”Analyse av den aktuelle politiske og sosio-økonomiske situasjonen i Latin Amerika”

Bolivia

The current situation in Bolivia is marked by the nationalization of the natural gas industry, which was announced on May 1^st. Under the terms of Decree 28701, the Bolivian government has declared absolute control over the country’s energy resources, thus changing the conditions of its relationship with international energy companies. Although this measure had already been announced during the MAS electoral campaign in 2005, the news caught both observers and companies by surprise, while receiving ample support from social movements and popular sectors. It remains to be seen if the fulfilment of this electoral promise will help dissipate other pending issues from the political agenda.

Actors

The current administration is led by Evo Morales, from MAS – Movimiento al Socialismo, a political front composed of several social movements and popular organizations, including indigenous movements, grassroots organizations (including women’s groups), and coca-farmers. MAS won the presidential elections in 2005 with 53,7% of popular support, while getting 72 out of 130 seats in the Chamber of Deputies, and 12 out 27 seats in the Chamber of Senators. The second largest political party in Bolivia is PODEMOS (Poder Democrático y Social), which obtained 28,6% of the vote. The other two parties represented in the national congress are UN (Frente de Unidad Nacional) and MNR (Movimiento Nacionalista Revolucionario), with a few seats each. MAS identifies itself as the authentic representatives of the indigenous peoples, peasants and workers. Indeed, electoral support testifies to this broad representation. The inclusion of middle class intellectuals and professionals in the government also signal a significant level of support among these groups. Voter turn-out in the last presidential elections was high, reaching 85% of the total number of eligible voters.

Popular support for MAS has its background in a process of increasing political awareness and organization since the early 1990s among the poor and indigenous Bolivian population, who constitute the majority of the population (62% of total population, the most predominantly groups being the Quechua and Aymara)². In Bolivia, poverty presents serious challenges, particularly among the indigenous population. 60% of the total population live under the national poverty line; most of these are indigenous. The 500 years of resistance celebration provided a framework for the formulation of popular demands, grievances and alternatives in terms of ethnic and cultural identity, destitution, and the need for the restitution of the state based on “naciones y pueblos originarios” (indigenous peoples). This lead in 1995 to the organization of the Asamblea por la Soberanía de los Pueblos (ASP – Assembly for People’s Sovereignity), which established the need to work towards a “political instrument” to enter the arena of (electoral) politics. MAS considers itself to be this political instrument. This view however, is contested by particular sectors of the social and popular movement, some of which are highly critical of the MAS government.
COB (Central Obrera Boliviana) is one of the contesting forces. COB is the main trade union federation in Bolivia. It was founded in 1952 following the national revolution that brought the Revolutionary Nationalist Movement to power. COB encompasses a number of organisations, some of which are supportive of the new government (such as coca-producers CFTC, Coordinadora de Federaciones del Trópico de Chapare, President Morales own organization). Others include FSTMB (Union Federation of Bolivian Mine Workers) and CSUTCB (Confederación Sindical Unica de Trabajadores Campesinos de Bolivia), the latter representing peasant and indigenous communities. CSUTCB is also critical of MAS, challenging its position as “political instrument” of the ASP. COB played a significant role in the series of demonstrations that brought down President Carlos Mesa in 2005, yet it opposed the elections of December 2005, calling instead for a constitutional assembly if real structural changes in Bolivia were to be achieved. COB and CSUTCB leaders have gone as far as denouncing Evo Morales (and MAS) for betraying the popular cause and being a “reformist”.
The popular sector in Bolivia cannot be considered as homogenous, in spite of the success in rallying support for MAS in the past elections. The indigenous movement includes a variety of groups with different views on dialogue and compromise, and different visions of what the Bolivian state and society should be. It is difficult to assess the influence of more radical actors upon public opinion. Yet the need to maintain a position of leadership in the popular sector is being taken very seriously by the current government (see next section).
The Santa Cruz Civic Committee (Comité Cívico de Santa Cruz) is a group of private sector entrepreneurs calling for the need of regional autonomy to secure the welfare of the Santa Cruz population. This region is considered as the economic centre of the country, contributing with almost half of tax revenues for the state budget. According to the committee, the richness of Santa Cruz subsidizes the rest of the country. The committee demands a national referendum for regional autonomy, and counts with ample support in the region, as demonstrated through mobilizations and strikes. Critics of the civic committee identify its members as representatives of power-holders and transnational corporations.
Issues & Dynamics

The issue dominating Bolivian politics today is the management of natural resources, particularly natural gas. The contested character of this issue led to almost continuous popular demonstrations and unrest since 2003, and the fall of two presidents, Sánchez de Lozada and Mesa. Previously, in 2001, social unrest derived from what is known ad “the water war” in the Cochabamba region. During the electoral campaign, MAS formulated its position on natural resources in terms of national sovereignty: the Bolivian state had the right to regain sovereign control over its natural resources for the benefit of the entire population. This discourse proved powerful and inclusive, as it announced the redistribution of resources among all, particularly the poor and marginalised.

