Bolivian campaigners criticise government's celebrations following aid deal

Debt campaigners in Bolivia have criticised their government's celebration of a $1.5 billion aid deal at last week's Consultative Group of international donor's meeting in Paris. They claim that the announcement, at a time of immense social unrest in Bolivia, actually hides an overall fall in aid and with ongoing debt service payments will make no difference to investment in social services.

At the international meeting in Paris, Bolivia was promised $1.5 billion by donors in the form of concessional credit and aid over the next 3 years. This will come as a supplement to funds released under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. However Jubilee 2000 in Bolivia pointed out that in the last five years, Bolivia has received an average of $655 million per year in aid. Last week's meeting agreed that Bolivia will have its aid reduced to an average of $500 million per year, over the next 3 years. At the same time, Bolivia is still paying $240 million in debt service payments, which is almost three-quarters of its spending on health.

Jubilee 2000 Bolivian campaign called the government's attempt to generate false hopes for the people of Bolivia “highly inappropriate.” It has called for more realistic and transparent communication with its people in order to avoid further social disruption and disappointment, especially in the light of the social conflicts that have recently been afflicting the country.

Bolivia is slowly emerging from weeks of severe social conflict which saw roadblocks being set up across the nation. The capital La Paz was cut off and goods had to be flown in to deal with soaring food prices and severe shortages. The unrest was initially prompted by anger from Bolivia's coca farmers at the US backed plan to eradicate Bolivia's coca plantations. However coca farmers were soon joined by teachers, other workers and peasants demanding pay rises and the elimination of a water tax. The nationwide demonstrations reflect popular dissatisfaction with the state of the economy and fear of the impact of further IMF imposed Structural Adjustment Policies.

The recent social conflict is the second wave of protests to sweep through Bolivia this year. In April, there were a series of street protests, some of which ended in violence, as well as a general workers' strike in opposition to the government's announcement to privatise the state water company. The decision was part of the structural adjustment programme that Bolivia was required to adopt in order to be eligible for debt relief.

However the Bolivian government now seems to have given into popular pressure by agreeing to prop up corn prices, reverse a process that would have raised property taxes and revert water rights back to Indian peasants.

Moreover the Bolivian government and leaders of six coca farmers' federations finally reached an agreement ending the 26-day conflict in coca growing areas. The government accepted peasant demands to safeguard traditional coca production areas and have agreed not to build military bases in these areas, an idea originally endorsed by the Bolivian and US governments as well as the United Nations. An accord has been signed and a 30-day truce has been agreed upon.

• See also “States of Unrest; Resistance to IMF policies in poor countries” report by World Development Movement