Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean | Analysis

BRAZIL: Nationalisation in Bolivia Ignites ‘Sub-Imperialist’ Public Opinion

Analysis by Mario Osava

RIO DE JANEIRO, May 13 2006 (IPS) - Bolivia’s nationalisation of its energy resources has triggered a public outcry in Brazil, demanding that the government take a stronger stance to “defend national interests” – undeterred by the fact that these particular interests happen to be located in other countries.

Domestic criticisms of the “weak” position taken by the Brazilian government are fuelling traditional nationalist sentiment even as they redefine it. No longer limited to defending national territory, dignity and resources, nationalism has now been expanded to encompass exported capital.

Brazil’s diplomatic corps and President Luiz Inácio Lula da Silva have come under heavy fire for recognising Bolivia’s “sovereign rights” over its own natural resources. Lula’s leadership role in South America and his foreign policy strategy have been deemed failures by former ambassadors and international-relations analysts and in newspaper editorials and commentaries.

“Capitulation,” “humiliation” and “incompetence” were some of the words used to lambaste Brazil’s “spineless” response to both Bolivia’s measure and the behaviour of Venezuelan President Hugo Chávez, commonly perceived as Bolivian President Evo Morales’ “mentor” and as an emerging leader in the region. There was no lack of calls for retaliation.

Accusations of “populism” are being cast to undermine the legitimacy of the “aggressive” Chávez and Morales governments, whose increasingly strong ties with Cuba have revived old Cold War paranoias. A number of critics have complained that South America is “falling apart,” rather than evolving into the cohesive community envisioned by Brazil.

On one extreme, the divided subcontinent would include the anti-imperialist “populist axis” of Bolivia and Venezuela; on the other, countries such as Colombia and Peru that have embraced free trade with the United States. In the middle would be the “moderate” social democratic-style governments, according to some observers, like Brazil and Argentina.

Critics say Lula is losing leadership to Chávez, thus feeding into the opposition’s interest in weakening his strong chances for reelection in October. But the argument also hurts national pride.

This campaign calls for Brazil to take tough action against Bolivia’s May 1 reassertion of state control over its natural gas industry. Lula’s detractors argue that the fundamental issues at stake can be boiled down to “defending national interests” and honouring contracts between the two governments and their oil companies.

The seizure of assets controlled by Brazil’s state-run oil giant Petrobras, which has invested close to 1.5 billion dollars in Bolivia, met with strong opposition.

Additionally, critics have brought up Brazil’s past generosity, noting that the country provided Bolivia with 52 million dollars in debt relief and opened its market to Bolivian exports, which grew from 23 million dollars in 1999 to 990 million dollars last year, thanks to natural gas transported through the Petrobras-built pipeline completed in 1998.

The most impressive figures, however, highlight Petrobras’s economic clout in Bolivia. The Brazilian company accounts for 18 percent of Bolivia’s gross domestic product, 24 percent of its tax revenue, 95 percent of its hydrocarbon refining, and 23 percent of distribution of oil and gas derivatives, while it holds 46 percent of Bolivia’s natural gas reserves.

While these percentages are indeed extraordinary, Brazilian companies have a major presence throughout most of South America. The Ambev brewery has acquired subsidiaries in several countries, the Odebrecht construction company has carried out a variety of projects and Brazilian brands are found almost everywhere.

Petrobras, which owns many gas stations in Argentina, is also facing problems in Ecuador, where environmental and indigenous movements are protesting its exploitation of a deposit in Yasuní National Park.

Brazilian capital is in a period of transnational expansion, particularly into neighbouring countries. In this context, Bolivia’s recent decision delivered Brazil its first nationalistic “slap in the face,” according to Clovis Brigagao, director of the Centre for Studies on the Americas at the private Cándido Mendes University in Rio de Janeiro. But it will not be the last.

The conflict, which has triggered “hysterical” reactions in some Brazilian sectors, including the press, according to Janio de Freitas, political commentator for Brazil’s Folha de São Paulo daily, will only escalate.

Disagreements regarding Petrobras compensation negotiations and the projected rise in gas prices have already increased tension between the two countries.

Petrobras is a symbol of Brazilian nationalism; its founding in 1953 was the result of a broad-based popular mobilisation that was revived in the 1990s to bloc privatisation of the company.

The outrage against Bolivia’s move currently articulated by key opinion leaders will likely spread through the Brazilian population when Bolivia inevitably hikes gas prices. Bolivian gas covers more than half of all consumption in Brazil.

Another wave of protest will undoubtedly occur when the Bolivian government implements its announced agrarian reform and expropriates property owned by Brazilians.

Brazil’s expansion has included hundreds of thousands of farmers who have crossed borders, mainly to occupy land in Paraguay. Bolivia is also home to 30,000 Brazilian immigrants, among them landowners who produce a significant proportion of Bolivian soy exports – from 35 to 60 percent, according to different estimates.

Morales announced that he would expropriate unproductive land and illegal properties, such as those belonging to foreigners – mainly Brazilians – within a 50-kilometer-wide belt along the border.

The expression “subimperialism” was coined in the early 1970s, taken from a comment made by then U.S. President Richard Nixon that Latin America would follow in the footsteps of Brazil.

The charge was ideological: the Brazilian army dictatorship was exporting its doctrine of national security and was serving U.S. interests, but its “economic miracle” and consequent growing power also posed a potential threat.

Today, Brazil has more concrete interests to defend, such as capital invested in international markets. The “sub” would signal a lesser, subregional power.

But analysts have often said that Brazil could never be an imperialist force, because of its culture and the warmth of its population with its significant immigrant base. Furthermore, the country’s vast size and largely undeveloped domestic market û with a major part of the population still excluded from the consumer market û mean that no immediate foreign expansion is necessary.

Brazil’s initial public reaction to the Bolivian nationalisation measure, however, seems to indicate that at least some sectors would not hesitate to abandon the good-neighbour and non-interference principles espoused in Brazilian diplomatic strategy, in favour of a “big stick” policy.