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To comprehend the dimensions of the conflict related to the Bolivian lithium program, it is important to understand Bolivia as a heterogeneous and deeply divided society while situating lithium industrialization in a long history of economic dependence on natural resource extraction. Since the Cerro Rico, the “rich hill”, was discovered near the city of Potosí in the sixteenth century, Bolivia has exported resources, exploiting first silver, then tin and rubber, and now mostly gas. The country is rich in natural resources. In addition to the world’s largest lithium resources, it owns the second largest gas fields in South America57_{, and has important reserves of tin, silver, zinc, tungsten,}

lead, boron, gold, and bismuth (Vasters et al. 2010, 92). Not yet exploited are potential reserves of cadmium, chromium, indium, iron ore, nickel, palladium, platinum, and tantalum (Wacaster 2016). In 2013, eight percent of tin, five percent of silver, three percent of antimony, and three percent of zinc production globally came from Bolivia (ibid.). Yet, while Bolivia has nearly 500 years of mining history, it has no notable industry and predominately exports raw materials (PIEB 2014). In 2010, primary commodities accounted for 24 percent of GDP and 73 percent of exports (Rodrigues- Silveira 2014). Bolivia has one of the highest proportions of resource exploitation and fiscal dependency on natural resources and the worst performance on resource governance indicators in Latin America (ibid., 19–20).

Bolivia, which has a population of 11 million, is a diverse society with large social, cultural, and economic differences between regions and peoples. More than 60 percent of Bolivians are indigenous, belonging to one of 36 autochthonous nations. 30 percent of the Bolivian population auto-identifies as Quechua, 25 percent as Aymara (Bertelsmann Stiftung 2016, 3), while about 470,000 people belong to smaller lowland indigenous nations (Farthing and Kohl 2014, 9).58 _Bolivia

57 _{These, however, only make up 0.2 percent of global gas reserves (Radhuber 2013, 134).}

58 _{Both quoted sources refer to the national census data of 2001. In the 2001 census, 62 percent of the population}

(older than 15 years) self-identified as indigenous (Instituto Nacional de Estadística 2015). The last Bolivian census of 2012 only registered an indigenous adult population of 41 percent (Instituto Nacional de Estadística 2015). When the census data was published, this provoked a controversy. In response, esteemed historian and ex-President Carlos Mesa concluded that “Bolivia is not an indigenous country by majority, but undoubtedly a country with a very important indigenous presence”, while other authorities such as the Minister of Culture, Marko Machicao, emphasized that the numbers do not challenge an indigenous population majority (Schipani and Mander 2015). Observers have highlighted that the drop in numbers can be assigned to technical shortcomings of the census which did not comply with UN standards. Moreover, the 2001 and 2012 surveys are, in general, incomparable as they were based on different types of questions (Tabra 2013). For a comparison of census data see CEDIB (2013b).

is divided into nine departments, 112 provinces, and 339 municipalities. Geographically, the country is comprised of eastern lowlands and western highlands.59 _{Bolivia’s geographic diversity has affected}

its social and economic development. The highland region is marked by mining and subsistent agriculture in inhospitable areas, while the lowland provinces profit from important gas fields and good soil for agricultural production. The agrarian reforms after the Revolution of 1952 abolished the hacienda system in the highlands but supported the rise of large agricultural industries in the Bolivian lowlands, the Crescent Region60_{, mostly dominated by elite landowners with hardly any}

indigenous participation (Mesa, Gisbert, and de Mesa 2003, 650–659). In the Crescent Region, parallel centers of economic and political power developed vis-à-vis the seat of government in La Paz. Historically, culturally, and geographically anchored differences between the Bolivian lowlands and highlands have become more visible since the election of Evo Morales and his party MAS- IPSP61 _{in December of 2005 (Bertelsmann Stiftung 2016). In his first term in office (2006–2009),}

Morales’ highland-based movement had to confront significant resistances from the Crescent Region in the Constitutional Assembly over gas rents, which resulted in lowland demands for regional autonomy.

