The New Opium Wars in Bolivia

Last week 27 people were killed in Bolivia. They were in the streets protesting a 12.5 percent income tax increase (“impuestazo”) levied on the poor by the government at the behest of the International Monetary Fund. The IMF says this is necessary to reduce a budget deficit and as a pre-condition for four billion in new loans. So the people went in the street to protest and Bolivia’s right wing president, Gonzalo S?nchez de Lozado, sent out the troops. The situation was so bad — shops and supermarkets were looted and government buildings in Plaza Murillo were torched — that the president decided it wise to roll back the tax. For now.

On the first day of the riots CBS, NBC, and Fox published stories. Colorful riots and footage of historical buildings aflame will always attract the attention of a corporate media addicted to sensationalism. They mentioned the tax increase but said nothing about the IMF or its austerity plans. “While Bolivia has had some recent success transferring itself into a market-oriented society, the slow growth rates in the late 1990s fueled discontent in the country’s low-income sectors, leading to major civil disturbances in both 2000 and the following year,” the UPI explained. ABC felt it was necessary to mention the looting of Pepsi and Coca-Cola bottling plants, as well as a Burger King. As usual, little was put in context. No mention of loan sharking by the IMF. No mention of the wholesale looting of Bolivia’s economy by international neoliberal bankers, “market-oriented” managers who specialize in dismantling Third World countries for fun and profit.

Of course, we shouldn’t expect ABC or CBS to mention how a public water system in Cochabamba was sold to foreign investors in 2000, an act of theft resulting in large protests and the imposition of martial law. After Aguas del Tunari — a consortium led by London-based International Water Limited, which is jointly owned by the Italian utility Edison and US-based Bechtel Enterprise Holdings — gained control of Cochabamba’s water, rates were hiked by 35 percent. Only after Cochabambinos went in the street did then president Hugo Banzer promise to roll back the rate increase. Banzer eventually broke his promise, as S?nchez de Lozado will eventually break his over the income tax increase. World Bank director James Wolfensohn felt compelled to tell a Finnish news reporter at the time of the Cochabamba swindle that it’s not unreasonable for a family earning $100 a month to pay $20 for water. Wolfensohn didn’t bother to mention that World Bank economists in and around Washington pay $17 per month for water. It’s also not uncommon for them to pay $100 for lunch in one of those posh Capitol Hill restaurants.

Greg Palast, an American journalist who works for the BBC, explains how the World Bank and International Monetary Fund implode and then loot economies in Third World countries. He quotes Joseph Stiglitz, ex-chief economist of the World Bank, who describes the thievery as a four step program. “Step One is privatization,” writes Palast. State industries in poor nations are sold off at bargain basement prices. “After privatization, Step Two is capital market liberalization. In theory this allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money often simply flows out… Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days… And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%… Higher interest rates demolish property values, savage industrial production and drain national treasuries.” Step Three follows: market-based pricing, “a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls ‘the IMF riot’… The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and tear gas) cause new flights of capital and government bankruptcies.” Finally, Step Four is introduced: free trade. “This is free trade by the rules of the World Trade Organization and the World Bank, which Stiglitz likens to the Opium Wars,” Palast writes. “In the Opium Wars, the West used military blockades. Today, the World Bank can order a financial blockade, which is just as effective and sometimes just as deadly.”

Naturally, the IMF contends they don’t force the four step program on impoverished nations such as Bolivia. It’s Gonzalo S?nchez de Lozado’s fault, not the IMF and World Bank. As Elias Davidson of the Coalition for Global Solidarity and Social Development writes, “[o]ften we discover that the government officials participating in negotiations with the IMF, are themselves former IMF employees or have been trained in liberal economics at Western universities.” This is at least partially the case with Gonzalo S?nchez de Lozado, who reportedly speaks better English than Spanish. As the son of an exiled diplomat, Lozado spent most of his life in the US. He graduated from a US college with a degree in philosophy and English literature, not economics. He also owned 200 silver mines shortly before being elected to the presidency. Working conditions in these mines have remained virtually unchanged since the 16th century when the Spanish ruled. On February 14, Lozado escaped the presidential palace in an ambulance while La Paz burned.

