Mining tax spreads wealth to 1% but Bolivia shows different path

In reality, the MRRT is all about spreading the benefits of the mining boom from the 0.01% to the rest of the 1%.

To understand what it would take for a government to seriously redistribute wealth to the 99%, we should look to the policies of the Bolivian government.

The Bolivian people know all too well what it means to lose out from the benefits of a mining boom.

Following the discovery of Potosi’s legendary silver deposits in the 16th century, the Spanish crown ordered each indigenous family to hand over one of its children to work in the mines. Most mine workers died within six months due to the super exploitative conditions.

Despite Potosi’s immense wealth and the fact that its population at that time was bigger than that of London, New York and Paris combined, today Bolivia is one of the poorest countries in Latin America.

The other cities are key global financial centres today, a position they obtained largely on the back of the wealth they looted from Bolivia and the estimated deaths of 8 million people in Potosi’s mines.

This pattern was repeated in Bolivia over later centuries, as foreign powers moved on to pillaging Bolivia’s tin deposits and more recently its gas deposits.

Deciding that enough was enough, Bolivia’s people once again began rising up in 2000. Since then, this small nation has been rocked by more than a decade of mass upsurges demanding that Bolivia’s natural resources and wealth be used to lift the country out of poverty and underdevelopment.

In 2005, Bolivians elected their first indigenous-led government, headed by Evo Morales. The new government has presided over a process of change that has brought big advances.

The most recent move is a proposal to change the conditions under which mining companies operate in the country.

The day after the passage of the MRRT, Reuters reported that Swiss multinational Glencore had become the first company to sign onto Bolivia’s new mining contracts.

The contracts aim to bring the mining industry in line with the new constitution, which says all natural resources are property of the Bolivian people. As such, the Bolivian government will now receive 55% of all profits and have control over the sale of minerals extracted.