As has been discussed, the MAS government is considered part of the “pink tide” or “new left” in Latin America. With its “socialism of the 21st century”, MAS has been a defining example of “new left” politics oriented towards the marginalized, indigenous population majority.62 _{It supported}

59 _{Bolivia is a decentralized republic composed of departments: La Paz, Oruro, Potosí, Tarija, Chuquisaca, Santa}

Cruz, Cochabamba, Beni, and Pando. The nine departments are governed by prefects elected every five years. They themselves are made up of 112 provinces administered by sub-governors and 339 municipalities governed by a mayor and a community council. Additionally, the Constitution (Art. 269 I) created the possibility to form Indigenous Original Peoples’ Peasant Territories (AIOC) (see Chapter 5.4.4).

60 _{The lowland provinces of Santa Cruz, Tarija, Pando, and Beni are jointly referred to as the Crescent Region (media} luna). Sometimes Chuquisaca is also considered part of the area. The Crescent Region holds the main deposits of

fossil fuels in Bolivia; 85 percent of gas reserves are in Tarija. Other sources of income include large agricultural industrial complexes (particularly in Santa Cruz) for soy, cotton, cattle, and sugar. Autochthonous population segments are smaller in the lowlands than in the highlands (e. g. 20 percent of the population in Tarija) and distributed over many different lowland peoples (Weisbrot and Sandoval 2008).

61 _{Movement towards Socialism – Political Instrument for the Sovereignty of the Peoples (Movimiento al Socialismo –} Instrumento Político por la Soberanía de los Pueblos); the political movement or party of Evo Morales is often only referred

to as MAS. Whether the MAS can really be considered a party is debatable, as it conserved union features without consolidating hierarchical party structures (Farthing and Kohl 2014, 14–15). According to Farthing and Kohl (ibid.), the MAS merges three competing philosophies (more or less successfully); indigenist, Marxist, and popular nationalist ideologies. Based on an electoral majority (the first since the reestablishment of democracy in 1982), Evo Morales was elected president in December of 2005. He took office in January of 2006.

62 _{Thereby, MAS politics have frequently been referred to as “populist”. There is an intense debate in the political}

sciences about the content of the term “populist” and the assignment of regimes to this group. Panizza (2005) outlines that the definition of “populist” is complicated by the fact that it may include diverging and contradictory (democratic and anti-democratic) political beliefs, while hardly any regimes described by the term will auto-identify as such. Most definitions of “populist”, however, concur that the term refers to a regime that discursively emphasizes a

political reforms, including the drafting of a new Political Constitution of the State (CPE), which was enacted after a national referendum in February 2009. The CPE redefines Bolivia as a pluri- national state. The idea of pluri-national, in comparison to “pluri-cultural” (as stated in the Constitution of 1994) is that the different cultures and languages in Bolivia stand equally beside each other. As Garcés (2011, 52) underlines, this ideology “would be a pathway towards self- determination (auto-determinación) as nations and peoples who would be able to define their own judicial systems” [highlights in the original].63 _{The Constitution seeks to create a plurinational state}

by acknowledging diverse systems of production (such as communitarian economies), institutionalizing ‘‘indigenous originary peasant nations and peoples” (pueblos indígenas originarios campesinos, compare Chapter 5.4.4) and making the concept of “vivir bien”64 _{the basis of policy making}

(CPE, Art. 8 and Art. 306). Especially because of this latter aspect, “among post-neoliberal visions, the pluri-national state project had the clearest anti-extractivist dimension (Andreucci and Radhuber 2017, 8).”

After the elections in 2005, expectations for the new government were high, with some indigenous groups seeking a pachakut’i, a revolution that changes the societal foundation (Farthing and Kohl 2014, 17). Undeniably, the country’s first indigenous president has promoted indigenous political integration. His initiatives included the possibility of establishing indigenous autonomies, the recognition of the right to an intercultural education, the legalization of the coca leaf, and a requirement for public servants to learn an indigenous language. The 2009 national elections saw a historic surge in indigenous political representatives (Robb, Moran, Thom, and Coburn 2015, 8). During his first term in office, Evo Morales put emphasis on the national and international arena on the importance of indigenous and environmental rights.65 _{For example, in 2007, he made the}

divide between the “sovereign people” (which it represents) and an opposing group that symbolizes the status quo and the preexisting, dominant ideology (Deiwiks 2009). In this sense, populist can be used to describe some (yet certainly not all) “new left” regimes, which rose in opposition to political elites that had facilitated neoliberal structural adjustment and seek to represent the marginalized population majority.

