democratic government.166

The U.S. Agency for International Development (USAID) is investing fourteen million dollars between 1995 and 2003 to support the popular participation process. Similarly, the World Bank will provide thirty-seven million dollars in favorable credit to strengthen rural municipalities over a five year period.167

Officials from Peru, Ecuador, and Paraguay have expressed admiration for Popular Participation, despite a few implementation problems. They plan to evaluate whether their countries can initiate similar programs.168

Finally, Bolivia received warm congratulations and support from the United Nations for being the first country in South America to incorporate gender policies in its democratization process. We see that the Law on Popular Participation in this country is a kind of cultural revolution, said Ivanka Corti, chairwoman of the U.N. Committee on the Elimination of Discrimination Against Women (CEDAW), during a meeting in Bolivia in January, 1995, to monitor implementation of 164 ?. See Guia de Capacitacion, supra note 145, at 49.165 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 158.166 ?. See Epstein, supra note 4, at A10. 167 ?. See id.168 ?. See Ian Katz, Hammer, Nails, Brickand a Quiet Revolution, BUS. WK, July 10, 1995, at 28D, available in LEXIS, NEWS Library, File No. 3432.


the Convention on the Elimination of All Forms of Discrimination Against Women. The Bolivian law recognizes the legal status of grassroots indigenous and rural organizations, at the same time allowing an educational reform permitting boy and girl children alike to pursue studies in their native languages.169

3. Opposition and Criticism

The law is not without enemies. During the heated debate before passage last year, opponents argued that local officials would be too provincial to manage their own affairs or too tempted by access to money to do right by taxpayers. Large cities decried the loss of revenues. Skeptical scholars wondered how places without roads, airports, or ports could possibly thrive under a law that raises all local revenue by taxing property, cars, boats, and planes.170

Others question the judgment of putting so much money in the hands of inexperienced administrators. At Pucarani, a town near Lake Titicaca, critics point out that residents opted to use their money to build a race car track in hopes of attracting tourism.171

There is also the question of corruption. Currently, five rural mayors are being investigated, including one who allegedly siphoned off twenty-seven thousand dollars to buy himself a luxury car.172 President Sanchez de Lozada admits being worried about graft, but he said: Even if they get drunk, they couldnt do a worse job than weve done (in the past).173

In reaction to these abuses, the Ministry started providing counseling for municipal officials. Through this process of 169 ?. See Bolivia-Women: Kudos for Engendering Democratization, INTER PRESS SERVICE, Jan. 19, 1995, available in LEXIS, NEWS Library.170 ?. See Escobar, supra note 117.171 ?. See Epstein, supra note 4, at A10.172 ?. See id. 173 ?. Id.

consultation, the Ministry found that sixty percent of the money has been spent wisely, on constructing or improving water facilities, electrical plants, small hospitals, and schools. Part of this success rate may be in part due to the laws creation of vigilance committees, with members drawn from local community organizations. Still, only five percent of the complaints filed by vigilance committees have been substantiated.174

The vigilance committees are just one mechanism to advance transparency and participation in a new democratic system. Residents previously prevented from presenting their concerns now know to whom they should complain.175 Further, for the first time, the law will recognize and give legal personality to grass roots organizations (organizaciones territoriales de bases, or OTB).176 It is hoped that the OTBs, the vigilance committees, and the municipal government can together form a Bermuda Triangle to prevent fraud and waste.177

Another source of opposition to new legislation are politicians in La Paz and other cities who complain they are being hit with new expenses just as their take of the countrys tax dollars is falling.178 Large city mayors such as La Pazs Monica Medina de Palenque are especially angry about losing funds to rural areas and villages. Teachers unions and medical doctors are angry over policies allowing local indigenous communities to dictate what services to provide.179 Federal politicians are dismayed by their loss of power and prestige as the stream of 174 ?. See Escobar, supra note 117. 175 ?. See id. 176 ?. See Ley de Participacion Popular, supra note 116, art. 2a.177 ?. See Vice President Victor Hugo Cardenas, Presentation at the U.S. Agency for International Development, Washington, DC (July 21, 1994), at 7. It should be noted that the term OTB has been the cause of some political problem, with some groups believing their character as an indigenous community might not be preserved if they registered as an OTB. Consequently, as implementation moved forward, it was necessary to abandon the OTB nomenclature in favor of the more precise name of the community form, i.e. indigenous community, neighborhood association or peasant group. See, for example, Apre(he)ndiendo la Participacion Popular, supra note 152, at 151, 184.178 ?. See Goering & Luft, supra note 126. 179 ?. See Epstein, supra note 4, at A10.


