Thursday, October 24, 2013

Bolivia’s Enatex, or how state sovereignty intersects with workers’ interests

LA PAZ − My recent post “Bolivian government authorizes workers to take over closed or abandoned firms” was widely reproduced on other web sites. Its publication in the Socialist Project’s Bullet elicited some valuable comments from a number of readers. One such comment, by Sam Gindin, former assistant to the president of the Canadian Auto Workers, I republished with his agreement as a comment to the article on my blog. I replied to Sam in the Bullet piece (see Comment 4).

In another comment “Adam” corrected my reference, in my reply to Sam, to the textile firm Enatex as “a worker-owned ‘social enterprise’.” As he points out, Enatex is state-owned. My confusion stemmed from the statement of the Minister of Labour, at the press conference announcing the new legislation, that more firms like Enatex could be established under the new decree, which purportedly implements a constitutional provision, Article 54, that recognizes the right of workers to “reactivate” companies that are bankrupt or “closed or abandoned without justification.” In fact, Article 54 arguably allows both forms of ownership, state or worker-owned “communitarian or social enterprises,” although the new government decree specifies that the “social enterprises” it envisages will be “private” but provided with state support. In the case of Enatex, the state appoints the top management.

Federico Fuentes, moderator of the blog “Bolivia Rising,” tells me that to his knowledge “at no time have the workers [at Enatex] demanded it be put under workers control.” This does not mean, however, that the Enatex workers are passive. As “Adam” noted, in July they struck the plant for higher wages and for removal of the firm’s general manager. Management was delaying payment of a promised 20% wage increase. The Minister of Productive Development Teresa Morales Olivera met with the workers, granted the increase, and the workers called off their strike after one day.

Neither “Adam” nor I mentioned this, but it turns out that on October 8, the general secretary of Enatex awarded the company’s workers a 100% wage increase, attributing it to increased production and productivity. (It was not an adjustment for inflation, which is currently running in Bolivia at just over 5% annually.)

This additional information suggests that relations between Bolivia’s government and the labour movement are not always as conflicted as “Adam” argues. But there is actually much more to the Enatex story, as it illustrates some of the basic features of the Morales government’s approach as it attempts to negotiate the demands of the various social movements against an overriding commitment to defend and strengthen the country’s sovereignty — which it considers the necessary foundation for further social and economic advance.

The Enatex story, in brief

The company’s roots go back to the mid-1960s, when Ametex, its forerunner, was established first in Oruro, then in La Paz. It soon became a producer of high-quality clothing, and by the 1990s boasted a production capacity of eight million garments per year. According to a recent study by the economic think-tank Fundación Milenio,

“Ametex was a modern industrial complex, possibly the most modern private business in the country, built with the national pride of producing products for export and with responsibility for more than 3,000 highly skilled workers. It was perhaps one of the few examples of an industrial activity that generated both backward and forward linkages. The big US purchasers — Tommy Hilfiger, Polo, Nautica, Lee and others — were very demanding customers for its quality products….”

Much of the company’s US sales in recent years, however, were achieved under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), US legislation that provided duty-free access to the US market for some 6,000 products from Bolivia, Peru, Ecuador and Colombia. The ATPDEA originated in the early 1990s as part of the US “war on drugs,” and was intended to provide these countries with alternative outlets to the production and export of coca and narcotics.

In 2002, the US government suspended Bolivia’s eligibility under the Act and Ametex lost its competitive advantage, the US tariff increasing its costs for export to that market by about 20%. Government subsidies failed to compensate for the loss of markets in the North. And later increased sales to Venezuela, paid in the ALBA currency, the Sucre, produced complex accounting difficulties.

Although the US Congress periodically renewed Bolivia’s eligibility under the ATPDEA, in 2008 — while Bolivia was battling US-supported separatist efforts by its eastern economic elites — Washington decertified Bolivia from continued participation in the Act, alleging that it had failed to cooperate in counter-narcotics efforts. The Morales government predicted that anywhere from 20,000 to 150,000 jobs of Bolivian workers were potentially in danger, most of them in La Paz and its neighbouring city El Alto.

‘Complementarity rather than competitiveness’

Fast-forward to November 2011. After three years of frozen relations (Bolivia had expelled the US ambassador and the Drug Enforcement Agency in 2008) the two countries signed a “framework agreement” to restore diplomatic ties. As Bolivia-based writer Emily Achtenberg reported, the agreement reaffirmed Bolivia’s commitment to voluntarily eradicate excess coca production through social control mechanisms enforced by the cocalero (coca farmers) union federations. But the document said nothing about restoration of tariff protection under any ATPDEA-like legislation, and the Bolivian government insisted that restoration of trade preferences was not a major goal. Achtenberg reported on November 19, 2011:

“Last week, hundreds of textile workers employed by Ametex, Bolivia’s largest textile company, paralyzed downtown La Paz for several days, demanding that the government work to restore tariff protections within the framework of the new bilateral agreement. The company said it would be forced to slash its 2,800 person workforce by 50% due to losses suffered from the decline in exports. The government arranged a $2 million line of credit from the Bank of ALBA—a practical solution unlikely to be replicable by the majority of Bolivian textile firms, which are small and/or family-based.

“While a return to ATPDEA, with its requirement for annual certification of compliance with coca eradication targets, does not seem feasible or desirable, [Foreign Minister David] Choquehuanca insists that Bolivia won’t sign a free trade agreement with the United States to protect manufacturing at the expense of other sectors. Instead, the government will seek to negotiate a new agreement that recognizes the developmental asymmetries between the two countries, based on principles of complementarity rather than competitiveness.

“Whether these aspirations can be realized remains to be seen. In the meantime, the framework agreement provides a powerful symbol of enforced equality between a weak and a powerful nation. Even Morales’s critics agree that his administration has achieved a more dignified and autonomous position relative to the U.S. than have any prior Bolivian governments.”

As these incidents illustrate, the Bolivian government resisted the Ametex workers’ demands for a renewal of preferential trading agreements with the United States because such arrangements would simply replicate a vulnerable market situation at the risk of renewed US interference in Bolivia’s internal development strategies as well as its own particular excess coca eradication policies. The union’s demands reflected only the immediate concerns of increasing market share for their company’s product and protecting jobs without reference to the broader interests of all Bolivian workers and campesinos in lessening the country’s dependency on US markets and US diplomacy.

This is not an unusual pattern in contemporary Bolivia, where many social movements including trade unions tend to focus on defense of their immediate corporate interests while failing to develop a broader anti-imperialist political perspective that alone, in the longer term, can help lead the country beyond capitalism.

In June 2012 the financially troubled Ametex granted the Bolivian government the industrial installations that now function under the name Enatex, to be administered as a public enterprise. As the recent tangled history of industrial relations within the company illustrates, the Enatex employees have not suffered unduly from the government’s control. And the new decree that I reported in my earlier post, offering another possible course of action for workers, reflects the same thinking on the part of the government. In effect, that workers’ jobs cannot come at the expense of national sovereignty, and pointing to an alternative: take over the factory and run it yourselves, with state assistance if necessary.

My thanks to Federico Fuentes, who knows far more about Bolivia than I do, for his valued comments to me on the exchange in The Bullet.

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