63 _{Garcés (2011), however, argues that pluri-nationalism as originally envisioned by indigenous organizations was}

tamed by the Constituent Assembly and that the new Constitution does not entail more than a minor support for indigenous participation in political decision-making.

64 _{The good life – sumak kawsay or vivir bien (buen vivir in Ecuador) – denotes an alternative Andean form of living}

critical of excessive orientation towards economic growth. It was anchored as a basic principle in the Ecuadorian and Bolivian 2008 and 2009 Constitutions, respectively. The idea of vivir bien stresses, in contrast to the Western societal orientation towards individualism, the importance of communal life in harmony with mother earth as a basis for development. Development is not understood as purely economic, but as a component of wider societal change (Cortez and Wagner 2013).

65 _{This is seen in his frequent repetition of the slogan “pacha mama or death”. The Quechua and Aymara word pacha,}

while usually translated as earth (also world, cosmos), simultaneously refers to time and space (Farthing and Kohl 2014, 24). As Fabricant and Gustafson (2011) point out, the pachamamismo is an important building block of the

United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) a domestic law (Law Nº 3760 of 7.11.2007), giving indigenous peoples and nations the right to prior consent to extractive projects (later qualified by the new mining law; see Chapter 4.4). He also advocated far- reaching environmental rights, culminating in an own legal personality of mother earth (pacha mama), established in 2011 (Canessa 2012).66

The heterogeneous MAS that paved Morales’ way to the Presidency should not be understood as an indigenous or “ethnic” movement (Fabricant and Gustafson 2011; Schildt 2007). While Evo Morales’ personal background helped him rise as an identification figure for the indigenous, particularly Andean indigenous, population, the MAS has always strongly catered to the interests of its base of coca growers as well as subsistent farmers, mining cooperatives, neighborhood organizations, and transport workers. These actors are often ethnically indigenous but do not always identify with their cultural traditions and ways of life (Canessa 2012). They supported the MAS not based on indigenous values but because of their mutual resistance to neoliberalism, privatization, and market opening to transnationals. Large mobilizations since 2003 brought the MAS into political power. It was only then that the organization emphasized an indigenous agenda and utilized Andean symbolism. In the so-called “process of change”, its discourse was both nationalistic and ethnic and could therefore unite the population majority not represented by traditional political parties (Quiroga Trigo 2014). The MAS thus serves as an umbrella organization for very diverse social actors and, following Moira Zuazu (2009), should be understood as a heterogeneous movement that emerged in times of a fundamental crisis of the state by catering to a revolutionary nationalism deeply anchored within the Bolivian society.67

While the Constitutional Assembly and the pluri-national ideology made Morales popular with the indigenous population majority, his nationwide electoral success is also strongly connected to the country’s exceptional economic performance during an unprecedented resource boom. Between 2006 and 2012, mining generated annual average export values of 2.26 billion USD, a 448 percent increase compared to the period between 1995 and 2005 (Andreucci and Radhuber 2017, 6). In 2013, the economy grew by 6.8 percent and was one of the 25 fastest growing countries in the world

decolonial agenda of the MAS government. They also warn that this is a risky strategy, prone to the reduction of indigenous complexities to an easy “catch-all solution to the ecological and social challenges of capitalism” (ibid., 13).

66 _{Through the Law on the Rights of Mother Earth (Ley de Derechos de la Madre Tierra),Law Nº 071, 21.12.2010.} 67 _{Zuazu (2009) compares this to the rise of the Movimiento Nacionalista Revolucionario (Nationalist Revolutionary}

(Central Intelligence Agency 2014). Particularly gas revenues increased from 287 million USD in 2004 to 1.6 billion USD in 2007 (Kaup 2010), 2.8 billion in 2010 and 6 billion in 2014 (Strategic Forecasting, Inc 2015). This growth was, besides high prices before 2014, also related to the renegotiation of gas contracts by the Morales administration in 2006 and tax increases under his predecessor Mesa.68 _{This resource boom as well as active social spending and massive public}

investments supported a notable improvement of living conditions and a decline in poverty.