groveling rural mayors-who once hauled sacks of potatoes to La Paz as bribes to win support for rural projects-has dried up.180

Before Popular Participation, all tax revenue went to the city source of the tax revenue. For example, proceeds of gas sold anywhere in Bolivia went to La Paz, the legal residence of the oil monopoly YPFB. Now, revenue is distributed according to population. Further, villages themselves are responsible for how revenue is spent. La Paz, Santa Cruz, and Cochabamba, the three largest cities, have seen their share of revenue fall from eighty-six percent of the total to just twenty-eight percent after Popular Participation.181

As of mid-1996, no municipal government established Popular Participation offices, as contemplated in the legislation. This may be due in part to scarce resources. But this lack of formal compliance evidences the distance which remains between the municipal government and the people. It also shows that certain basic aspects of the legislation are not being communicated effectively, even to municipal council members themselves.182 Further, despite the vigilance programs and efforts to curb graft, Bolivia was still ranked second in the world for corruption, and the worst in Latin America, in 1997.183

III. REFORM OF THE CONSTITUTION; DECENTRALIZATION OF ADMINISTRATION

In addition to the structural reforms of capitalization, education, and popular participation, Bolivia has also promulgated two other important reforms. The first is the reform 180 ?. See Goering & Luft, supra note 126. 181 ?. See Katz, supra note 168. 182 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 160.183 ?. See Cómo ana la corrupción en los países?, SIGLO VEINTIUNO, Aug. 1, 1997, at 19. The worst country, according to the ranking by business executives, was Nigeria. See id.

of the Constitution, which includes a recognition of diversity, modernization, and a dignifying of the justice system and the establishment of a national and municipal government term of five years.184 The Constitutional reform makes the National Congress more representative by establishing direct election of half the deputies.185 The second major reform is the Administrative Decentralization Law, produced as a result of meetings and negotiations with organizations representative of Bolivian society and with government and opposition political parties.186

The decentralization law is the last of the major structural reforms promoted by Sanchez de Lozada. It complements participation, capitalization, and education legislation.187 The final shape of the decentralization law occurred as the result of a compromise between the central government, backed by such powerful figures as the mayor of Santa Cruz, Percy Fernandez Añez, on the one hand, and those of the civic movements in the nine departments on the other.188

Under the new decentralized structure, the Prefect will continue to be appointed by the central authorities. The Prefect will have enhanced powers, but the Prefects actions will be monitored by a departmental council, whose members will be nominated by the municipal councils in each province.189

In making this reform, the governments view was that the popular participation law had already made 311 municipalities the new basic unit of local government.190 In this sense, the government had already decentralized and devolved 184 ?. Ley de Reforma a la Constitucion Politica del Estado, No. 1585 (1994).185 ?. See Sanchez de Lozada, supra note 24. 186 ?. See id. The new legislation implicitly amends the former Ley Organica de Municipalidades (1985); Ley de Descentralizacion Administrativa, No. 1654, (1995); Decreto Reglamentario de la Ley de Descentralizacion Administrativa, Dec. Supr. No. 24206 (1995).187 ?. See Eleventh-hour Decentralization; La Paz Seems to Have Got the Better of Tussle with Regions, LATIN AM. WKLY REP., Aug. 17, 1995, available in LEXIS, NEWS Library, File No. WR-95-31.188 ?. See id. 189 ?. See id. 190 ?. See Ley de Participacion Popular, supra note 116, arts. 12-18; Guia de Capacitacion, supra note 145, at 38.


power and resources. Another layer of regional government was not really necessary. Still, it was committed to some form of further decentralization.191

