Bolivia, a mega diverse country

1. Seminar Scrutinising Success and Failure in DevelopmentA short story about how to create a broad based rural development (una economia de base ancha) in BoliviaKoos Michel, OxfamnovibDecember 2007

2. Bolivia, a mega diverse country

3. BOLIVIA TIENE UNA ECONOMÍA RURAL DIVERSA Bolivia: Tenencia de la tierra por actor • En el campo existen economías comunitarias, campesinas y empresariales • Las economías comunitarias y campesinas son productoras de alimentos • La economía empresarial ha crecido pero vinculada a los mercados externos • Las tierras y bosques más productivos de las tierras bajas están en las manos de las elites agrarias Fuente: Matsuzaki (2005) y Pacheco (2006

4. Short history Rural Development Bolivia1 • From 1985, Tin crisis, complete reversal of government policies: • Adoption of Washington consensus • Liberalisation of imports • Privatization of state enterprises • Ending subsidies for inputs, production • Ending State Agricultural banks and subsidized credits • No more Technical Assistance Production • No more State financing technical research, plant breeding • Withdrawal State from production sphere. • Promoting private investments • Complete market driven development

5. Short History Rural Development Bolivia2 Highlights from 1985-2005 • 1991 Recognition in Constitution of Bolivia as multi-ethnic state (but without measures for better integration). • 1995 Law for popular participation, strong decentralisation with formation of 214 municipalities with 20% of government revenues • 1995 Law INRA for land reform, in fact a law for land registration, but in the following 10 years bad execution and growing conflicts.

6. Short History Rural Development Bolivia3 • 1990-2004: - Strong private investment oil and gas exploration • Stagnating agricultural production in highlands • Growth of medium/large agricultural enterprises lowlands Santa Cruz (1000-50.000ha), mainly based on land elite and soya cultivation and cattle ranches • Growth poverty and strong urbanisation (El Alto-poor rural migrants) • Chronic indebtment, unsustainable debts • Informalization of the economy (18% formal labour contracts) • Bolivia – donor darling (~ US$ 800 million/year) • 1999-2003 economic crisis, popular uprisings (water war, gas war, government crisis, malfunctioning parliament)

7. Oxfamnovib rural support Boliva • Support in the ninetees: • mainly support to large established NGOs (~ 4 million Euro/year) • support beginning producers organisations • focus rural integrated development, local and regional level • capacity building, investment production means, irrigation, technical assistance production, empowerment peasants and indigenous population for basic rights and land rights • strong support micro-finance institutions Evaluation 2002 (Bebbington report Andes, effects Dutch CFOs): • limited effects, no replication, failure in development !? • changing livelihood stratregies, 40% non-agricultural rural incomes through migration, commerce, off-farm labour income, urban connection • no attention for marketing, demand driven production, access markets • adverse macro-policies, contracting internal market, lack agric.policies

8. Oxfamnovib rural support Boliva2 • 2002-2007 OxfamNovib (and other CFAs) changed policies: • Much more emphasis on policy influencing and campaigning: Make Trade Fair, develop counterparts lobby capacity, look at national rural policies • More importance markets and demand driven production as starting point, take value chains and creation of added value for producers. • More research livelihoods, income sources, gendered analysis, labour rights, migration, urban-rural linkages. • More support producers organizations • Continuous support micro-credit institutions • Some Results Rural Development Bolivia last years: • Growth soy production by large and small producers lowlands • Continuous stagnation production/incomes highlands+ valleys • some successes – quinoa chain (support Dutch governm.+CFAs), milk production, castaña (brasil nuts), oregano • Government procurement: decentralised subsidized buying from small peasants, for schoolbreakfast program vulnerable groups • Continuing migration (Argentina, Brasil, others)

9. Exemple research:Composition of Income Peasants various regions Bolivia Source: Cipca 2005

10. Bolivia, government Evo Morales,2006-07 • Symbolic significance indigenous majority in power, (absolute majority vote MAS) • Economic boom, high prices petroleum/gas, and minerals. • Renegotiation oil and gas contracts, recognition rights indigenous people, massive increase government income. • Surplus on balance of payments • Modification of law land reform (INRA), reinforcing indigenous rights on land, and better procedures • Stagnation new Constitution and Constitutional Assembly.

11. Analysis rural development new government Bolivia: EL MODELO DE DESARROLLO RURAL ESTÁ EN CRISIS • Las capacidades del Estado se han debilitado • La inversión pública ha acentuado las desigualdades regionales (infraestructura y servicios) • La apertura de mercados ha beneficiado a la agricultura empresarial y ha desprotegido a la agricultura familiar • Una mala distribución del ingreso entre grupos que logran acumular y una gran mayoría que vive en la “pobreza” • Los sistemas productivos andinos enfrentan una crisis de productividad por el deterioro de los recursos • La agricultura empresarial tiende a concentrar la tierra, tiene baja demanda de mano de obra y su inserción en los mercados externos es bastante frágil • Los ecosistemas, biodiversidad, bosques y suelos están siendo amenazados por una lógica económica extractivista

12. Una visión integral del desarrollo rural • Desarrollo del papel protagónico del Estado • Promoción de la participación y la autogestión social • Gestión sustentable de la tierra, bosques y biodiversidad • Potenciamiento del rol recursos naturales para el desarrollo rural • Reversión de la baja inversión pública rural • Revalorización de los cultivos estratégicos • Meaning: Strong government intervention: state bank productive development, state companies, importance basic food crops Bolivia 2006-07:Complete reversal government policies

13. Oxfamdebate:The theoretical debate, New Institutionalists vs the Liberalisers Source: based on Dorward, Kidd, Morrison & Urey (2004)

14. Relevance key questions seminar • What are the key informal and formal institutions influencing the situation (in the case study)? • It seems to me that capacity building by civil society organisations in the past 20 years (in the sense of a “complex, human process”, that “involves shifts in power and identity” and is “endogenous”), in short empowerment of indigenous and peasant organisations, and the building of informal “institutions” between them has been crucial in the transcendental changes occurring now in Bolivia. • 2. How could using a Theory Change (making the underlying assumptions about the logic of change explicit) help the change process? • 3. How can Capacity Development better integrate institutional analysis and theories of change? • Difficult to say. We (as donors) have underestimated the deep discrimination and exclusion mechanisms embedded in the institutions in Bolivian society, and now we witness changes that are out of our control. We could not foresee these effects of our capacity building. We want to help the change process, we hope for a peaceful change process, but it can easily turn into a bloody conflict between groups. • I don’t believe in Theories of Change as approach for planning of change. Change processes as multi-layered, non-linear deep change of power-relations cannot be planned.