Today is a very important day for the country of Bolivia. It is also, perhaps one of the most challenging for its President, Evo Morales. In the state of Santa Cruz, the country's wealthiest which accounts for 30% of its GDP, and is rich in natural resources such as gas, fertile land, iron ore, water and forests, a referendum is being held on whether it should become autonomous from the central government in La Paz. Support for the referendum, within the state, according to most polls, stands at 74 percent, which is far above the two-third majority needed for it to pass. Additionally, depending on the outcome of the referendum in Santa Cruz, three more states (Beni, Pando and Tarija) in the lowlands of the country (also the wealthiest), have indicated that they will go ahead with their own autonomy referendums this coming June. Combined, these four states account for 35% of the country's population and 65% of its GDP. If the referendum's pass, the country of Bolivia would effectively be divided into two parts, one controlled by the indigenous majority in the highlands, and the other by European descended elites. For his part, President Morales, with international backing has called the referendum illegal and unconstitutional. In this post I want to look a little deeper into the situation and the many reasons behind the current turmoil. The post, will also be updated later tonight to reflect any known electoral results, and reactions.

There are many components to this conflict as it traverses various issues at once. It is a conflict that stems not only from the economic, but also from ethnic/racial and ideological divides. Bolivia, due to its colonial past, contains many of the vestiges from the era, including a European descended elite, and an impoverished indigenous population, which until the election of Evo Morales two years ago, had very little to no access to the levers of power in the country; this, despite the fact that they make up to 60% of the country's population. In fact, the indigenous population was so marginalized that until the revolution of 1952, Bolivians of indigenous descent were not allowed near the presidential palace. Part of the disdain with which mestizos hold the indigenous population was evidenced when Ms. Bolivia suggested that her country was not an indigenous nation, because there were many people like her who were not only tall, white, but could speak English.

Even now in Santa Cruz, there is evidence of historic racism against the indigenous population of Bolivia. TV reports indicate that members of a youth militia known as Unión Juvenil Crucenista, who have promised to protect voters as they make their way to the polls, have been seen not only roughing up indigenous street merchants, writing graffiti with the message to "grab your weapons, and kill the kollas," (the derrogatory term used for the indigenous people of Bolivia) but also, and perhaps more troubling, wearing swastikas, denoting a far more radical bend.

Cruzeños (as the people of Santa Cruz are known) reject accusations of racism and point instead to economic factors, and President Morales' leftists ideologically driven programs as the main reasons behind the referendum. To be sure, there is much evidence for this starting with President Morales' pledge, when running for office, to not only nationalize the country's industries but also to redistribute wealth (particularly land) in favor of the country's indigenous poor. In a country were 10% of the population, own almost 90% of the land, this measure did not go down well for the elite.

This past May Day, President Morales through decree announced the nationalization, in the form of gaining a 51% controlling stake of three major energy companies, including "Transredes (controlled by Ashmore and Shell), Andina (controlled by Repsol) and Chaco (controlled by Pan American Energy)." Moreover, he also ordered the taking over of DLHB (controlled by Peruvian and German investors). Additionally, President Morales announced, the re-nationalization of Bolivia's biggest telephone company, Entel, which was purchased by Telecom Italia SPA as part of the privatization efforts of former President Gonzalo Sanchez de Lozada (in 2003 was forced to resign due to mounting pressure and protests led by Morales) during his first presidential term (1993-1997). Something that will likely be important given the today's referendum, is the fact that Morales has sent police and soldiers into Santa Cruz to secure offices belong to Entel.

As alluded to above, however, the nationalization of foreign owned companies, while disturbing to the elites in the country, is not the main economic reason for the referendum and opposition to Morales. Instead, the main justification for the referendum stems from Morales' pledge to redistribute wealth, and to use the recent constitutional convention and/or a nationwide referendum to advance a law that would effectively prohibit the owning of more than 5,000-10,000 hectares of land. This, in a country where some families own as much as 200,000 hectares used mostly for Agribusiness. In fact, the government has already given landless peasants deeds for to 10 million hectares of "unused" land.