All across South America the people are in revolt against the IMF and World Bank. In February 2001, Ecuadorian environmentalists and human rights activists occupied the Quito offices of the IMF in support of thousands of indigenous protestors rising up against government austerity measures mandated by the IMF (in Ecuador, the monthly minimum wage is $130 while the monthly cost of living is $200). Tens of thousands marched in Argentina to protest austerity measures (in La Plata, capital of Buenos Aires province, police fired rubber bullets to disperse 400 state workers protesting unpaid salaries). In August, 2002, in Buenos Aires 5,000 people marched against the IMF and a visit by Bushite Treasury Secretary Paul O’Neill (since replaced by millionaire CSX railroad chairman John Snow). O’Neill’s motorcade was pelted with eggs by demonstrators outside the Economy Ministry. In 1999, over 100,000 people marched in Brasilia against the IMF-imposed economic policies of President Fernando Henrique Cardoso (when it appeared last year that Workers Party candidate Luis Inacio da Silva would win the election in Brazil, major investment banks including Morgan Stanley Dean Witter and Merrill Lynch downgraded their ratings and ignited a financial crisis). In June, 2001, tens of thousands marched in Bogota and Medellin, Colombia, not only against the IMF but also US military presence in their country. Meanwhile, in Caracas, Venezuela, the daily El Nacional reported early last year the IMF had offered to bankroll the removal of Hugo Ch?vez, who won presidential elections in 1998 and again in 2000 by the largest majority in 40 years.

According to the Organization of American States (as reported by the UK Observer), the CIA and Bush administration’s fingerprints are all over the failed coup attempt against Ch?vez last April. “How do we know that the CIA was behind the coup that overthrew Hugo Ch?vez?” asks historian William Blum. “Same way we know that the sun will rise tomorrow morning. That’s what it’s always done and there’s no reason to think that tomorrow morning will be any different.”

As popular resistance against the IMF and Washington’s interventionist policies in South America escalate (and popular reformers such as Ch?vez and da Silva are elected in democratic elections), the US will increasingly search for ways to undermine the will of the people, the vast majority who are poor and disenfranchised. Is it possible the February bombing of an exclusive club in Bogota that killed 32 people and injured 162 was the work of the CIA, or was it the work of FARC (as the US media insists) who have allegedly engaged in a series of bombings since 70 US Green Berets arrived in Arauca, a Colombian state bordering Venezuela? If the Green Berets are there, you can bet the CIA is as well.

It is instrumental to note where most FARC activity is centered: in Arauca, bordering Venezuela, where government paramilitary death squads are torturing and murdering alleged FARC and ELN (Ej?rcito de Liberaci?n Nacional) sympathizers. The US State Department has classified FARC and ELN as “foreign terrorist organizations.” The Bush administration’s 2003 foreign aid request to Congress included the first significant non-drug military aid to Colombia since the Cold War: $98 million to protect an Occidental Petroleum pipeline and, of course, fund the murderous paramilitary death squads. “The methods being used against FARC are as old as Rome and as recent as Vietnam,” writes Jared Israel, “punish and murder the ordinary people who support the forces fighting the U.S. Make the cost of independence prohibitive.”

That’s exactly what the IMF and the Bushites are doing in Bolivia — making the cost of independence prohibitive.

Meanwhile, in New York, UN Secretary-General Kofi Annan urged Bolivians to try to resolve their differences “through dialogue and full respect for the institutions of democracy.” Maybe Annan should tell the Bushites, the greedy neoliberal “free trade” investors, the World Bank, the IMF, and the tiny Bolivian elite to respect democracy. “The solution is the resignation of the president,” Amymara Indian leader Evo Morales, who ran against S?nchez de Lozado for the presidency last year, told a radio station in La Paz. “Democracy cannot govern with bullets.”

Nor can democracy govern with IMF loan sharks looking for blood in the water.

KURT NIMMO is a photographer and multimedia developer in Las Cruces, New Mexico. Visit his excellent online gallery. He can be reached at:

We highly recommend regular visits to Nimmo’s website, Another Day in the Empire


KURT NIMMO is a photographer and multimedia developer in Las Cruces, New Mexico. Visit his excellent no holds barred blog at . Nimmo is a contributor to Cockburn and St. Clair’s, The Politics of Anti-Semitism. A collection of his essays for CounterPunch, Another Day in the Empire, is now available from Dandelion Books. He can be reached at: