EVO MORALES, the Bolivian president, won a crushing victory in the 10 August re-call referendum, winning 67.4% of the national vote on a turnout of over 83%.
In the crucial areas of Cochabamba and Chuquisaca, which were disputed between left and right wings, Morales won 70.9% and 53.9% respectively. Even in the right-wing controlled 'media luna' ('middle moon') provinces Morales won 52.5% in Pando, 49.8% in Tarija, and in Santa Cruz 40.75% of the vote.
Morales's landslide victory reflects the demand of the Bolivian masses for a radical transformation of Bolivian society and opposition to neo-liberalism and the ruling class. This victory terrified the ruling class, who fear that the pressure will increase on Morales to adopt more radical measures.
Following his victory, right-wing reactionary forces in the eastern provinces of the media luna, have gone onto the offensive, dramatically intensifying the struggle between revolution and counter-revolution.
Following a week of intense struggle, negotiations are currently taking place between representatives of the eastern provinces and the central government. While these negotiations seem to have resulted in a temporary calming down of the situation, they will not resolve the underlying cause of the crisis. It is a matter of time before further clashes erupt.
Such is the pressure from the masses that the government was compelled to arrest the governor of Pando, Leopoldo Fernandez, during the negotiations. He is charged with hiring hit men to murder sixteen peasants on their way to a pro-government rally.
Unfortunately, the failure of the leadership of Evo Morales and his party, MAS (Movement Towards Socialism) to use the victory in the re-call referendum as a springboard to take the revolution forward and overthrow capitalism, has allowed the forces of reaction to steal the initiative.
In Santa Cruz, a "civic coup" was organised on 8 September. Central government buildings, including the offices of the Impuestos Internas (Tax office), the Instituto Nacional de Reforma Agraria (Agricultural Reform) and the telecommunications company ENTEL, were taken over and ransacked.
The local airport was seized and road blocks established to cut off the city. Access to the airport was only possible after passing through checkpoints controlled by right-wing groups.
Right-wing thugs, from the semi-fascist youth organization Unión Juvenil Crucenista (UJC), also entered the poorest shanty town, 'Plan 3,000', where Morales has massive support. They were dressed in military fatigues and terrorised children and youth. They also threatened to cut off the pipeline supplying gas to Brazil. Morales sent the army to the Santa Cruz region and the country was taken to the brink of civil war.
The US ambassador was expelled from the country by Morales for actively backing the right-wing organisations in 'media luna'. This was then followed by the expulsion of the US ambassador to Venezuela by president Hugo Chávez in solidarity with Morales. The US has responded by the expulsion of the Bolivian and Venezuelan ambassadors from Washington.
This crisis in Bolivia has had regional repercussions and implications. The ruling classes of the rest of Latin America are terrified that the outbreak of civil war in Bolivia will spill over into the rest of the continent.
Moreover, a possible break up of Bolivia, with the eastern provinces breaking away and taking with them the gas and energy supplies, would trigger a series of border disputes involving Chile, Brazil and Argentina. Hence, the governments of Brazil, Chile, Argentina and others have declared their support for Morales and opposed the right wing.
Through this intervention they hope to exert further pressure on Morales to hold the mass movement in check and apply the brake to further revolutionary developments. This international pressure, and the current balance of class forces in Bolivia, is probably why the right wing agreed to negotiations with the government - for now.
After his electoral landslide Evo Morales announced plans to go ahead with a referendum on a new constitution in December 2008.
The reforms included in this draft constitution would increase the influence of the indigenous peoples - who form an overwhelming majority of the population - and also introduce important reforms for a minimum income, pensions and health schemes.
Crucially, it would also establish a limit on the amount of land that can be held by the big latifundistas (estates) of either 5,000 or 10,000 hectares. Today, many of the large landowners have hundreds of thousands of hectares of land. A massive land reform programme, which would inevitably result in a bitter struggle, is necessary to enact this clause in the new constitution.
Immediately following the re-call referendum the right-wing in Santa Cruz began to go onto the offensive. Following his ratification as Prefect, Ruben Costas, denounced Morales as a "dictator" and in a clearly racist insult referred to him as a "monkey".
He condemned the governing party, MAS, as "state terrorists". As a portent of events to erupt within a few weeks, he also announced plans to elect a new Autonomous Legislative Assembly, establish a parallel police force and departmental tax agency.
On 15 August, he then led a demonstration which ended up with his supporters beating up the local police chief and his deputy. The semi-fascist UJC also marched on a meeting of the local council. According to reports they intended to lynch the sole elected councillor who is a member of MAS.
In Santa Cruz and the media luna the ruling elite raise the demand for "autonomy" as a means of defending their own privileges and domination in society.
In these provinces they try to rule with an 'iron fist' and oppress the indigenous peoples in a Bolivian 'social apartheid'. In the centre of Santa Cruz, bars and restaurants carry signs refusing entry to the indigenous peoples!
Amongst a layer of the down-trodden in Santa Cruz they have partly succeeded in sowing confusion on this issue of autonomy and have been able to win some layers to support them. This is largely because of the weakness of the programme of the MAS and the failure of the central government to address this issue and offer an alternative.
The negotiations which are currently taking place between the right-wing governors and Morales may result in a temporary stand off but this will not last long. New conflicts and clashes are inevitable as the underlying clash of interests between the mass of the population and the reactionary, privileged elite remain unresolved.
Morales enjoys massive support and there are high expectations of his government to end the poverty and misery which blights the lives of the mass of the population in Latin America's poorest country.
The social programmes, like the payment made to all school students through the Juancito Pinto project, and Renta Dignidad, which aims to provide a minimum basic quality of life for every child, elderly and poor person, are very popular.
The partial nationalisation of Petrobras and other multinational oil interests has won huge support amongst the masses who are now demanding more radical measures are taken.
However, these popular but relatively limited reforms have not ended the miserable poverty which exists for the mass of the population but they have aroused the bitter hatred of the ruling elite. The continuation of capitalism and landlordism will not allow the reforms that have been implemented to be maintained.
Against the background of the serious world economic recession this is even less of a possibility. The corruption of the ruling class and its domination by imperialism and the world economy mean that it will not be possible to develop capitalism in Bolivia.
To maintain the social reform programmes, develop Bolivian society and raise living standards and the quality of life of the masses, a conclusive break with capitalism and landlordism is necessary. The threat of reaction means this is now an urgent and necessary task for the working class, poor peasants and others exploited by capitalism.
Unfortunately, this is not the programme of Evo Morales or the MAS. They have looked towards building a more 'humane' form of capitalism before the socialist revolution.
The government's reforms still leave economic power concentrated in the hands of the ruling class. For example, since Morales came to power 500,000 hectares of (poor quality) land have been taken from the large landowners and given to the poor peasants or peasant co-operatives.
Five million hectares of land is owned by two million poor peasants. Yet 100 families own a staggering 25 million hectares! These 100 families are never going to accept the proposed reform in the new constitution to limit land ownership to between 5,000 and 10,000 hectares.
Unfortunately, Evo Morales and the MAS are adopting policies aimed at appeasing the ruling elite rather than a policy and programme to overthrow them.
The convening of mass demonstrations throughout the country to oppose the "coup" in Santa Cruz would have helped to prepare and raise the confidence of workers, poor peasants and the social movements.
Committees of struggle should be elected on the basis of all delegates being subject to re-call by the assemblies that elected them. Local committees could elect representatives to city, provincial, regional and national organisations to co-ordinate the struggle.
At the same time it is urgent for the movement to reach out to the rank and file of the army. The election of soldiers' committees and a purge of coup plotters and supporters of the right wing are essential to stop the counter-revolution.
These tasks also need to be linked to the need for the formation of a workers' and peasants' government with a revolutionary socialist programme. This should include the seizure of the land owned by the richest 100 families and its redistribution to poor peasants and peasants' co-operatives and nationalisation of the multinational banks (without compensation) and the major companies dominating the economy.
These steps, together with the introduction of a democratic system of workers' control and management of the economy, are the way to ensure reaction is decisively defeated and to open the way to introduce a democratic socialist plan of the economy.
These measures, linked to an appeal to the workers of Venezuela, Cuba and the rest of Latin America to join together and form a Democratic Socialist Federation of Latin American states, are the steps needed to defeat reaction and take the socialist revolution forward in Bolivia.