The exact division of labor between the Prefect and departmental council remains to be seen. The Prefect should have the initiative to propose projects and budgets. For its part, the council will be limited to granting or withholding its approval. In cases where the council refuses to grant approvals, the Prefect might be obliged to resign.192

Municipal councils decide by a two-thirds majority who sits on the departmental councils. In that sense, the power of municipal councils is not much affected. Regional pressure groups had hoped that the councils would be directly elected by popular vote.193

The new legislation dissolves these entities with particular regard to the Regional Development Corporations, and transfers their assets to the department and the Prefects.194 The Prefects will then have the responsibility of carrying out municipal strengthening programs.195 Yet, the municipal development units (Unidades de Fortalecimiento Municipal or UFM) still within these regional development corporations, now primarily responsible for the implementation of the Popular Participation Law in the municipalities, are not fully trusted because they are seen as instruments of partisan politics.196

In 1995, in reaction to the governments initial decentralization plan, the Department of Tarija tried to establish an autonomous regional government. While this may have just been a political ploy, it may have also reflected dissatisfaction 191 ?. See Eleventh-hour Decentralization; La Paz Seems to Have Got the Better of Tussle with Regions, supra note 187.192 ?. See id. 193 ?. See id. 194 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 142.195 ?. See id.196 ?. See id.

with the central governments ability to deliver on its promises of decentralization. Manfred Reyes, the Mayor of Cochabamba and chairman of the National Association of Municipalities, expressed his dissatisfaction with the decentralization programs. In contrast, Mayor of Santa Cruz Percy Fernandez Añez, attributed Tarijas action to political reasons.197

Fernandez is a political independent, the head of a local government dominated by the ruling Movimiento Nacionalista Revolucionario (MNR). For Fernandez, the central government has already decentralized political power through the popular participation law. He notes that the legislation gives autonomy to Bolivias 308 elected municipal governments, and transfers control of infrastructure, schools, health, and other services to them, giving them decision-making power over twenty percent of the central governments revenues.198

Fernandez claims that these reforms have given local governments real power for the first time ever. He states that the departmental council set up in Tarija by mayor Oscar (Motete) Zamora was pure politics. Zamora is an uncle and political ally of former President Jaime Paz Zamora, a political rival of President Sanchez de Lozada.199 Fernandez believes departmental councils, established by the Constitution, could be useful forums for the exchange of ideas to coordinate municipal policies, but little more.200

Reyes, while not agreeing with Mayor Zamoras action, would like to see a full debate on decentralization before the government legislates on the subject. He would prefer elected departmental assemblies, headed up by the government-appointed Prefect. In contrast, Fernandez would like the assemblies to be made up of mayors or their delegates.201

Sanchez de Lozada regards the demands of Tarija, Cochabamba and other departments as federalist and therefore incompatible with the Constitution, which defines the state as unitary. He regards the popular participation law, 197 ?. See Just a Local Storm in a Teacup?, LATIN AM. REGIONAL REP.: ANDEAN GROUP, May 25, 1995, available in LEXIS, NEWS Library, File No. RA-95-04.198 ?. See id. 199 ?. See id. 200 ?. See id. 201 ?. See id.


one of the legislative centerpieces of the present government, as granting all the local autonomy needed.202 The President is strongly opposed to direct election of departmental councils, the elimination of the Prefect, or the demands of regionalists.203

The Siglo XXI newsletter points out that, if and when popular participation becomes a reality at every level in Bolivia, the departmental civic committees will become an irrelevancehence their desperate struggle to win the decentralization battle.204

IV. CONCLUSIONS

The old Bolivian state operated from top-down: National government at the top, then Prefects, then municipalities, and last, communities.205 The new legislation tries to put national, departmental, municipal, and community governments on the same level, with dialogue among the four.206

The legal and economic measures taken by President Sanchez de Lozada are dramatic. The Popular Participation Law is without doubt the most important piece of legislation in Bolivia since the Agrarian Reform Law.207 Together with the North American Free Trade Agreement, MERCOSUR, and the changes