Between 2005 and 2014, per capita GDP increased from 4,415 to 5,760 USD (PPP) (UNDP 2016) and poverty69 _{declined from 60.6 percent to 39.3 percent (World Bank 2016), while income}

inequality was reduced below Latin American average (Bertelsmann Stiftung 2016, 13). The reserve assets soared to unprecedented 15 billion USD (nearly 50 percent of GDP) and provided the government with the funds to increase public spending (ibid., 16).

Socio-Economic Indicators 2005 2010 2014

GDP* (in billion USD) _{9.55 19.65 33.2} (2015)

Per Capita Income* (2011 PPP USD) _{4,415 5,054 5,760}

GINI Coefficient** 58.5 49.6 (2009) _48.1 (2015)

Poverty** 60.6 % 45 % (2011) _{39.3 %}

Live Expectancy* 64 66 68

External Debt* (% of GNI) _{75.3 % 32 % 27.5 %} (2013)

Table 4: Social and Economic Indicators for Bolivia (2005–2010)

* Human Development Indicators of the UNDP (2016) ** Open Data of the World Bank (2016)

The increasing independence from international financial mechanisms allowed the MAS government to invest in expensive industrialization initiatives, such as the lithium program, as well

68 _{The literature frequently talks about a nationalization of hydrocarbon resources under the Morales government but}

this is not the right term. Also under previous regimes, the natural resources were property of the state. The

government of Sanchéz de Lozada (called Goni) had, however, given private companies control over hydrocarbons in the moment of extraction (Supreme Decree Nº 24806, 4.8.1997) (Kaup 2010). The Morales administration redeemed the decree and mandated the negotiation of new contracts (Supreme Decree Nº 28701 “Heroes del Chaco”, 1.5.2006) but did not expropriate the private companies active in the sector (In these contracts, state oversight and an exclusive commercialization right for the state petrol and gas company YPFB was established and royalties were increased. For some sites, the state share of the revenues was raised from 50 percent or 60 percent to 75 percent and 82 percent; while for other sites previous conditions were kept (Behrens 2006). A substantial increase of royalties from

18 percent, established in 1997, had already been implemented under the government of Carlos Mesa (ibid.). Yet, the regulatory changes under the Morales government did not affect the nature of the Bolivian hydrocarbon sector which is still dominated by transnational companies that profit from structures implemented in the neoliberal era (Kaup 2010). Kaup (ibid.) consequently speaks of a “neoliberal nationalization” of the Morales’ administration and also more radical fractions within the MAS movement were very critical of foreign companies not having been expropriated (Farthing and Kohl 2014).

as in poverty reduction campaigns. Social programs include the introduction of a public pension and cash transfers for school children and mothers, financed partly by the public oil and gas company YPFB and the mining corporation COMIBOL.70 _{The minimum wage was increased by}

40 percent since 2006 (Schmalz 2013, 57), public infrastructure was extended, and basic services for the poor were subsidized (Radhuber 2013). Resource money thus secured what the Bertelsmann Stiftung (2016, 3) calls a “project of neo-developmentalist71 _{modernization that combines a focus}

on state-led, socially inclusive development, characterized by high levels of public investment and an active social policy, with countercyclical macroeconomic policies.” Because of the resulting positive economic effects and a reduction in poverty levels, the governing MAS and President Morales have long enjoyed widespread and relatively stable public support. In October 2014, Morales was re-elected securing the two-thirds parliamentary majority the MAS held since 2009 (ibid., 29).

