issue 173 - July 1987
The illegal drugs trade is 'informality' taken to its extreme.
Today cocaine earns Bolivia as much as its entire formal economy
and provides a livelihood for one family in six. Neil MacDonald
looks at the havoc this is creating in a coup-prone land.
'WAIT!' A ragged and hectic chorus fills the air.
The driver swears but brakes as yet another tin-mining family climb aboard the truck already bulging with people and their belongings.
In the background the bleak, craggy, high Andes landscape of Potosi - the mining heartland they are abandoning.
The families are heading off for the only place where they can make a living these days: the jungle area of Chapare in Cochabamba province. Their future: to work as cocaleros - coca leaf growers, cocaine paste makers or just humble pickers.
In the middle years of this century Bolivia produced one third of the world's tin. Now, in Chapare, it produces 40-45 per cent of the world's supply of cocaine. 'We are being transformed from a nation of producers into a nation of smugglers and drug traffickers', said one miners' leader.
The world price of tin collapsed in 1985, plummeting to less than half of what it costs Bolivia to mine it. By the end of 1986 about 70 per cent of the 27,600 miners employed by the state mining company COMIBOL had been made redundant as mines shut down.
In view of this, the drugs trade looks like a godsend. It is not. For Bolivia and its miners it means the loss of hard-fought-for democratic rights and freedoms and the emergence of a new era of lawlessness, inequality and poverty.
While the rest of the Bolivian economy slumps and the poor actually get poorer, the coca-barons are doing well. Their BMW cars purr through the streets of the capital, La Paz. Foreign imports such as colour television sets and hi-fi systems cram shop windows, catering to demands for conspicuous consumption. Around the city of Santa Cruz, architects and builders thrive on contracts for luxury mansions.
As demand for the drug has grown in the developed North, cocaine production has skyrocketed - up 600 per cent since 1980. The Foro Economico, a Bolivian think-tank, estimates that cocaine exports in 1985 reached a value of between $2 billion and $3 billion. This figure is all the more staggering when put in context: it is over four times the value of all Bolivia's other export earnings that year and about equal to the entire country's official gross national product.
The collapse of tin and the rise of cocaine is turning Bolivian society upside down. The drug mafia have become a new economic elite, beyond government control. And the mining communities, for decades the only real counterweight to a coup-prone army, are disappearing.
The combativeness of the tin miners is legendary. In a 1952 revolution they overthrew a military regime and won nationalization of the large mines under workers' co-management Units of the army were dismantled and replaced in some mining communities by miners' militias.
Each of the half-dozen military regimes since then has eventually foundered on the strength of the miners. On many occasions the miners have fought behind barricades, sticks of dynamite in hand, as troops besieged the mines. The Bolivians talk of two powers in the country - the state and the miners.
When the tin price collapsed, the miners formulated a plan to keep the mines open under their control with reduced costs. The government rejected it. When 5,000 miners tried to march in protest to the capital last August, troops halted them, the government declared a state of siege and workers' leaders were arrested under emergency powers.
In the end, the best the miners' union could achieve was redundancy payments averaging around $2,480. Some miners used these payments to try and set up small businesses or farms. For most, however, the road from Andean mining towns like Potosi or Llallagua runs to the informal economy - as street traders in the cities or the coca farms and drug factories of Chapare.
Redundant miners are not the only ones drawn by the drugs magnet. Peasant farmers, the majority of the population, are switching from food crops to coca, which yields far higher profits, grows easily and provides four harvests a year. The urban poor also find they can make more in one night treading coca leaves in makeshift drug factories in the jungle than an office employee earns in a month in the city.
Although it keeps the economy afloat, the flood of coca dollars has brought no developmental benefit. This is because the money is not being invested productively. Most of it leaves the country to be salted away in Swiss, Caribbean or Miami bank accounts. Of the $2,000 - 3,000 million cocaine earnings in 1985, the Foro Economico estimates that only $367 million stayed in Bolivia.
Poverty is widespread, with 60 per cent of the population living below the poverty line. Bolivia has now become the second poorest country in the Western hemisphere after Haiti. A daily diet consisting of nothing more than bread and sultana water (a drink made with coffee bean husks) is commonplace.
The weak domestic manufacturing sector is reeling too: 150 factories closed last year, laying off 30,000 workers. The official rate of unemployment reached 20 per cent at the end of 1985. The final blow for many firms was the government's abolition of import duties which resulted in a flood of cheap imports.
Government response to the crisis has hit the poor in a way that has become all too familiar in the Third World. The 'New Economic Policy', an austerity package approved by the IME and World Bank, has frozen wages, raised taxes and freed prices.
There are now thousands of street children in La Paz, Cochabamba and Santa Cruz living rough without families and surviving by theft, child prostitution and drug dealing.
The New Economic Policy also has a more unusual aspect: the attempt to bring the coca-dollars into circulation. State and municipal officials have been ordered to ask no questions about the source of citizens' wealth; and restrictions on dealings in foreign currency have been lifted.
The government is clearly on the horns of a dilemma. On the one side, US aid has been made conditional on action against the drug trade. On the other, the government needs the flood of coca-dollars, which is all that stands between Bolivia and total collapse. This paradoxical state of affairs was demonstrated to British television viewers last summer by the odd spectacle of Home Office junior minister David Mellor stepping gingerly between rows of coca plants, while on a worldwide anti-drugs fact-finding tour, anxious not to offend his Bolivian government official guide by damaging any of the young plants.
