|
http://www.isn.ethz.ch/news/sw/details.cfm?ID=11511
Bolivian crisis could affect gas distribution Regional shifts in gas production and distribution follow in the wake of Bolivia's political crisis. By Sam Logan for ISN Security Watch in Buenos Aires (20/06/05) After generations of marginalization and mistreatment at the hands of corrupt Bolivian leaders, two-thirds of Bolivia's 9.1 million citizens have become a powerful force for change in the heart of South America. Evo Morales, who leads the Movement Towards Socialism (MAS), has successfully organized a critical mass of poor indigenous peasants, workers, miners, transport drivers, coca growers, and others. Since 16 May, with paralyzing roadblocks and street protests, they have effectively pursued their political agenda for the nationalization of Bolivia's natural resources. These blockades have cost the Bolivian economy over US$20 million a day. They have closed off access to Peru, Argentina, Brazil, and Chile and constricted supplies of food and gas entering the Bolivian capital, La Paz. Ultimately, the protests led to the resignation of Bolivia's embattled president, Carlos Mesa, on 6 June, after only 19 months in office. In the wake of his resignation, confidence in Bolivia as a regional source of cheap natural gas has waned, forcing companies and governments to make tough decisions. Mesa's resignation pushed Bolivia closer to the edge of disintegration, creating a power vacuum that exposed the Bolivian government's inability to simultaneously appease international companies with massive stakes in the country's natural gas as well as the poor and disillusioned electorate. Once Mesa's resignation was accepted late on 8 June, political forces from the country's resource-rich region of Santa Cruz, and political forces from the poor highlands, represented by Morales, began making demands and hardening their positions. Army alerted The voters of Santa Cruz region, who comprise about one-third of Bolivia's electorate, control a majority of the country's economic engine. They have demonstrated a desire to secede from the union on numerous occasions, with referendums revealing that over 60 per cent of the region's population favors secession. With Mesa's resignation effective, millionaire and Senate President Hormando Vaca Diez from Santa Cruz was next in line to become president in accordance with Bolivia's constitution. But Morales and Chamber of Deputies chief Mario Cossio Cortez - both fierce opponents of Diez - said in an 8 June statement that the indigenous movement was "unstoppable" and a civil war could be triggered if Congress continued to block indigenous demands. With a choke-hold on the country, Morales appears to be in a position to make good on his threat. Meanwhile, the Bolivian Army, led by Admiral Luis Aranda, was put on high alert. Aranda insisted there would not be a coup and that the Bolivian military would protect constitutional law and the rule of democracy. As early as 4 June, Bolivian Episcopal Conference president and the bishop of El Alto, Jesus Suarez, had begun talks with the Congress in hopes of avoiding bloodshed. As tensions heightened, the church and army came together to broker an outcome that would hopefully avoid bloodshed if either Diez or Cossio assumed the presidency. Finally, just after midnight on 10 June, Bolivia's third presidential candidate, Supreme Court Chief Justice Eduardo Rodriguez, assumed the presidency. Content with Congress' decision, Morales announced that he would halt the blockades in order to remove the pressure on Rodriguez and allow him to assemble his government. But he also made it clear that the protests and blockades could easily resume if necessary. According to Bolivia's constitution, Rodriguez has 180 days, or until 10 September, to organize and hold general elections. A constitutional assembly will likely follow soon afterwards, and then another round of general elections once a new constitution is signed and submitted for popular approval. He has now announced that general elections will be held within six months The pillar of instability While Bolivia may have narrowly escaped a civil war earlier this month, political stability is still a distant prospect. The question remains whether the country's vast natural gas resources will be controlled by the state - as the laborers and indigenous peoples are demanding - or shared by a group of international energy companies. Bolivia is second only to Venezuela in the region as a known source of natural gas. Argentina, Brazil, and Chile all depend on Bolivian natural gas. As demand has grown over time, and Venezuelan President Hugo Chavez's intentions have become less predictable, Bolivia's resources have increased in value. Bolivia is home to some 9.1 million citizens, who contribute to an annual gross domestic product (GDP) of US$7.8 billion. Access to natural gas reserves of 800 billion cubic meters has been valued at US$70 billion. It is the goldmine at the center of the debate that has perpetuated political instability in Bolivia for over two years. In October 2003, after weeks of protests over the government's handling of the natural gas issue, Gonzalo Sánchez de Lozada resigned from the presidency. By constitutional law, his vice- president, Mesa, took control of Bolivia's executive branch. A similar scenario was repeated under Mesa, who tendered his first resignation in early March in the face of paralyzing blockades and protests. Congress rejected Mesa's March resignation, and intense debate over Bolivia's hydrocarbon legislation followed. Morales and the MAS party