Yet, as Radhuber (2013, 261–264) outlines, these cash-transfer initiatives target population segments selectively and do not contribute to structural changes in the social systems which remain highly fragmented and underdeveloped. Moreover, as will be outlined in the subsequent chapters, the continued economic orientation towards resources as economic backbone exposes inconsistencies in MAS policy making; an expansion in extractive initiatives contradicts environmental protection and indigenous sovereignty over land as advocated by the Constitution. These discrepancies resulted in a breach within the miscellaneous MAS power base. Critics also

70 _{The state minimum pension Renta Dignidad, which was introduced in 2008 as a tool for poverty reduction, offers a}

public retirement benefit even for those not insured through social security. The benefit is financed to 27 percent from a direct tax on oil and gas (Pellegrini and Ribera Arismendi 2012). The total cost amounted to 255 million USD in 2011. In this context, it needs to be noted that a similar program, the state pension Bonosol, was introduced in the first government of Sanchéz de Lozada. It was abolished under his successor, Banzer, and then reestablished in a much smaller version during the second Goni Presidency (Mesa, Gisbert, and de Mesa 2003, 765–779).

The program Juancito Pinto, introduced in 2006, is an annual cash benefit paid to families whose children attend 1st to 8th grade. The cost reached approximately 52 million USD in 2010 and is partly covered by YPFB and COMIBOL (Radhuber 2013). Introduced in 2009, the Juana Azurduy program provides cash benefits for pregnant women, pre- and post-natal health services, and the care for children under two years of age (ibid.).

71 _{Neo-developmentalist refers to the developmentalist approach followed by Latin American countries from the}

1940s to the early 1970s. Desarrollismo as the predominant economic strategy was based in the idea that technological innovation, entrepreneurship, and consumption are key components of development, while external factors are irrelevant. This linear modernization agenda was widely challenged by the Latin American dependency school (most importantly Prebisch 1949 and Dos Santos 1970). This school outlined the significance of the position of the region in the global economic system (in which industrialized countries control e. g. technology and prices) and the existing dependence structures between Latin America, the periphery, and the industrialized countries, the core (see

Wallerstein 1976; Galeano 1979; for a summary see Halperin Donghi 1991, 496 et seqq.). In line with the

interpretation of the Bertelsmann Foundation above, neo-extractivism research argues that “pink tide” governments such the MAS in Bolivia are again strengthening these extractive enclave economies as a basis for socioeconomic development, reviving the developmentalist agenda (Gudynas 2013, 2015a; Svampa 2012, 2013).

comment on the selective or divisive nature of MAS policy making, saying that it privileges indigenous over non-indigenous Bolivians, MAS followers over the independent civil society, and highland indigenous interests over the demands of lowland peoples (Canessa 2012; Radhuber 2013). Since 2015, these emerging perceptions seem to affect Morales’ electoral results. After losing support in the 2015 regional elections in February 2016, the president lost a referendum that would have allowed him to run for another term in office. This can also be linked to a love and corruption scandal involving Morales personally (Londoño 2016).72

Also, resource prices began to decline after 2012, reducing the government’s income stream. By 2013, the value of mineral production had decreased by 18 percent compared to 2012 (Wacaster 2016). The market for most Bolivian minerals, including silver, tin, zinc, lead, and tungsten tumbled. Silver prices, for example, dropped from an all-time high of over 4,000 USD (per fine ounce) in 2011 to 1,730 USD in June 2016, which is similar to price levels during the crisis in 2007 and 2008 (Index Mundi 2016). Tungsten dropped from more than 50 USD per kilogram in 2012 to 27 USD in June of 2016 (InfoMine 2016). Also, gas prices have declined and productivity of Bolivian hydrocarbon fields has considerably lowered (Chavéz Rodríguez, Szklo, and Lucena 2015). These price drops have a direct effect on the budgets of the central, departmental, and many local governments. While mining rents had already declined by 23.9 percent between 2014 and 2015, they continue to diminish in 2016. Rents were 18 percent lower in the first trimester of 2016 compared to the previous year.73

This links back to the theoretical discussion on price volatility in the resource sector which is exacerbated by the low tax regime in Bolivia that is traditionally compensated for with income from commodities (Held 2013). In the light of declining prices, how well prepared the Bolivian economy is to confront a negative price shock and how long popular cash-transfer and investment programs