Gestures at anti-drug action are made periodically by the authorities. In December 1985, for example, Interior Minster Fernando Barthelemy launched an official campaign by symbolically uprooting 40 coca bushes. Since then little more has happened. Even the landing of US troops into Chapare last year caused considerable outrage but achievements were minimal. Only the small fry are ever caught. Operations are announced 10 days in advance, giving the godfathers plenty of time to pull out.
The coca mafia have become a law unto themselves. In the east of the country they live on fortified ranches protected by private submachine-gun toting armies. Periodic gang wars break out, Chicago-style and assassinations of rivals and double-crossers are common.
One incident last September became a national scandal. Noel Kempff Mercado, a Bolivian scientist, his pilot and his guide were murdered after stumbling on a cocaine factory while on a scientific exploration in Huanchaca, Santa Cruz province. Security forces delayed 50 hours before searching the region, allowing the murderers to escape the net.
The furore grew as it was revealed that the testimony of Major Ciro Jijena of the rural guard had been supressed. He had accused the Minister of the Interior and police chiefs of taking bribes from drug traffickers. In November Edmundo Salazar, a left-wing parliamentarian who had fought to keep the case open, was murdered. The Bolivian monthly Informe 'R' in its November issue described the Huanchaca incident as only the 'tip of the iceberg'.
As in Colombia, drugs are gradually pervading every aspect of national life - from street-child dope pedlars to those in high office - and undermining any chance of effective democracy.
But Bolivia doesn't have to become a nation of drug traffickers. There is natural wealth still untapped. Only five per cent of the mineral-bearing land has been surveyed, according to a new book on the Bolivian tin crisis (The Great Tin Crash, Latin America Bureau, 1987).
But it will take international action to rescue the tin price and diversify investment. The real problem is not one of crime - US troops have anyway been ineffective in stamping out coca production in Capare. It is one of development: Bolivians need an alternative way to make a living. The rich North has yet to show the will to solve its own cocaine problem by solving Bolivia's economic problem. And it won't do that until it fully recognizes that it is poverty that provides the most fertile soil for the coca plant.
Neil MacDonald is a development journalist specializing in Latin America.
Miguel: pimp, thief, drug-dealer,
When I was six my mother died and my father went away to live with another woman. I left school and fell in with some gamines (street urchins). We would go out with catapults and shoot chickens - pow - and sell them to restaurants. We would shoplift and sell the stuff to fences in the Zona Negra. I began to go around following a teenage girl known as Crazy Eneas. Eneas was bad-tempered, carried a knife and acted like a man. When she realized I was a good thief and knew how to use a knife, she got to like me. By the time I was eight years old I was going around with a prostitute. Occasionally I earned an honest living. I sold newspapers for a bit. Then cakes and sweets for a woman. She would pay me 10 per cent commission for everything I sold. The main honest job I had during my teens was as a drummer for a piano player who worked various bars and dance halls around the Zona Negra.
Then, after a spell in prison, I took charge of a lodging house called La America. The owner had known me for a long time and asked me if I could run a brothel. I said 'yes'. He didn't care how the place was run. He just came for the money every day. All I took was the three pesos for the room. I didn't charge the prostitutes anything. I kept the rooms clean and made sure that no-one robbed or attacked the clients. To make more money I sold marijuana. It was good business. I used to buy a half pound for 400 pesos and make thousands of papelitas to sell at 50 centavos.
Then one day a man shot one of the prostitutes, Rosita. She had no family so I arranged the funeral. I paid 100 pesos for them to tidy her up and put her in a 900 peso coffin on which I paid a 200 peso deposit. Then I arranged a wake and everyone who came to the wake contributed. I rented a car and two buses for the funeral. Anyway, in the end I made 1,800 pesos on the funeral. Rosita was a bit old but she kept her body in good condition and the men liked her the best. She would sometimes do 20 in one day.
When I met Socorro everything changed I used to be wild but she reformed me. I left the lodging house and started work as a bottlebuyer. We have lived together for 11 years now and she washes bottles in the store where I sell mine.
Adapted from Casual Work and Poverty in Third World Cities by Chris Gerry and Ray Bromley. Copyright (1979 John Wiley and Sons, Ltd). Reprinted by permission of John Wiley and Sons, Ltd.
Worth reading on... UNDERGROUND WORK
There are several new books on the subject, most of which have an exclusively European or US bias. For a more wide-ranging view, Philip Mattera's Off the Books, Pluto Press, 1985, London, is probably the best, and definitely one of the most entertaining. Can I have it in Cash? by Stuart Henry takes a broader, cultural view of 'informality' which includes discussion on 'alternative' lifestyles.
Swasti Mitter's book Common Fate, Common Bond, Pluto Press, 1986, takes a global look at women's work and points to the vital role it plays in the underground economy. A War on Want publication Women Working Worldwide, 1983, is also good on this subject.
Children at Work, edited by Elias Mendelievich, ILO, 1979, is a chilling and compassionate study of the exploitation of children worldwide. Other, more academic, International Labour Office publications include Clandestine Employment by Raffaele de Grazia, 1984, for industrialized countries and The Urban Informal Sector in Developing Countries by S V Sethuraman.
Books on the informal sector in the Third World tend to take the form of collections of essays. Thought-provoking pieces can be found in Beyond Employment edited by Enso Mingione and Nanneke Redclift, 1985; Casual Work and Poverty in Third World Cities edited by Chris Gerry and Ray Bromley, John Wiley, 1979; and Planning for Small Enterprizes in Third World Cities, edited by Ray Bromley, Pergamon, 1985.