| Winds
of change are blowing in Bolivia at present, and probably
not without reason. The country is witnessing political
and social unrest of a nature and intensity unlike
anything seen earlier. This crisis ridden nation has
the distinction of being the poorest country in Latin
America, with poverty levels as high as 70 percent.
6 out of every 10 persons in the country and 9 out
of every 10 in the country side live in poverty! Unemployment
rates are expected to reach 10%, whereas 13% of the
employed are thought to be actually underemployed.
The economy, which is currently in recession, is barely
growing at a rate of 0.16 percent at last count by
the IMF (Mar-Jan 2002)[1]
The poorest 10 percent of the country's 9 million
people earned 0.3 percent of total per capita income
in 1999, while the richest 10 percent received 42.3
percent.
Such disparities are the root cause behind the general
discontent among the masses towards the governing
classes. Bolivians recently forced out their newly
elected president- the pro free-market and anti- drugs
campaigner for the US, Gonzalo Sanchez de Lozada out
of office after he announced plans of exporting Bolivian
natural gas to North America via Chile. This came
in the wake of unprecedented protests and demonstrations
by the civil society following the announcement, by
student groups and unions which left at least 70 person
dead and countless injured.
The massive public protests and the deaths following
the announcement to export gas using Chile's ports
caused the leader of the 'New Republican Force"
Manfred Reyes Villa a socialist, to withdraw support
from the newly elected government, which forced Lozada
to resign and flee the country and the subsequent
selection of Carlos Mesa to the post of president.
These demonstrations have been dominantly spear headed
by the indigenous Quechua and the Aymara Indians led
by their leaders Evo Morales of the 'Movement towards
Socialism', joined by the native Indian guerrilla
leader Felipe Quispe. The elections saw Lozada winning
by a slight margin over Morales. Morales had already
emerged as a force to reckon with since last year,
when he came a close second to Lozada, who gained
22.5 percent of the votes, while Morales came a close
second with 20.94 percent.
The last government lead by Jorge Quiroga had submitted
a report making an offer of selling gas to the Californian
market. This multi-million dollar project required
the joint collaboration of four nations, two in North
America and two in the South. The demand side would
involve Mexico and the U.S whereas the supply side,
Bolivia and one other Pacific nation, either Peru
or Chile. The project would involve the drilling of
16 wells up to 5000 meter deep. The drilling alone
requires a US $480 million investment, with the total
project investment reaching US $ 1.7 billion[2].The
government had left the decision on the choice of
country for the proposed pipeline for the next incoming
government.
Lozada's announcement meant that the natural gas would
be exported to Mexico and US via a pipeline trough
Chile which is a cheaper option by about $600 millions
as against the Peruvian option. Chile is seen as a
rival after 1875 when it won Bolivia's only accesses
to the Pacific Ocean in war. Bolivians see the lack
of access to the sea as the main reason for the nation's
impoverishment and economic backwardness. Diplomatic
relations between the two countries were cut off in
1978. Moreover the gas deal would completely privatize
the sector with foreign firms drilling, pumping and
buying the gas, thus the major chunk of the revenue
going to the private firms, where as a mere 18% of
the returns falling into the hands of the Bolivians.
The announcement by Lozada of his plans sparked off
widespread and intense protests across the country.
The reservations of the people with the proposed deal
drove the peasant groups, the student unions and the
Indians, who have been opposing all forms of foreign
interventions, to react violently, leading to the
country wide road blocks and protests. Thousands of
people took to the streets and demanded Lozada's resignation.
Protests in many regions resulted in foreign tourists
being stuck in their vehicles for days, which invited
police to come in to secure their safe passage. The
clashes which followed between the police and the
protesters saw police using excessive force sparking
of violence and rioting, leading finally to the deaths
of 70 people. Such a repressive move by Lozada not
only fueled the fire of mass discontent but also led
to the withdrawal of support by key members in the
Lozada coalition.
The Indians, the unions and the students all want
the gas industry to be nationalized for employment
and income generation of the locals first. They demand
that the future of Bolivia's natural gas be decided
by its people and not be controlled by a few transnational
oil companies robbing the Bolivians of their natural
wealth.
However, many observers feel that Bolivia may miss
the boat on natural gas. Bolivia has the second largest
natural gas reserves in Latin America after Venezuela,
totaling some 55 trillion cubic feet. If Bolivia could
successfully export its gas internationally, it would
bring in much needed and substantially large foreign
exchange inflows and boost the economy like Venezuela,
Argentina and Brazil.
Neighboring Peru is leading the natural gas race and
is already putting finishing touches to its end of
an 18 year deal to sell 2.7 million tons of gas annually
to Mexico from its Camisea field.
"Peru has shown the North American market that
it has the capacity, the will and the political backing
to deliver natural gas while in Bolivia we're stuck
in existential angst that is giving Camisea a big
advantage," said Carlos Alberto Lopez, Bolivia's
former deputy minister of hydrocarbons[3].
"There has only ever been a market for one project,
never for a joint project and still less for two projects.
Bolivia is about to miss the boat," he told Reuters
in a phone interview.
With the Mexican market under its belt, Peru is certainly
eyeing the big US market. Meanwhile Bolivia is still
undecided about the fate of its gas reserves in the
face of intense debate among the free market proponents
who favor exports and the socialists who want to nationalize
the industry.
