or brewed to make a tea) as well as for sale to drug traffickers, is a question
of survival. Coca production is an important part of the local economy18
(Laserna, 1993). Since the late 1980s a dual track strategy has been fol-
lowed, which combines the introduction of alternative agricultural and
tree crops with gradually more restrictive legal measures against excessive
production and drug trafficking. This policy has not met with much success,
notwithstanding enthusiastic financial support of the donor community.
Coca is easy to produce and is very profitable. The failure of the alterna-
tive development initiatives was among others due, in the words of one of
the donors “to the lack of coherence between production and marketing, to
unstable national and international markets for alternative products, and to
a general weakening of the national economy” (GTZ, 2001:24). The Banzer
government, rather than trying to improve on this dual track strategy, decid-
ed to go for a forced eradication campaign, whatever the cost. Whereas an
alternative strategy requires a relation of trust with the coca farmer organi-
zations and full grassroots participation, the government tipped the balance
in favor of a military solution. with ruthless repression. If an example has to
be provided of a policy that has a high probability of proving unsustainable
in the long run because it does not allow for popular participation, then the
so-called Dignity Plan is a prime candidate. Remarkably, the same donor
community that so insisted on a more participative approach, and that con-
gratulated the Banzer government for its National Dialogue, stood by while
the government sent in the military19.
Although the government, under the leadership of Vice-President
(and later President) Jorge Quiroga, seems to have genuinely invested in the
participatory process, it also kept a tight control on how it evolved and in
particular made sure that the expression of popular frustration was turned
away from politically sensitive issues. One of the major causes of the poor
performance of the Bolivian economy is that the country is bogged down
by extreme forms of clientelism and patronage in the public sector, and
by widespread corruption. Efforts to reform the public sector, such as the
SAFCO Law of 1990 have produced very little results. A study by World
Bank staff identifies this malfunctioning of the state as the major explana-
tion why Bolivia, notwithstanding its exemplary macroeconomic policies,
has registered negligible growth in income per capita (Kaufmann et al.
2001). The Banzer, and later Quiroga governments that enacted the partici-
patory process, did very little to turn the tide, on the contrary, they profited,
as did previous governments, of the spoils this political system provided to
the powers that be. Significantly the government did not seek an alliance
with civil society to bring the so needed reforms to the functioning of the
state and the bureaucracy.
Donors are aware of the before mentioned problems, but they have
been more keen to insulate their own aid programs from the disadvantages
of public sector failings, than to use the conditionality weapon to impose
more radical reforms. Bolivia counts a small number of highly competent
and well-trained technocrats who are working in the interface between the
18 It has been estimated that the
coca eradication campaign has
led to a cumulative drop in eco-
nomic output between 1997 and
2000 of 3% of GDP. In addition,
for every dollar of direct drop in
output there was an estimated
extra dollar drop in related eco-
nomic activity. The direct plus
indirect effects on employment
have been estimated at 59,000
jobs (UDAPE 2001).
19 In a paper produced by the
German development co-opera-
tion the following critical com-
ments appeared: “The current
flash reduction of surplus coca to
almost zero, without that being
accompanied by a necessary
process of alternative develop-
ment, may be equivalent to a
political time-bomb, especially
since Bolivia has been undergo-
ing a severe economic and social
crisis for years. Under these
circumstances, drug control by
means of repressive measures
and military presence might
seem diametrically opposed to
the actual principles of alterna-
tive and human development”
(GTZ 2001, 25). The Americans
on the other hand warmly ap-
plauded the policy, whereas the
World Bank declared that it was
not supporting this part of the
Government strategy because it
did not correspond to the Bank’s
“comparative advantage” (World
Bank, 2001c:8). The population,
which was denied participa-
tion, voiced its protest through
the ballot box: Evo Morales,
the leader of the coca growers,
came a resounding second in the
presidential elections of 2002,
with just a few percentage points
less than the Gonzales Sanchez
de Lozado.
IDPM-UA Discussion Paper 2002-05 • 21