Will oil and gas lift Bolivians out of poverty?
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Will oil and gas lift Bolivians out of poverty?

In the last six months, the Bolivian government has overhauled laws governing national parks to enable oil and gas exploration in protected areas.

These changes have faced fierce opposition from both environmentalists and affected indigenous communities. Groups such as the Assembly of the Guarani People immediately voiced their opposition against any extractive projects in their territories.

In the face of such resistance, the ruling MAS party has remained staunch in defense of its plans.

In a speech at the start of July, Vice-President Álvaro García Linera highlighted a “creative contradiction” between environmental protection and Bolivia’s need for resources. This tension, he argued, can be harnessed to propel the country’s economic and social development.

“Societies like ours, with high levels of social debt, need as a matter of urgency a set of material and financial resources in order to construct schools and hospitals, improve salaries, and so on. For this you need to transform nature and promote extractive mechanisms,” he said.

Poverty and payment schemes

MAS’ success in this area has been remarkable. A 2014 UNDP report  indicated that extreme income poverty fell from 38.2 percent in 2005 to 25.4 percent in 2010, while moderate poverty fell by 10 percent to 49.6 percent countrywide.

Measures such as the ‘Dignity Income’, an annual payment of around $434 paid to people over 60 without any pension, along with direct payments to children who remain in education and mothers who participate in postnatal care, have had a huge impact on some of Bolivia’s most vulnerable people.

More recently, the IMF projected a growth rate for 2015 of 5 percent, the third highest in the Americas. Even the Financial Times was moved to label Morales “the world’s most successful socialist.”

Past successes such as these were generated primarily by the redistribution of the country’s natural resource wealth.

The need to continue – and the desire to increase – this flow of money from oil and gas has led Bolivia’s government to sacrifice certain protections for the country’s national parks.

Extraction vs. environment

“It’s a process of consolidation of an economic model fundamentally based on extractivism,” Jorge Campanini, researcher in natural resources at Bolivia’s Documentation and Information Center commented.

“The necessity to fulfil our export commitments, particularly to export gas to Brazil and Argentina, and the possibility to move into new markets, has driven the government to seek new supply.”

Extractivism refers to an economic model centered on the extraction and sale of raw materials such as oil, gas and minerals. In Bolivia, more than 60 percent of exports are hydrocarbons or minerals, a percentage which looks set to rise.

The environmental dangers of this – allowing heavy machinery to rip down trees and churn up soil in some of the world’s most fragile and bio diverse ecosystems – are obvious, even if the long-term consequences aren’t as immediately apparent.

But while it is this damage that preoccupies environmentalists, others point out further social and economic risks associated with economies reliant on extractivism – risks that threaten to undermine MAS’ justification of tackling poverty.


Decades of research have shown that resource wealth alone does not necessarily lead to growth. On the contrary, it can corrupt governance, weaken other industries by strengthening a country’s currency (known as ‘Dutch disease’), and, in Campanini’s words, “focus attention on the reserves of gas that we have, so it’s very difficult to map out a process of diversification.”

MAS have always stated their intent to overcome Bolivia’s reliance on resource wealth. But the dramatic expansion of extractivist projects into national parks suggests that, at least for the foreseeable future, the government is extending rather diminishing the role of extractivism in the Bolivian economy.

It’s a position that critics have labelled ‘neo-extractivism.’

What particularly concerns analysts such as Campanini is that they are not seeing the government investing in projects that will help Bolivia escape extractivism even in the longer term.

There is some diversification within the hydrocarbons sector itself, with processing plants being built in Bolivia – for example, a huge lithium factory destined for the spectacular Uyuni Salt Flats.

But beyond that, Campanini argues, “we are not spending the proceeds on infrastructure that is going solve concrete problems such as water, or access to electric light, or long-term unemployment. We are spending it on football stadiums, on union buildings, even in some cases on the building of schools which don’t have teachers, or hospitals where there aren’t any doctors.”

Such projects provide immediate benefits, or at least palpable signs of action for the communities from whom MAS draw their support. But while such projects might help keep MAS in power, they do little to help Bolivia diversify its economy beyond a reliance on minerals and hydrocarbons.

If Bolivia’s government really has abandoned its conservationist environmental stance, then there is perhaps validity in the argument that rich countries should shoulder the burden of tackling climate change, while others focus on reducing poverty.

Part of this validity comes from MAS own success in tackling social exclusion.

But with the expansion of extractivist industries into national parks, the party is following a treacherous path, not just in terms of the environment, but economically and socially too.

“This is putting at risk the future of the country in the medium-to-long-term,” says Campanini. “We’re reaching a critical situation.”

Liked this article? You can read the first two parts here:

Bolivia: who wins in Evo Morales’ battle between environmentalism and extractivism?

Bolivia: “it’s our right to conduct exploration in protected areas and we are going to do it aggressively,”