16 June 2005 Edition

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Bolivia's resource wars

Plenty of oil and gas, but plenty of poverty

Finally, after years of campaigning, the US and Britain have agreed a plan to cancel the debt of 18 of the world's poorest countries. It is good news for those who have been working on this issue for the last few years, even before the worldwide Jubilee 2000 campaign was launched. However, this announcement is only a drop of good news of a sea of desperation, as many other countries, who will not benefit from the "debt amnesty", continue to struggle to make ends meet, mostly at the expense of their populations.

Also, for many of these countries, debt repayments are only part of a bigger picture of economic injustice. Some states whose populations live in poverty own vast amount of natural resources that are being exploited to the benefit of a few in those countries, and of many in the Western World.

It is the policies of privatisation imposed by international financial institutions, like the IMF and the World Bank, and the unfair trade conditions that open developing countries market to "First World" exports, while closing Western markets to their products, that keep African, Latin American and Asian countries on the brink of bankruptcy. Those policies may force those whose debt is cancelled today to incur further debt in the near future.

Let's look at Bolivia. This is a country rich in gas and oil; however, 68% of its population — mostly indigenous people — live under the poverty line.

In the latest phase of Bolivia's "gas wars", President Carlos Mesa resigned on 6 June under heavy pressure from social movements to stop the privatisation of energy resources and to nationalise hydrocarbons. Peasant farmers took over oil fields, transportation was paralysed and international embassies had even begun to put in place evacuation plans.

On 9 June, the protestors forced President of the Senate Hormando Vaca Diez, the second biggest landowner of Bolivia, to decline the Presidency. Instead, the head of the Supreme Court, Eduardo Rodriguez, was installed as a compromise President and automatically triggering new elections.

Carlos Mesa strove mightily in his 19 months in office to build a bridge to the poor and social movements. But in the end, he had his hands tied by the IMF and the oil companies.

Hormando Vaca Diez represents the old elite, a gruff, wealthy Santa Cruz businessman who thought that the way you deal with protests is to send out the army. The new president, Eduardo Rodríguez, is connected to the Revolutionary Nationalist Movement (MNR). Rodríguez has announced he will be calling a presidential election in 150 days. However, some of the demonstration's leaders, like Evo Morales, are calling for a general election to take place too.

Meanwhile, some demonstrators, like those in El Alto, a shantytown in La Paz, haven't let themselves be demobilised so easily. As long as "the issue of hydrocarbon nationalisation" has not been touched upon, as Edgar Patana of the Bolivian Workers' Federation said, the demonstrations and blockades will continue.

So, although some kind of normality is returning to La Paz, the capital of the country, and Santa Cruz, the biggest and richest city in Bolivia, the situation has not been resolved. However, the demonstrations that took place in La Paz and Santa Cruz were staged by opposing factions in the Bolivian social war.

Bolivia is a country of huge social and economic divides. The powerful in the Latin American country are a tiny elite that do not share the interests of the nation's poor and Indian majority and are happy to assume that corruption, foreign aid and an economic system rigged to their advantage are ok as long as they maintain their privileges. They took to the streets of Santa Cruz to oppose the call for nationalisation.

On the other hand, the poor, the indigenous, miners, labourers and others are demanding the nationalisation of oil resources and a rewriting of the country's constitution. These are the people who opposed a status quo based on the acceptance and implementation of the IMF/World Bank policies and the following of US orders in the war on drugs.

They control La Paz, and follow the leadership of residents' associations, trade unions and the political organisation Movement towards Socialism (MAS), which is the main opposition party in Congress and is headed by coca farmer Evo Morales MP. However, the motor behind the protests is discrimination and lack of opportunities.

Carlos Mesa took power in October 2003 after opposition to government plans to continue with the privatisation of resources was violently crushed by the country's security forces, who killed over 20 people in El Alto.

Mesa promised he would increase the oil companies' payments to the state and that the money will be used for social reform. However, the powerful in Santa Cruz understood this policy as a threat to their prosperity.

To find a solution to this internal conflict, in July 2004 Mesa decided to hold a referendum about the abolition of the 1989 Hydrocarbon Law, the opening of a public oil company and the export of gas, among other issues. The reform was supported by a majority of the electorate and Congress passed the new legislation.

But despise the implementation of some of the required changes and the increases of tax to be paid by foreign oil companies, the new legislation did not satisfy anyone. The big oil companies threatened to denounce the country to the WTO. This is the reason why Mesa decided to delay ratification of the legislation and marked the beginning of the end for his government, bringing the poor onto the streets.

Announcing his resignation, Mesa blamed his country's problems on a 'few' imposing their will on the rest of the country, then said he didn't want to put the blame on anyone else. To the ranks of that few have been added the municipal government of the city of La Paz, including the mayor himself, Juan del Granado, who had announced early on the evening of 6 June a general shutdown of all the institutions of La Paz to demand hydrocarbon nationalisation.

The indigenous and socialist leader Evo Morales has also demanded "nationalisation in fact" of the country's gas and oil industries, a demand that in previous weeks he had avoided in favour of demanding higher taxes on oil companies and a constitutional assembly. Morales now wants the government to take over the oil fields of the country to implement the Bolivian constitution.


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