demanded that Bolivia nationalize the natural gas industry, levy heavy taxes on international companies wishing to export gas from Bolivia, and use revenues to improve the lives of millions of poor Bolivians. Congressional members concerned about Bolivia's competitive position in international gas markets refused to concede to demands that would force international companies to pay premium rates for Bolivia's natural gas, which would be extracted under a national monopoly. The contentious hydrocarbon bill In its current form, the hydrocarbon bill places a 32 per cent extraction tax on foreign companies in addition to the previous 18 per cent royalty tax. It also increases state controls, but falls short of complete nationalization - the central demand of Morales and his MAS supporters. When the hydrocarbon bill was finally passed by Bolivia's Congress, Mesa refused to sign it into law. Pressing his advantage, Morales stepped up the protests and roadblocks. Buckling under the pressure, Mesa resigned for the last time on 6 June. This time around, Congress accepted his resignation with a view to ending the protests. But it is doubtful whether Mesa's successors will have better success. On 12 June, Mesa advised foreign companies fearing nationalization to be patient. Since 1997, international companies have collectively invested some US$3.5 billion in the Bolivian gas sector. Facing the nationalization of their assets, some companies have threatened to take Bolivia to the international courts. Mesa agreed that they may have a case, but cautioned that such action could push the country to the brink of civil war - a situation he said would benefit no one. In the meantime, the demands of the poor from the highlands and the threats of secession by the rich in the lowlands surrounding Santa Cruz have polarized the country. The weekend before Mesa's resignation, government officials from Chile, Uruguay, Paraguay, and Brazil discussed the possibility of running a pipeline from Peru's Camisea gas project through Chile, around Bolivia, and into Southern Brazil. Considering Bolivia's proven reserves of natural gas, and tense relations between Chile and Peru, this would not have been a viable proposition even weeks ago. But the price tag on this ambitious infrastructure project has been reported at around US$2.5 billion, which will prove another stumbling block. Nevertheless, talks are underway, and more announcements are expected soon. Peru will certainly not object to becoming the region's short-term natural gas supplier. Shifting gas production and distribution The Spanish energy company Repsol YPF has already announced its intent to halt the development of a liquefied natural gas (LNG) project to export Bolivian gas to North America. Due to the instability in Bolivia, the company has decided to move to Peru, where it plans to develop a LNG project to export gas from the Camisea gas fields. In Argentina, where cheap Bolivian gas helps to keep the price of gas low, the government, wary of Bolivia's situation, has begun exploring the possibilities of investing in an expensive process of offshore exploration and production. In Brazil, both the energy and mining industries as well as the federal energy company Petrobras have already drawn up contingency plans for the event of an interruption of gas exported from Bolivia to Brazil. Bolivian gas contributes up to 20 million cubic meters a day (Mm3/d) of Brazil's current 36 Mm3/d demand. Those who oppose nationalization believe that international companies have the investment capital necessary to tap into Bolivia's vast gas fields. Without their participation, some say Bolivia would be unable to monetize the very prize for which her people are fighting. They also say that it would behoove Morales, his MAS supporters, and other Bolivian leaders to recognize this reality - and thus to take care not to force the mutual exclusivity of political stability and international investment in the fight to bring justice and democracy to their struggling nation. Yet observers cannot ignore that within the fiery, anti-capitalist rhetoric, Morales strikes a chord of truth. His fight is in some ways noble. Bolivia is the poorest country in South America, where the richest 20 per cent hold some 50 per cent of the wealth and the poorest 20 per cent retain just under 5 per cent. Poor Bolivians have been marginalized for years, and it is easy to see how the nationalization of Bolivia's gas industry, a central plank in Morales' platform, could be regarded as a silver bullet solution. Bolivia's leaders, much like the leaders of other South American countries, have for decades pushed a private-sector agenda that benefits upper-class Bolivians while leaving the poor behind. This private-sector policy can be easily perceived as back-room dealing to swindle the margins of society while enriching those in power. For decades, Bolivia's poor have suffered in relative silence. Now, with a charismatic and politically savvy leader, Bolivia's marginalized masses finally have a unified voice. It remains to be seen, however, if Morales will keep in mind what is best for his followers with an understanding of the realities of globalization. If not, Morales, in his fight to bring equality and justice to the poor, may become the very force that unravels the last threads of unity that hold this polarized nation together. Sam Logan is a freelance journalist based in Buenos Aires. He has covered politics, security, economics, and trade in South America since 1998. Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM Yahoo! Groups Links
|
