La Paz Worker

The Cities That Neo-Liberalism Built

Exploring Urbanization in La Paz-El Alto, Bolivia

by Linda Farthing, Juan Manuel Arbona, Benjamin Kohl

June 04, 2006

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Despite being bordered by unsteady terrain, the city of La Paz, Bolivia continues to expand down the valley where it is located. High demand for housing has resulted in poor urban planning and a high rate of dangerous mudslides during the rainy season, the effects of which can be seen pictured above. Photo courtesy Benjamin Kohl.

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Linda Farthing, a writer, educator, and activist, has worked on Bolivia for 20 years. She is a former regional director for the Americas at the School for International Training and has extensive experience in grassroots community development in both Bolivia and Nepal. She has written and produced over 50 articles and radio reports on Bolivia, while also recently coauthoring Impasse in Bolivia: Neoliberal Hegemony and Social Resistance with Benjamin Kohl.

Juan Manuel Arbona is an Assistant Professor in the Growth and Structure of Cities Program at Bryn Mawr College. He has worked in Bolivia since 1994 with a range of local NGOs and international organizations. He is currently a Fulbright Scholar in La Paz and is conducting research on local forms of political organization in El Alto.

Benjamin Kohl is a member of the department of Geography and Urban Studies, Temple University, and a Visiting Scholar in the Department of City and Regional Planning, Cornell University. He has worked as a development consultant for a range of organizations and has written extensively on Bolivia.

When people think of globalization as an urban phenomenon, they usually think of New York, London, and Tokyo—the command and control centers of the global economy. Yet most urban dwellers live in smaller cities and metropolitan areas with populations of fewer than 2 million residents. These smaller cities account for the majority of the global urban population growth of around 65 million people per year.

Smaller cities illustrate the tensions brought about by changes in the global economy. Neoliberal globalization, the increasing reliance on markets to drive economic development, has resulted in a particular set of urban forms in poor countries—a minority of economically successful residents inhabiting increasingly privileged spaces—while the poor are ever more marginalized both economically and socially. At the same time, global trends toward democratization and increased political participation have exacerbated tensions in cities where the majority faces limited economic options. Most observers know that markets create winners and losers and understand the ways in which neoliberal globalization increases the gulf between the rich and the poor. But there is less understanding of how neoliberal globalization is cast into the brick and mortar of cities in the developing world. The metropolitan area of La Paz-El Alto, Bolivia, provides an exemplary case that illustrates how globalization shapes cities and how these particular urban forms, in turn, threaten the political sustainability of neoliberal globalization.

La Paz, the seat of the national government, sits in a bowl below El Alto—literally “the heights”—in a fragmented metropolis of 1.6 million people. The twin cities have been aptly described as an indigenous urban center overlooking a colonial city. They dramatically demonstrate how social relations react to the historic constructions of the built environment. With increasing frequency over the past six years, growing inequalities resulting from neoliberal policies and expanding spaces for contestation have strained La Paz-El Alto’s social fabric to the point of eruption.

Although impoverished citizens in low-income countries can claim few advantages, the geography of the twin cities has dealt the poor a powerful hand. With its majority indigenous population sitting above La Paz, El Alto spreads out across the altiplano, the inter-Andean plateau. El Alto controls all but one of the roads that connect La Paz with the rest of the country. In a tradition that began with an indigenous siege in 1781, lead by Tupak Katari and Bartolina Sisa, residents of El Alto have regularly closed off roads and marched down the steep hills to the center of La Paz in protest of economic and social policies. In 2003 and again in 2005, this geographical advantage facilitated demonstrations that drew from powerful collective memories and a deep sense of marginalization and injustice to forge a movement that forced two successive presidents to resign.

Indigenous residents of El Alto, Bolivia march in the streets in March 2005. Tensions between the mostly indigenous El Alto and its bordering city La Paz have led to frequent protests of the Bolivian government's divisive economic and social policies. Photo courtesy Benjamin Kohl.

