In April 2002, violent demonstrations known as the "water war" in Bolivia forced President Hugo Bánzer to cancel the contract with the only international corporation interested in taking on the most ambitious water project ever proposed in the country. Recently, another major popular upheaval ended a project to export natural gas to Mexico and the United States through a Chilean seaport.

This was the "gas war," which its leaders used to overthrow President Sánchez de Lozada and hold back the modernization process of strengthening institutions, opening markets, and integrating Bolivia into the global economy. These so-called "wars" are part of the same conflict that prompted the peasant blockades of September 2000, the continuing protests by coca growers against efforts to eradicate their crops because of their role in the cocaine trade, and the withdrawal earlier this year of a progressive tax project.

In essence, these are all part of an ongoing conflict between democracy and populism, with Bolivia's future caught in the crossfire. Neither side trusts the other, so social wars have replaced meaningful political progress. As the violence of the social mobilizations and the level of discontent have grown, Bolivia's intellectuals and politicians remain in a state of shock, afraid of contradicting the masses. For their part, the populists can rouse the masses but fail to offer alternatives. They are nostalgic for the past and fearful of globalization.

As the two sides collide, the country suffers: the outcome of the water war has meant that the poor still use the same dirty and expensive water, while the result of the gas war could mean that we remain without new export revenues. Bolivia needs leaders who can move the country beyond social wars that translate into stagnation.

To move forward, both sides need to be realistic about Bolivia's past. The level of poverty--more visible with Bolivia's urbanization--is enormous, but it was worse before modernization efforts began. In fact, almost all indicators point to substantial progress made in the 21-year history of Bolivian democracy. Infant mortality has been cut in half, more citizens than ever enjoy educational opportunities, and electric, telephone, and sanitation services have expanded to serve a greater number of people. Moreover, the channels leading to higher social and political participation have multiplied.

These advances are the result of audacious institutional reforms and the government's sustained and increased investment in social programs. They are part of the modern democracy.

None of this progress, however, has been accompanied by the strengthening of our citizens' sense of responsibility to their nation. In fact, while Bolivians demand the right to the many benefits of democracy, we fail to take seriously any obligation to contribute to the public good. Many evade or reject paying taxes, in part by appealing for compassion towards the poor.

Leaders of the poor prefer to romanticize the past. Thus, while ethnic inequities have been dramatically reduced over the past 50 years, the historical memory remains vivid to new generations of the now urban Aymaras and Quechuas people. They rightly contest the degradation of their ancestors, but also idealize their rural, communitarian nature.

The current state of affairs fails to meet their expectations, especially when contrasted with an idealized version of the past or the new patterns of consumption portrayed in the media. So expectations outpace reality, with politicians contributing to this by promising more than they can deliver--and thus losing the trust of their constituents.

Malaise has grown ever more acute after many Bolivian political leaders and their supporters, worn down by the regional crisis of the 1990's, expressed doubts over the modernization process. Institutional reforms meant the government could no longer use public resources with the same discretion as before. As a result, political parties and social organizations alike attacked reform efforts. Presidents Bánzer, Quiroga, and Sánchez de Lozada found their authority dwindling while movements against them grew ever more robust.

After the political rebellion and lootings of this past February, Bolivia's Catholic bishops made real and consistent efforts to create a harmonious space for dialogue. But the most radical indigenous groups rejected the initiative, and the group organizing the coca growers took advantage of the situation, stirring up nationalist sentiments.

This was easily accomplished, given Bolivia's memory of its losses: the loss of its seacoast to Chile in the War of the Pacific in 1879, of coca crops to the US eradication program, and the country's mineral wealth to transnational corporations. Populists effectively converted these memories into a political force that rejected efforts leading to globalization and an open society.

This conflict continues. In Bolivia, the populist/communitarian movement is in the saddle, but is failing to do much more than shelve reform projects. For the underlying conflict to be resolved, Bolivians must become convinced that reform is the right track, the only one, indeed, that leads to progress and authentic development.