202 ?. See Goni Seeks to Halt Local Revolts, LAT. AM. WKLY REP., June 29, 1995, available in LEXIS, NEWS Library, File No. WR-95-24.203 ?. See id. 204 ?. See id. 205 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 169.206 ?. See id. at 177.207 ?. Ley de Reforma Agraria, No. 3464 (1953).

to Article 27 of the Mexican Constitution,208 Bolivian Popular Participation and its related initiatives represent the most important legislative advances in the hemisphere this decade. Critics may charge that the process of privatization has taken twice as long in Boliviaeleven yearsas in other Latin American countries,209 but Bolivia is undertaking privatization in a participatory context in which capitalization is one part of a broader strategy toward structural adjustment. Unlike Chile, where a repressive government simply pushed its program through, Bolivias democratic governments have spent eleven years agonizing over how far to go with reform. One result of Bolivias methodological process is that the country lags late entrants in privatization such as Argentina and Peru, where governments took advantage of chaotic but dissimilar situations to push quick changes.210

Decentralization is directly related to power. In places like Nicaragua, Guatemala, El Salvador, and Costa Rica, legislative changes to increase local fiscal autonomy and to provide for more representative and more participatory democratic systems have already begun to shift the balance of power from central to local governments.211 To a lesser extent, similar concerns are played out in the debate over the District of Columbias budget in Washington, where central government must approve local expenditure. The Bolivians have provided an interesting and provocative model to carry out decentralization in Latin America. In this light, the Bolivian experience should be carefully considered by regional governments looking to advance principles of democracy and participation in a context of fiscal stabilization.

Perhaps it is this contributionthe notion that decentralization can be done along with shrinking

208 ?. Changes to Article 27 of the Mexican Constitution are discussed in Ruben Delgado Moya & Maria de los Angeles Hidalgo Zepeda, EL EJIDO Y SU REFORMA CONSTITUCIONAL (1994).209 ?. See Gabriel Escobar, Change in Bolivia: Nobody Said It Would Be Popular, WASH. POST, Apr. 17, 1996, at A28.210 ?. See id. 211 ?. See Mark H. Biddus, A Review of Decentralization and Municipal Development Initiatives and their effect on Democratization in Central America iv (July 1995) (unpublished report, on file with the U.S. Agency for International Development).


governmentthat holds such allure for many regional governments. Even in the United States the Bolivian message will be of interest, with debate on welfare reform and national health care reform, the tension between centralized control and increased budgetary demands, and concerns for localized control in a context of huge fiscal deficits. In this light, the Bolivian people have shown that social reform can be accomplished even without major infusions of outside funding.

On the other hand, if poverty is Bolivias number one problem, little has been done to address this concern. President Sanchez de Lozada promised a million new jobs. As of 1996, only about one hundred thousand had been created. Even these may have been offset by job losses. According to unions and the Catholic Church, unemployment and underemployment is actually up.212 Still, there is often a lag between structural adjustment and economic turn around.213 Perhaps a rebound is still in store for Bolivia.

One initial gauge of the success of the program can be seen by local level participation in the electoral process. While the absentee rate among voters in 1993 was forty-seven percent, this dropped to thirty-five percent in 1995.214 Another indicator of the new legislations effect are the Popular Participation Days (Jornadas de Participacion Popular) now celebrated across the country, with official backing by the Municipal Strengthening Units (under the Regional Development Corporations) and the National Secretary for Popular Participation.215

Final opinion regarding the success of the Bolivian

212 ?. See Carlos Quioroga, Bolivias President Seeks Time to Beat Poverty, REUTERS N. AM. WIRE, Aug. 6, 1996, available in LEXIS, NEWS Library, CURNWS File.213 ?. See William C. Thiesenhusen & Steven E. Hendrix, Poverty and Progress: The Cases of El Salvador and Nicaragua, 17 HARV. INTL REV. 16, 59 (1995).214 ?. See Apre(he)ndiendo la Participacion Popular, supra note 152, at 142.215 ?. See id. at 159, 192.

program will await data to be accumulated over the next several years. In the meantime, Bolivia has advanced a program with immediate, tangible, and real results, and deserves international respect and attention.

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