Executive summary

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The process that led to the conclusive electoral victory of Evo Morales Aima, making him the first indigenous president in America, sprung from the articulation of two complementary processes underpinning the mobilisation of popular forces in the country. On the one hand, we have the colonial and monocultural characteristics of the formation of the Bolivian state; on the other, we have the nature and results of 20 years of implementing the neoliberal model under the framework of the structural adjustment programme.

The set-up and implementation of the structural adjustment measures was done on the basis of a monocultural state structure, which organised the life of a society that is not only multicultural but also multicivilisational. Therefore, the impoverishing social consequences of enforcing the neoliberal economic model aggravated the social, cultural and economic subordination imposed upon the majority of the population since the formation of the Republic - an indigenous majority, made up of 35 so-called "native" groups (pueblos originarios ) and indigenous people living in the country's urban centres.

These groups feel that their own logic of how to organise the production and reproduction of economic, social and political life, together with their economic, social and self-government institutions, are excluded from a state structure designed in a Western image. In this context, the MAS did not start as - and is not to this day - a political party in the conventional sense. It is a political instrument of the social movements that have been the most active in the last few decades - new social movements which combine and transform what were once trade-union, rural-communal and urban-local identities.

Therefore, the changes intended by the new government, as stated in the National Development Plan, not only aim to put an end to the economic and political model introduced by neoliberalism, but also to dismantle the colonial and monocultural content of the state - to change its very nature. The aim is to re-establish the state on the basis of equality between civilisations and cultures, with a fair distribution of power and participation. The changes envisage replacing the existing party system and system of political representation with a new, inclusive political system that allows for all peoples and cultures to attain power. For these reasons, the Morales government is strategically linked to the fulfillment and results of the neo-foundational process, culminating in the deliberations of the Constituent Assembly. As is well known, Bolivia's indigenous civilisations embody social, political and economic logics of the production and reproduction of economic, social and political life which are different from - and even contradict - the liberal logic of Western civilisation.

This has led the government to redefine what is generally understood when we speak about "welfare" from the perspective of these different cultures and civilisations, and to build a common concept bringing together and complementing their perspectives. The new concept of welfare or "living well" (vivir bien), as the government has called it, allows for the construction of a new development paradigm (different from the Western concept of welfare, which mainly revolves around variables of material welfare). A new idea of development thus arises, integrating both material and non-material variables, and complementing integrated individual variables with communal variables.

The government intends to replace the primary, export-led development model with "a new diversified and integral development model", changing the productive matrix on the basis and drive of the revenues and industrialisation of natural resources. The idea is to implement at the same time "structural policies to change the model of distribution of productive and social assets, and mechanisms to redistribute income, through strategies and programmes of community development".

As for the economic policies relating to macroeconomic stability, the alignments implemented by former governments have been maintained. However, the financial deficit has been reversed thanks to the new revenues coming from the recuperation of the property of hydrocarbons and nationalisation. The first results have contributed to an improvement in the deficit results, but the major expected results are still to come. The policy of fiscal austerity and the reduction of corruption in the tax and customs system have contributed to this process.

In its first eight months, the government has already shown some concrete impacts. Even though the quarterly GDP growth rate shows an upward trend of 4.3 per cent in the first quarter and 4.52 per cent in the second, these increases are lower than the quarterly results for the first two quarters of 2005: 4.8 per cent and 4.1 per cent, respectively. This slow-down can be easily explained by the decrease in the production of oil and gas (the new contracts between the state and the oil companies are still being negotiated). Other important indicators of the performance of the government show improvements in relation to the same indicators for last year. In September, devaluation reached 0.37 per cent, the accumulated inflation until August has gone down to 2.82 per cent and the accumulated fiscal deficit up to August 2006 has gone from a negative figure to 5.62 per cent positive (of GDP).