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Bolivia: A New "Gas War"?

BOLIVIA: MANDATE OR MUDDLE ON OIL & GAS RESOURCES?
Ambiguous Referendum Divides Indigenous Movement, Settles Little

by Bill Weinberg
On July 18, Bolivians voted in the country's first-ever referendum,
designed to determine the future of the impoverished nation's oil and gas
industry. The referendum was pledged by President Carlos Mesa late last
year to buy peace with a militant indigenous-led movement which had
launched a series of strikes and protests against plans for a new pipeline
linking Bolivian gas fields to the Pacific coast in Chile for export to
California. The movement forced the Oct. 17 resignation of President
Gonzalo Sanchez de Lozada, mastermind of the export plan, who had unleashed
the security forces on protesters, leaving at least 80 dead.

The referendum succeeded in forcing a split in Bolivia's indigenous
movement--but critics charge that the wording is so vague that its passage
may not guarantee peace for long.

The referendum was supported by Aymara indigenous leader Evo Morales,
federal deputy from Cochabamba department and head of the Movement Towards
Socialism (MAS) party. The votes he delivered were critical in passing the
measure establishing the referendum July 5.

However, Aymara leader Felipe ("El Mallku") Quispe, federal deputy from La
Paz department and head of the Pachacuti Indigenous Movement, urged a
boycott of the referendum. So did the Sole Sindical Confederation of
Campesino Workers of Bolivia (CSUTCB), also led by Quispe, and the Bolivian
Workers Central (COB).

Quispe and Morales, who cooperated in the movement that brought down
Sanchez de Lozada last October, have now openly split. Two weeks before the
referendum, Morales was expelled from the COB as a "traitor." MAS leaders,
in turn, called for the jailing of Quispe and COB leader Jamie Solares for
provoking violence.

Some 20,000 soldiers and police were mobilized to maintain order during the
vote, and the Organization of American States sent a team of observers.
Nonetheless, the vote was marked by scattered protests--as well as threats
of an armed uprising and rumblings of a military coup.


STRATEGIC AMBIGUITY?

Mesa urged a "yes" vote the set of five ballot questions that ostensibly
support restoring public control over the hydrocarbons industry but also
favor greater exports. The Economist shrewdly noted: "The questions were
worded to avoid alienating the gas nationalists but also to avoid a
self-defeating and costly re-nationalization. However, some pro-nationalization campaigners are already claiming the results oblige Mr.
Mesa to end foreign ownership of oil and has assets."

The first question proposed abolition of the current Hydrocarbons Law,
passed in 1996, which has opened Bolivia's industry to greater control by
foreign companies. Overturning the law was a key demand of the movement
that ousted Sanchez de Lozada, the law's intellectual author.

The second measure proposed restoration of state ownership of hydrocarbons,
and the third posed reactivating the state company Bolivian Fiscal
Petroleum Resources (YPFB), which has been phased out under the
privatization policy.

The fourth question posed using the gas to leverage "useful and sovereign"
access to the Pacific coast--a play to nationalist resentment against
Chile, which left Bolivia landlocked following an 1883 war.

The final question posed exportation of gas "in the context of a national
policy" that promotes processing the gas within Bolivia, assures domestic
consumption needs are met, and directs proceeds from exports for social
development--"principally for education, health, roads and jobs."

Following approval of all five questions, Bolivia's congress has 90 days to
pass new legislation. "Congress now has to act fast to put hydrocarbons
back in the hands of the state company YPFB," Mesa's hydrocarbons pointman
Hector de la Fuente was quoted by Bloomberg wire service. "It also has to
re-establish YPFB to its full potential, like it was prior to the
privatizations of the 1990s."

But critics point out that these principles allow broad interpretation by
Mesa's administration--which has pledged to respect all existing contracts
with foreign companies.

Opinion is also divided on the true level of support for the measures.
Voting was mandatory, under such penalties as loss of pension rights and
being barred employment in the state sector. While the vote achieved the
required 50%-plus-one turnout needed to make the result valid, the 40%
abstention rate was twice that in recent general elections. Spoiled and
null votes made up over 20% of the result, with many voters simply
scrawling "NATIONALIZATION" across the ballot.


WHITHER "NATIONALIZATION"?

Morales, who urged his followers to approve only the first three questions,
has recently equivocated on how far-reaching his proposed nationalization
of the industry should be. "We want nationalization without confiscation or
appropriation, because we cannot embark on adventures," he told the
country's BolPress news agency.

Felipe Quispe, in turn, pledged to fight for a complete take-over of the
industry. He told BolPress after the vote that "the struggle is going to
continue... we haven't lost the war, though it may be so that we have lost
a battle."

Morales' MAS, which hails nationalization as a "conquest of the October
insurrection," accused boycott advocates of playing into the hands of
Bolivia's far right, which seeks to destabilize Mesa's government and
create the conditions for a military coup. Quispe's followers retort that
Morales' hopes of winning the presidential election in 2007 have led the
MAS to tilt right and capitulate on real nationalization.

