Where Does Bolivia's Future Lie?

by T. L.
(Santa Cruz Bolivia)


Title in Spanish: ¿Dónde está el futuro de Bolivia?
Author: Guillermo Del Bosco
(well-known Argentinean retired diplomat and political scientist)
Published in the magazine "Criterio" in March 2008


The general belief is that Bolivia is primarily an Andean country. Perhaps early development of the Andes mountain region contributed to creating this incorrect geographical image. The highlands (1) held great mineral wealth in the form of silver and tin.

(1) According to the National Institute of Statistics of Bolivia La Paz, Oruro and Potosí cover only 28% of the national territory (about 307,000 square kilometers). This area rests 3000 feet above sea level and is located between the two great Andean mountain chains, the Cordillera Occidental and the Cordillera Real.

Without the discovery of these precious metals, colonization of this region would have at the very least been further delayed. The white metal drew the Spanish to the inhospitable highlands and they formed the first settlements which, in time, as happened with most Latin American cities, became ethnically mestizo but culturally white.


Thanks to silver, during the 16th and 17th centuries Potosí was one of the most populated cities on Earth and the wealthy made it their axis of power. Its importance was decisive and it irradiated fortune in all directions: Arica, Charcas, Oruro, La Paz, Arequipa, Huancavelica, Cuzco and Lima.

Independence (from Spain) didn’t change this scenario. The country continue to be an “Andean” country and the remainder of its territory was, for the governments, an unknown wasteland. So unknown that La Paz lost vast expanses of land, larger than those lost during the Pacific War, without knowing what effects this would have on the country’s present and future. Mining in the Andes held the full attention of the ruling class. Communication between Western and Eastern Bolivia was atrophied by its geography and the ruling class’ lack of desire to unify the country.

When the silver mines were exhausted at the beginning of the 18th century this did nothing to alter the supremacy this region had over the others and La Paz became ever more and more important. By the end of the 19th century tin marked the beginning of a new mining era which, from Oruro, led to the construction of railways to facilitate access, by means of the Pacific, to markets in the northern hemisphere. The power of the Spanish crown developed at these altitudes, as did that of the tin barons (Patiño, Aramayo and Hoschild). In 1952 mining was nationalized under Paz Estenssoro. The results achieved by this were awful and n 1985 ended the nationalization.

Today silver and tin don’t have the economic importance they had in times past. Zinc has taken to the forefront among the Altiplano’s main mineral exports (456 million dollars in 2007). Exports such as antimony and gold are carried out mostly by small and mid-sized companies. In 2007 the mining sector exported a total of 1.047 billion dollars, as compared to 2.268 billion in oil and gas (2 billion of this was gas).

Despite Bolivia’s treasury savings, this hasn’t been enough to absorb the risks of mining and since 1985 the country’s governments haven’t done much to encourage the development of private mining, as might be expected. However, currently there are two projects being promoted: El Mutún (iron and manganese) in Santa Cruz and San Cristóbal (silver, zinc and lead) in Potosí. The latter project would again inject value into the great Altiplano historical mining region.


Behind the Andes highlands are extensive plains, ignored by the central government: Pando, Beni and Santa Cruz cover 59% of Bolivian territory. The disregard shown by the national governments led the inhabitants of Santa Cruz to cry out for federalism at the end of the 19th century. This movement was cruelly suppressed and its main founder, Andrés Ibáñes, was shot to death.

In the 20th century, in 1924, petroleum was discovered in Tarija and three years later in Santa Cruz. Slowly these departments began to capture the interest of the central government. During the Chaco War (1932-1935) the national authorities were obligated to pay more attention to this area; however, it remained isolated from the rest of the country with no roads or railroads. The ruling class of Santa Cruz had already expressed its demands in a prophetic and celebrated memorandum sent in 1904 during and also during an uprising in 1924 demanding the central government pay attention to the region which, in addition to other things, demanded the construction of a railway to connect Santa Cruz with the rest of the country.

The railway which was to have united the West with the East was never built. The first road to connect Cochabamba with Santa Cruz was completed in 1954 during Victor Paz Estenssoro’s first term, and this was done with funding from the United States government. Meanwhile railways to Argentina and Brazil were built.

The ruling class of Santa Cruz, motivated by its accentuated regionalism (due both to its geographic location and the central government's abandonment of it) understood that certain conditions gave it the ability to overcome these delays in its development (the region was producing oil and gas but getting none of the profits) and so Santa Cruz fought to attain an 11% royalty from the production of oil, finally obtaining it in 1957.

Winning this battle for petroleum royalties didn’t come without a cost. During the government of the MNR (Movimiento Nacionalista Revolucionario) in 1958 armed indigenous militias and miners invaded the city committing atrocious acts, such as the execution of Terebinto, and cruelly exterminated those who opposed the government. These actions have left very deep wounds in the historical memory of the inhabitants of Santa Cruz.

The investment of resources from these royalties in infrastructure aided in the development of Santa Cruz which, in addition to oil, produces soy (2) (which it exports by river to Paraguay), lumber, sugar, cotton, cattle, and soon iron ore.

(2) Santa Cruz is among the fifteen top producers of soy in the world.

Santa Cruz has the highest level of literacy and the greatest number of computers per capita in Bolivia. Although its poverty level is now the lowest in the country, poverty is now on the rise as Santa Cruz is the region which now accepts the greatest number of immigrants from the Andean and sub-Andean departments.

Having attained these important royalties and, more recently in 2005, its autonomy, are two important benchmarks in the history of Santa Cruz. The position Santa Cruz takes on the subject of autonomy is accompanied by other departments that comprise what has come to be known as the “Media Luna” or (half moon): Pando and Beni (which aside from Potosí are the poorest departments in the country) and Tarija.

In Eastern Bolivia the departments of Santa Cruz and Tarija (which has the second largest gas reserve in South America, located in the Chaco region) are now the current most powerful engines of development in Bolivia. We should add to this Chuquisaca which (like Cochabamba and Tarija) is located in the Inter-Andean valleys and also has a large chaco region which separates Santa Cruz from Tarija. Located along the border with Paraguay, the important gas fields that have been located in this department could make it the second largest producer of gas in the country.

That capital of Chuquisaca is Sucre (formerly known as Charcas) and Sucre is the constitutional capital of Bolivia. However, in practice it is only the seat of the Supreme Court. Leaders of this department want the national government to be brought back to Sucre.

The oil and gas producing departments feel jeopardized by the current national government’s economic policies. Lack of fulfillment of the agreements made with Argentina for gas exports have limited their growth as they receive fewer royalties for their development. What is worse, the government public spending is covered mainly by the current and potential future royalties of these gas exporting departments.

Within this general panorama the complicated geography of Bolivia continues to place a limit on understanding between the regions.
Add to this the lack of infrastructure that contributes to their isolation and accentuates the differences between native groups, mestizos and whites.

Cultural inequality is obviously linked to economic growth and the distribution of wealth; and growth (which is dependent upon natural resources such as mineral, hydrocarbons, and fertile land for agriculture) is dependent upon the ruling class to invest in them and distribute them fairly.

This is the mosaic of old and new interests in Bolivia and the balance of power appears to be leaning toward the East. If this should happen, the predictions of Bartolomé Mitre (who wrote this in 1871) may come true: “Bolivia’s future is not in the West, but where the sun rises … therefore the country looks toward the East for the air, space and light it lacks due to the loss of its Pacific coast.”

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