Bolivia puts Chaos on Pause, Greets 2011 with Fuel Hike Reversal

Slightly after 10 pm on Friday, 31 December 2010, Bolivia's president Evo Morales surprised the nation by reversing a fuel price increase of up to 83% on gasoline and diesel that caused violent protests throughout the country over the next 5 days.

Supreme Decree 748, announced by Bolivia's vice president Alvaro GarcĂ­a Linera the day after Christmas, abruptly threw the nation into uncertainty and chaos as bus and taxi drivers immediately increased their prices by 80-100% causing the public to take to the streets in protest. Shortly thereafter, prices on almost every other product on the market soared. Hundreds lined up at banks to empty their accounts amidst rumors of a "corralito" (a run on banks).

Marches, strikes, road blocks and protests spread throughout most major cities including La Paz, El Alto, Oruro, Sucre, Santa Cruz, and Cochabamba as citizens, worker's unions and the transportation sector expressed their shock and discontent.

The cities of La Paz and El Alto suffered the most as the president's own MAS party members turned out in droves asking for his resignation and those of the vice president, the minister of hydrocarbons, and the economy minister. Protesters destroyed a series of highway tollbooths, overturned and burned vehicles, pillaged offices, threw rocks through windows and fought against government supporters in the streets where they were met by the police with teargas.

In the Chapare, Bolivia's largest coca growing region (Morales is currently the head of the country's 6 largest coca producer unions) roads were blocked, as were several other major highways between cities such as Cochabamba and Santa Cruz.

Hundreds of Christmas holiday travelers found themselves stranded and unable to afford to return to their homes as bus ticket prices doubled overnight and road blocks caused some bus lines to close their offices and cancel travel.

Although the government downplayed the protests by stating they were minimal and headed by small groups backed by opposition parties, Morales' own MAS party members, calling him a traitor, were quick to remind him that in 2005 they had supported him in ousting then president Carlos Mesa, who had suggested a mere 10% fuel hike.

The decree was considered extremely ill-timed in a country in which nearly 70% of the population lives in dire poverty, that has an unemployment rate of 7%, inflation of over 5%, a serious image problem that has potential investors balking, a planned devaluation of the dollar, and a diesel-dependent agricultural sector that is already in crisis after suffering the worst drought in over 40 years.

Morales annulled the decree stating that he had promised to govern in obedience to the people. However, he also annulled all related measures he had announced to counteract it, including a 20% minimum wage increase to the police, military, education and health sectors, insurance for the agricultural sector, and a double year-end bonus for government employees.

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