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BOLIVIA: Gearing Up for a Second ‘Gas War’

Franz Chávez

LA PAZ, Mar 15 2005 (IPS) - Bolivia remained paralysed Tuesday by roadblocks and protests demanding the nationalisation of the country’s natural gas wealth, after attempts by human rights officials and activists to bring about talks between the government and social movements fell flat.

The protesters – trade unions and associations of indigenous small farmers – have been holding demonstrations for several weeks demanding that Congress pass a law that would increase the royalties paid by the foreign oil companies operating in Bolivia from the current 18 to 50 percent.

Bolivia’s 53 trillion cubic feet of natural gas reserves, worth an estimated 100 billion dollars, are the second-largest in South America after Venezuela’s.

The Central Obrera Boliviana (COB) trade union federation launched a 48-hour strike Tuesday, which will be supported by sporadic road blockages staged by campesinos (peasant farmers) in the western region of Bolivia.

For the past two weeks, around 2,500 trucks and buses have been stuck at roadblocks in the semitropical Chapare region in the central Bolivian department (state) of Cochabamba.

That area is a bastion of Bolivia’s militant associations of coca farmers, whose indigenous leader, lawmaker Evo Morales, is the head of the leftist Movement Towards Socialism (MAS), the party with the largest number of seats in the legislature.

The drivers of the vehicles have abandoned their cargo (including rotting vegetables) and walked out of the area in search of food, the president of the Chamber of National and International Transport, Enrique Martínez, said Monday.

The highway between the cities of Cochabamba and Santa Cruz is the main route linking the western part of Bolivia with the eastern mining region, which accounted for 600 million of Bolivia’s total exports of two billion dollars last year.

Defence Minister Gonzalo Arredondo has not ruled out the possibility of declaring a state of siege in the region to get things under control.

In October 2003, protests sparked by the government’s plans to export natural gas to the United States and Mexico through Chilean ports forced then president Gonzalo Sánchez de Lozada (2002-2003) to resign.

Some 70 people were killed when the police and army were called out to quash the social unrest, which was dubbed “the gas war”.

Sánchez de Lozada was replaced by his vice-president, Carlos Mesa, who responded to the protesters’ demand that he call a referendum to allow voters to decide what to do with the country’s abundant natural gas reserves.

Now, however, Mesa is pushing for a new energy law that is opposed by Morales, MAS, COB and indigenous and social organisations.

The tension reached a peak last week in this Andean country of 9.2 million people (71 percent of whom live in poverty) when Mesa threatened to resign.

Congress rejected his resignation, and the president persuaded the country’s traditional parties to sign a political “governance pact”, which included a guarantee that Congress would pass an energy law that the country’s foreign investors would accept.

But MAS, the strongest force in parliament, which comprised Mesa’s main support base until recently, refused to sign the “governance pact” and said it would continue the protests until achieving a 50 percent tax on the oil companies’ gas revenues and the nationalisation of the natural gas sector without compensation to the foreign oil corporations.

In the meantime, trade unions and civil society groups in the sprawling working-class city of El Alto, next to La Paz, failed to secure a promise by the government to cancel the contract with the Aguas del Illimani water company, and announced new protests in coordination with the Central Obrera Regional labour federation.

The firm, a subsidiary of France’s Lyonnaise des Aux, has charged high rates in Bolivia, South America’s poorest country, since the water services were privatised.

After plans for talks between the government and social groups to discuss the country’s natural gas law fell through, MAS, COB and the other social organisations decided to continue their protests.

The so-called “social summit”, which was to be held in the city of Cochabamba on Monday, did not take place because Mesa declined the invitation extended by the Permanent Human Rights Assembly and the People’s Defender (ombudsman), in their attempt to broker negotiations.

Instead, the president began his own round of meetings with the heads of the parties that had backed former president Sánchez de Lozada (2002-2003): Jaime Paz Zamora of the Movement of the Revolutionary Left, and Manfred Reyes Villa of the New Republican Force.

They offered Mesa support to pass a bill in parliament that would maintain the current 18 percent royalty paid by oil companies while creating an additional 32 percent tax, to be gradually implemented.

But Morales and the other leaders of the protests argue that the 32 percent tax would be deductible from other taxes, which means that in the end the state would not actually receive half of the oil companies’ profits.

Last week MAS signed a “counter-pact” with COB, Aymara indigenous leader Felipe Quispe, El Alto city council member Roberto de la Cruz, and other social and labour leaders.

After threatening to resign on Mar. 6, Mesa said a 50 percent royalty was not feasible, and expressed his fear that Bolivia would be isolated by the international community if a tax regime opposed by the foreign oil companies active in Bolivia were passed.

The oil companies that have invested a total of around three billion dollars in infrastructure in Bolivia include Spain’s Repsol-YPF, the Brazilian state-owned oil giant Petrobras, British Petroleum and British Gas, and Total of France.

The president pointed out that the international community provides the funding – credit and foreign aid – that goes towards paying a large part of the public sector salaries.