Winning a "yes" vote for the last question--approving gas exports--was seen
as vital by Mesa to retain the backing of the foreign companies. The Mesa
government poured $800,000 into the "yes" campaign, and lined up
declarations of support for the referendum from the US and Spanish
embassies as well as the foreign gas companies active in Bolivia. The
International Monetary Fund made a $120 million loan contingent on the
referendum passing.

Mesa says any new policy would not be retroactive--none of the over 80
contracts awarded to foreign companies since 1996 will be revoked. Mesa
warns that full nationalization is akin to "declaring war on the world,"
and would plunge Bolivia back into crisis.


A NEW "GAS WAR"?

Morales told Bolivian radio stations after the vote that the MAS will
"continue to fight until the hydrocarbons are under the proper and absolute
control of the Bolivian people... If Mesa does not respect the result of
the referendum, then we will be in the streets again to defend the vote of
the people." This threat explicitly invoked the militant mobilizations of
last October's "Gas War," as the Bolivian press has dubbed it.

But Quispe, himself a former guerilla leader, warned that the next "Gas
War" could be a real shooting war. He told Reuters July 16, "we could even
be obliged to take up arms. The strikes, the marches, are getting worn out.
We may have to opt for another form of battle."

He rejected the referendum as a fraud. "We want one question, whether to
nationalize or not. The government is deceiving us. We live in a gas-rich
nation but we have to cook with wood or animal fat."

Calling Mesa a "bearded conquistador," Quispe claimed his movement is
laying the groundwork for a revolution. "In many villages, inhabitants have
expelled the police. There is now a parallel power," he said.

Meanwhile, Mesa lined up support from leaders of neighboring nations with
whom he hopes to strike gas deals. In a pre-vote visit to Santa Cruz, the
eastern city which is the heart of the gas industry, Brazilian President
Luis Inacio da Silva pledged his strong support to Mesa and the referendum.
Also offering support was Argentine President Nestor Kirchner, who met with
Mesa in the southern city of Tarija days after the vote to discuss
increasing Bolivian gas sales to Argentina.

While the feared national protest wave to disrupt the vote failed to
materialize, there were local flare-ups around the country. On July 12,
Guarani Indians, whose lands have been affected by gas fields, launched
blockades of two central roads in Santa Cruz department, backing up
hundreds of vehicles. Presidency Minister Jose Antonio Galinod was sent in
to negotiate with representatives of the Bolivian Confederation of
Indigenous Peoples (CIDOB), but the blockades were not dismantled until
after the vote.

On July 13, campesinos shut down a gas pipeline valve at Santa Rosa del
Sara in Santa Cruz department, forcing a brief halt in the gas flow to
Argentina. The action was to demand improvements in local roads.

On July 13, some 100 campesinos from the southeastern plains region of
Chaco arrived in La Paz after walking 1,500 kilometers over 44 days to
demand the government cancel its gas deal with Brazil. They maintained that
the Chaco's gas fields are polluting the Rio San Alberto.

On July 16, protesters blocked a main avenue in El Alto, a sprawling
working-class city just outside La Paz which had been a focus of many
actions during the October campaign. To cries of "Out with the imperialists!" and "Nationalize the gas!", the protesters burned an effigy Mesa.

Meanwhile, business leaders in gas heartland Santa Cruz threatened to
launch a movement to secede from Bolivia if the industry is nationalized.
During the vote, Mesa was booed at a balloting center in Santa Cruz.

CIDOB, which represents 34 indigenous groups from seven of Bolivia's nine
departments, has its own proposal for local autonomous regions called
Original Communitarian Lands (TCOs), which would give Indians effective
control over many of the country's most resource-rich territories. CIDOB
hopes to join with other indigenous groups, trade unions and popular
organizations to convoke a constituent assembly in 2005 to rewrite the
constitution and ''re-found'' Bolivia. Speaking at the Second Summit of
Indigenous Peoples and Nationalities of Abya Yala, held in Quito, Ecuador,
days after the Bolivia vote, CIDOB's Javier Paredes told InterPress
Service: ''The constituent assembly must not exclude any sectors, and must
recognize the country's cultural diversity and multi-ethnic character."

Explicitly rejecting separatism, Paredes said ''CIDOB believes it is
important to maintain the unity of the country.'' But in a country where
self-identified indigenous people constitute over 60% of the population,
binding control over natural resources on indigenous lands could ultimately
prove a greater obstacle to corporate oil and gas development than even
nationalization.

---------------------------

Special to WORLD WAR 3 REPORT, August 9, 2004
Reprinting permissible with attribution

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interesting 10.Aug.2004 04:17

.

thanks. It's intersting to see the same 'Bolivarian Revolution' context of Venezuela and Chavez play out in oil politics in Bolivia.