Thus there is mounting pressure, both economic and
political for any government in power to reach a decision
soon on the choice of the route the pipeline should
take. This is especially so if it hopes to comply
with the timetable outlined for the plan to export
gas to the US and reap much needed economic benefits
from the abundant natural reserves. The Bolivians
also need to beat the Peruvians to the race before
the latter establishes itself as the sole provider
of natural gas from South America. According to a
recently submitted report by the US department of
energy to the congress, the US and its oil companies
are eyeing the Latin American reserves as the second
most important source after the Gulf region and view
Bolivia among eight other nations as a potential supplier[4].
Besides the US, the British and the French too are
interested in the world's biggest source of clean
fuel. British energy secretary Brian Wilson met the
foreign minister and the hydrocarbons minister last
year to talk about the offer made by the Pacific LNG
consortium made up of British Gas, British Petroleum
and Spain's Repsol-YPF- who favor the Chilean option.
On the other hand, the Belgian Transnational and French
Total E&P Norge As are backing the Peruvian option.
The privatization option is the quickest option of
an early exploitation and sale of the countries gas
but not necessarily the populist one. The nation and
its people have rightly taken the decision making
power in their own hand, however they would have to
decide soon if they hope to reap any economic gains
at all from their largest natural resource.
To add to their worries concerning the natural gas
sector, Brazil is demanding a renegotiation of prices
and volumes of its natural gas imports from Bolivia.
Brazil's federal gas company Petrobras has a contract
with the Bolivian state gas supplier Yacimientos Petroliferos
Fiscales Bolivianos, under which a 3,150-kilometer
pipeline has been built between to two nations in
which Petrobras has 51% stake and is committed to
import at least 24 million cubic meters of gas daily
from 2004 onwards.
However the market conditions which were foreseen
since when the deal was signed have changed for the
worse. The 1999 currency crisis hit Brazil's economy
hard, making investors flee the electricity industry.
As a consequence the development of the gas fired
electricity industry has been much below expectation,
thus envisaged levels of sale of natural gas were
never reached.
As a fall out, the Brazilian officials have been demanding
a revision of the prices and volumes in the contract
due to a slump in local demand as well as the removal
of the "take or pay" clause under which
Petrobras must pay for a certain volume of natural
gas even if it does not use it. Petrobras currently
imports about 13 million cubic meters of Bolivian
gas per day.
Amidst widespread opposition and protests against
the decision to export the countries gas to North
America, the newly elected president Carlos Mesa has
announced that he will call for a public referendum
on the fate of the nation's gas reserves. While on
the one hand the increasingly popular Evo Morales
and his followers totally oppose any exports before
the nationalization of the industry and fulfillment
of domestic needs, one the other hand civil leaders
and businessmen in the southern Bolivian state of
Tarija, which is home to most of the nations gas reserves,
are against the public referendum and want the gas
to be exported for economic gains of all and favour
the cheaper Chilean option.
The left parties and the extreme leftist like guerrilla
leader Felipe Quispe are of the opposing opinion that
the high level of corruption in the government would
never let the benefits of such sale reach down to
the masses.
Evo Morales the Indian coca proponent, who has gained
unprecedented popularity among the two-third Indian
population of Bolivia after leading a bloody protest
against the US backed coca eradication campaign, is
now seen as a potential savior of the people. Son
of a peasant himself, this ex-miner has become the
voice of the Indian majority in Bolivia, who have
lost all trust in the politicians and the two decade
old economic reform progress which they feel has done
nothing to improve their lot. To top it all, the US
backed ban on coca cultivation has severely hit the
farmers. Morales wants the lifting of the ban on coca
and legalization of cultivation. He also wants the
nationalization of all natural resources like natural
gas which Lozada wanted to export through foreign
consortiums. He views the coca ban and the new economic
policy as imperialist interventions of the US in Bolivia
calling for an anti-capitalist, local, indigenous
and socialist future for his country[5].The
response he has received has been overwhelming[6].
The new president Mesa and thus Bolivia is faced with
the tricky task of balancing on one hand the view
of the majority of the much impoverished and impatient
indigenous population who are against gas exports,
especially to the imperialist US and the view of the
economists and the orthodox right wing political elite
who see the countries natural gas reserves and its
export as the difference between the nation's economic
recovery and persistent recession. The decision now
rightly lies with the people, who however will need
to reach a decision quickly.
November 25, 2003.
[1] http://news.bbc.co.uk/1/hi/business/1400337.stm
[2] http://www.commondreams.org/headlines03/1014-05.htm
[3] http://story.news.yahoo.com/news?tmpl=story&u=/nm/20031020/fin_enr/bolivia_gas_1
[4] http://allafrica.com/stories/200310280098.html
[5] http://www.networkideas.org/themes/trade/jul2002/tp09_Bolivia.htm
[6] http://www.networkideas.org/themes/trade/jul2002/tp09_Bolivia.htm
Source : http://www.gasandoil.com/goc/news/ntl24023.htm
http://search.news.yahoo.com/search/news/?c=&ei=UTF-8&p=bolivia&nytp=1
Peter Beaumont, foreign affairs editor, Sunday October
26, 2003
The Observer.
http://www.spectrezine.org/global/bolivia3.htm
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