Like other parts of the global south, where urban population has increased over the past 50 years from about 300 million to about 2 billion people, La Paz-El Alto has grown exponentially. The entire metropolitan area had a population of 320,000 people in 1950—El Alto was then a neighborhood of only 11,000 and the site of an airport and factories that required more space than was available in the narrow La Paz valley. The city began to grow following the 1952 revolution that freed the majority indigenous rural population from bonded labor on large haciendas. But El Alto’s growth noticeably took off in the early 1980s due to droughts and then neoliberal economic policies imposed by the IMF and the World Bank. Peasants, who could not compete with the flood of imported agricultural goods when borders were opened, moved to the city. They were joined by thousands of miners who made their way to El Alto when President Victor Paz-Estenssoro closed the state mines that had formed the core of Bolivia’s economy since the Spanish conquest in 1986.

In 1988, with its population approaching half the size of La Paz, El Alto became a separate municipality, hoping its independence would improve its access to resources. Fifteen years later, El Alto roughly equaled La Paz in size and the young city continues to sprawl across the altiplano today. As in cities in other low income countries, 60 percent of El Alto’s population is under 25 and its workforce is mostly non-unionized, often maintaining direct ties to the countryside and holding a strong sense of indigenous identity.

These arrivals created a political culture in El Alto and La Paz’s marginal neighborhoods that combines aspects of trade unionism with traditional indigenous forms of land-based organization (ayllu) within a context of marked economic insecurity and social frustration. This instability is physical as well: demand for land near La Paz has led to the construction of adobe houses built on steep and unstable cliffs surrounding the city’s basin. Mudslides and flooding occur during the torrential downpours during the rainy season that runs from December to February. The marginalization of housing for the urban poor is common to other developing countries, with the 1999 mudslides in Caracas Venezuela that killed more than 30,000 people serving perhaps as the most tragic example.

In the last 20 years, La Paz has also expanded down the valley to the south, where, despite limited stable land, middle and upper-class subdivisions have blossomed. The southern zone is characterized by large, modern homes set behind fortified walls and surrounded by trees, open streets, paved roads, and pedestrian areas. Service workers from the surrounding hills and El Alto come down the hill first to build the houses of the rich and then to cook, clean, and repair them, allowing families to reproduce the lifestyle of global elites. The area houses most of the international diplomatic corps as well as exclusive American, German, and French schools, along with the services found in international and elite enclaves throughout the developing world.

These conditions in the southern zone of La Paz are in sharp contrast with neighborhoods in El Alto, which are characterized by congested streets, unpaved sidewalks, low rise buildings in varying degrees of completion, and inadequate drainage. Fifty-four percent of El Alto residents rely on outdoor plumbing for access to water. In general, the built environment of La Paz reflects years of public investment. El Alto’s limited physical infrastructure, on the other hand, proclaims a city that outgrew the municipal government’s limited resources and ability to provide basic public services.

Planners in both cities have not controlled land use and human settlement. The demand for land by impoverished migrants, desperate for a place to live, has created a pattern of urbanization that does not follow legally defined land-use norms. While informal land use is common throughout low income cities with an estimated one billion people living in slums worldwide, these marginal settlements take very different forms in the two Bolivian cities. In La Paz, migrants living on steep slopes suffer from the seasonal threat of mudslides. In El Alto, developers have created subdivisions without providing basic services and ignoring regulations that require public space for schools, churches, and parks. In some cases, plans are approved on payment of fees that go no further than the pockets of public employees. In other cases, developers sell de facto titles and new owners define their lots with adobe walls.

Since the adoption of neoliberal policies in 1985, intense migration and local factory closures have made the informal economy an increasingly important labor-sink in both cities. Between 1992 and 2001 the informal economy grew by 60 percent in La Paz, with many of the workers commuting from El Alto. But this figure is dwarfed by the 162 percent growth in informal jobs in El Alto. Overall, the informal sector accounts for about 70 percent of the total urban labor force, a common figure for low-income countries.

Considerable tension, born of discrimination and economic differences, exists between El Alto and La Paz. A common perception in La Paz is that El Alto is dangerous and its residents are delinquents. This tension is reflected in the different ideologies governing the cities. La Paz is dominated by the logic of the market, which privileges individual actors, while El Alto resonates with the historic memories of collectivism and reciprocity, particularly those practiced in rural communities under the ayllu system, which promotes the idea of a shared well-being. El Alto navigates between the tension of immediate response to crisis and long-term proposals for progressive change. It negotiates between an indigenous identity based on an idealized, hybridized history and social demands that incorporate a westernized modernity.

