Happy New Year! It’s been a crazy week here in Bolivia. Here’s a quick news update for those who are interested and may be wondering about what’s happened with the so-called “gasolinazo.”
Last Sunday vice president Álvaro García Linera announced a decree that ended a practice of government subsidy of gasoline and diesel prices, resulting in an immediate increase of 73% in the cost of gasoline. This came as quite a shock to the entire country and was almost universally unpopular. The official explanation pointed out that the subsidy on imported gasoline costs the government hundreds of millions of dollars annually, with the sum expected to increase for 2011–and a large portion of that is lost through smuggling operations that sell the cheaper gasoline across the border into neighboring countries. Costs of transportation and other basic goods were in limbo for a few days, often as much as doubled in spite of an official assessment that transportation costs should only rise 25-30%. On Wednesday evening president Evo Morales gave a speech announcing a 20% increase in the minimum wage and in salaries for all government employees. Clearly that was too little too late, as protests and transportation strikes were carried out as planned on Thursday and even made news in US media. Some of these got violent, and all made quite evident the anger, pent-up frustration, or sense of betrayal of the various demonstrators.
Then late last night, on New Year’s Eve, following long meetings with his cabinet and representatives of various sectors of society, Morales once again addressed the nation and announced that the decree and all related measures were repealed. In other words, gasoline goes back to its subsidized price, and the pay increase will not take effect. While affirming that ending the subsidy is necessary, Morales has evidently been persuaded that the timing is not right, and he announced his continued intention to govern in obedience to the people’s wishes. So… never mind! What many described as an unwelcome Christmas present has now been taken back, presumably in the hopes of offering a happy, peaceful New Year.
For those who have expressed concern, I have been just fine and my home, while walking distance from the center of La Paz and the palace of government, is in a quiet neighborhood away from the main roads. But stay tuned! It will be interesting to see both the immediate and long-term effects of this turbulent week on the political and social climate here.