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  HOME | Bolivia

Bolivia Revokes Decree Ending Fuel Subsidies

LA PAZ – Ceding to pressure from protesters, Bolivian President Evo Morales revoked a decree that had ended subsidies for fuels and caused them to increase in price by up to 82 percent.

In a message late Friday, Morales said he had decided to rescind the decree after meeting with unions and indigenous organizations who convinced him that the price hike for gasoline, diesel and other fuels was “inopportune.”

“That means that all the measures are no longer in effect. There’s no justification right now for raising (transportation) fares nor for increasing the price of food or speculation. Everything returns to how it was before,” the president said.

Morales issued the statement with Vice President Alvaro Garcia Linera and his foreign minister, David Choquehuanca, by his side; earlier Friday, he had met for several hours with social groups in the central Chapare region and with his Cabinet ministers.

The socialist leader was harshly criticized this week by unions and grassroots groups, which accused the president of taking “neo-liberal” measures and even demanded his resignation during sometimes violent protests.

“Neo-liberal” is a slur used by Latin American leftists to describe advocates of free-market, laissez-faire economic policies.

The most violent demonstrations took place on Thursday in El Alto, a heavily indigenous, highland city near La Paz that prior to the decree had been a bastion of support for Bolivia’s first Indian president. The protesters vandalized some government and social offices and set fire to tollbooths on a road to the capital.

More protests had been scheduled for Monday, including a strike by the powerful miners’ unions, a mass march of mine workers from Bolivia’s altiplano (high plain) to La Paz and plans for road blockades by peasants.

Morales earlier in the week announced a 20 percent increase in the minimum wage for police, health workers, the military and other public-sector employees to help offset the effect of the higher fuel prices, but that move did not appease the protesters.

The government said it ended the subsidies in response to rampant smuggling of cheap Bolivian gasoline and diesel into neighboring countries where prices are higher.

The end of subsidies sent the prices of liquid fuels soaring by up to 82 percent and prompted bus drivers to double fares for passengers, even though the government authorized a fare hike of only 30 percent.

Higher transportation costs also resulted in higher prices for food.

Even before the fuel price increases, El Alto’s Federation of Neighborhood Boards, or Fejuve, had begun to distance itself from Morales, complaining that his administration was neglecting the needs of that hardscrabble industrial city.

Grassroots and labor groups in El Alto played a decisive role in forcing the October 2003 resignation of then-President Gonzalo Sanchez de Lozada after security forces killed dozens of protesters.

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