While the two cities are now roughly the same size, La Paz raises about five times more tax revenue per capita, even though most of the area’s industries sit in El Alto. Since the 1994 initiation of a widely adopted World Bank policy of administrative decentralization and municipal expansion, 20 percent of the national budget has gone to the country’s municipalities. For a handful of Bolivian cities, like La Paz, with an independent tax base and the ability to raise their own resources, the administrative reforms have provided an important additional source of revenue. For El Alto, the reforms have brought the majority of municipal revenues, as the city has been unable to develop significant local revenue streams, in large measure because firms pay taxes based on the location of their head offices.

The participatory discourse surrounding municipal decentralization has restructured planning in both municipalities. Demands from citizen groups have consistently outstripped the municipalities’ resources and ability to provide public services. This is unsurprising given the public per capita revenues, including funds from World Bank debt restructuring programs that target the poor, of less than US$90 for the relatively wealthy city of La Paz and US$44 for El Alto.

While public resources are limited, a culture of corruption dominates both cities, reducing the purchasing power of public funds. Spectacular cases in La Paz include one mayor authorizing the sale of national parkland on the outskirts of the city, while another transferred four checks for US$25 million each to a Bahamian bank “for safe keeping.” In La Paz and El Alto, more than 10 mayors have been removed from office, many on charges of corruption. A 2002 audit of municipal accounts in El Alto was unable to find receipts for almost 25 percent of total city spending.

As in other low-income cities, endemic corruption also reduces the citizens’ willingness to pay taxes and participate in city planning. Municipalities’ efforts to increase tax collections are often perceived as generating booty to be divided among political parties. This has led to tax revolts in both cities, such as those in February and September of 2003. Distrust in government also means that citizens have less desire to participate in planning. To attribute the problem of political capacity simply to corruption, however, negates the depth and complexity of economic and political life. The problems of corruption are complicated by the economic and labor precariousness that define daily life for most residents.

In El Alto, Juntas de Vecinos ("neighborhood organizations") offer an important alternative site of citizen representation. According to El Alto sociologist Pablo Mamani, the Juntas commonly serve as neighborhood micro-governments. As the new settlements shaped by neoliberalism in El Alto expanded and stabilized, the Juntas played two key roles: they pressed the municipal government to install basic urban services and developed clientelist relationships with political parties to gain access to those services. In 1989 there were 166 Juntas in El Alto; by 2006 there were almost 550.

The rise of these residential, rather than work-based, organizations could have facilitated an expanded leadership role for women, as the home and its management is a woman’s traditional sphere in Bolivia. While women frequently participate in the Juntas' programs and actions, the organizations' roots in mining or peasant union structures have ensured that male leadership predominates. The Juntas, however, have achieved more female representation than most popular organizations; in 2004 women held 10 of 29 leadership positions, although they were not in central roles.

The Juntas have also played a key role in the emergence of El Alto as a primary site for resistance to neoliberal policies. The convergence of two political identities, miners’ and indigenous peoples,’ was critical in building the trade union and neighborhood organizations that challenge the existing political order. More than once they pushed their leadership aside to stage overt rebellions, mobilizing hundreds of thousands of people. The past five years of protest in La Paz highlight how social tensions can affect the physical organization of cities as well as how residents contest that organization.

The global push by international institutions towards democratization usually ignores the reality that ethnic identity or class position often determines perceptions of democratic practice. In Bolivia, neoliberal economic policies exacerbate the differences, even as neoliberal political democratization facilitated the December 2005 election of Bolivia’s first indigenous president, Evo Morales, bringing a peculiarly Andean form of apartheid to an end. It remains to be seen whether his election will remain a symbolic gesture or is the first step in dismantling the neoliberal agenda and reshaping the urban environment. While a Bolivian president may be removed as easily as he is voted into office, the inequalities of globalization that are cast into the physical infrastructure of the neoliberal city may prove harder to change. How Morales confronts the challenge of creating a new kind of indigenous metropolis in the Americas, 500 years after Spanish Conquest, will determine whether he remains in office longer than his predecessors.

Other cities throughout the developing world face similar challenges given the combination of neoliberal globalization that reduces resources for public services, rapid urban growth, and an economic system that is structurally unable to incorporate a youthful population into the labor force. The resulting frustration arising from spatial and economic marginalization creates a fertile recruiting ground for political, religious fundamentalist, or criminal groups that may threaten the stability of the markets that neoliberal globalization seeks to build.