Elections for a constitutional assembly are scheduled for July 2006. The need for a new constitution was one of the main issues raised by Mas during its presidential election campaign. This has been a long awaited demand from the popular sectors. The outcome of these elections, as well as the orientation of the assembly itself will depend much on the MAS performance and perceived willingness for change, particularly regarding natural gas, but also other issues such as collective rights of indigenous groups, coca-cultivation and international trade agreements. Bolivia is the second largest producer of coca-leaf, which besides being used for traditional purposes and local consumption by the indigenous population, it is also the main input for cocaine. Recent attempts by the Bolivian government to remove the coca plant from the international list of illegal substances failed. Eradication programs have been put on hold, but definite measures are yet to be taken.
As mentioned earlier, MAS has a broad front of support among the popular sector, but it also has critics. The need to counteract its critics, both from within popular organizations and from opposition parties in Congress, as well as to secure popular support for implemented policies and reforms has led the government to establish in April 2006 an umbrella organization or front called “Estado Mayor del Pueblo” (People’s Chief Staff) as a body “to defend and support the government of Evo Morales”. The front is led by MAS peasant leader Román Loayza. The new front is going to have a nation-wide structure through “local committees in defence of democracy”, in order to mobilize local support for government reforms. Given the contested nature of the reforms envisaged by the MAS government, this support will be essential to legitimate state action. However COB, among others, has accused the government of trying to split the popular sector by creating parallel organizations co-opted by the State. It should be noted that the “Estado Mayor” bears some resemblances to the “Misiones” established by President Hugo Chávez in Venezuela to rally support for his reforms. It remains to be seen in how the Estado Mayor will actually relate to well established social and popular movements in Bolivia.
Natural Resources

As it was mentioned earlier, natural gas is the main issue within Bolivian politics today. Even though President Morales also mentioned the future take-over of other national resources, these will play a minor role in economic policy – with the possible exemption of mining. In the case of oil, for example, production is lower than national consumption, and imports would still be needed (and promised at a subsidized rate by Chávez recently).

The extraction of natural gas on a mayor scale is a relative new phenomenon in Bolivia. A gas pipeline to Southern Brazil first opened in 1999 after heavy investments of USD 2.5 billion by foreign companies. The private sector’s growing interest in the energy sector was initiated during the implementation of the structural adjustment program, through the induced deregulation of the sector, leading to the dismantling of the state company Yacimientos Petrolíferos Fiscales de Bolivia (YPFB). YPFB was transformed into private companies Andina and Chaco. Foreign companies were invited to invest in the country and Spanish Repsol, British Gas and the Brazilian state company Petrobras became the most active companies in Bolivian energy sector. The country has the second largest gas reserves in South America (see table 3), a favourable position for exports, and what was regarded as a “legal framework favourable for investments” (WB 2005). When the gas started to flow out of the country and further plans of export to USA were made public, popular discontent rose. A large sector of the population felt that they were not getting their share of gas incomes. The state tax income was too small to make any difference in redistribution, only USD 200 million in 2002 according to the World Bank (2005). The fixed distribution keys meant that the producing lowland departments of Santa Cruz and Tarija got what to others seemed like an unfairly high share of the rents in addition to the benefit of the activity itself. Plans by former President Mesa to start exporting gas cheaply to USA, and even using the ports of their arch rival Chile, was just the final drop that leads to large scale popular revolt against the president. He introduced a new petroleum law which was subject to and approved by a national referendum last year. Among other things, the new law increased the net tax rate from 18 to 50 %.
Nationalisation of the energy sector soon became the cornerstone of the MAS election campaign last year. Morales signalled that contracts with private companies would be renegotiated in order to increase the share of the state rents as soon as he became president. Yet when he actually proclaimed nationalisation on May 1 this year, it came as surprise to most. He probably had to move fast of two reasons: (i) he had created expectations of a policy change which meant companies had put all investments on hold until the new terms were know; and (ii) other actors like the political leadership in Santa Cruz were preparing for countermoves as the date for the constitutional assembly elections is approaching.
The proclaimed “nationalisation” is clear at two points (i) The state, represented by the state owned company YPFB, will take over 51% of the share in all private companies active in production, transport and distributions. (ii) These mixed companies must pay 82 % tax on their net results, i.e. a further increase from the 50 % set in the last petroleum law (itself an increase from 18 % previously) in the interim period until the renegotiation of contracts. This reduces the share of profits left for foreign and private national companies to cover previous investments, considered as sunk costs. Further investments are hence not expected in the present conditions. However, this can be seen as a starting point in the negotiations where the government is probably willing to yield enough to make it profitable for the foreign companies to invest in this sector. In the short term this policy change is expected to increase the annual tax revenues from the natural gas sector from about USD 400 to 750 mill. a year since immediate volumes effects is not expected.³
Purchasing countries might look for other sources if the Bolivian government pressures too much. Brazil possesses large amounts of gas in the Amazon, which is only marginally more distant in transportation, and hence marginally more costly, when it comes to new green-field investments. They have also discovered a mayor deposit in the sea just outside Sao Paulo, but heavy investments in the deep sea has made Petrobras put the plans on hold for now. Chile is today buying Bolivian gas transported though Argentinean pipelines, who suddenly did not let the agreed quantities pass by due to their own increasing needs for imports. With the recent Bolivian hostilities in mind too, Chile has hence speeded up the planning of their liquefied natural gas (LNG) terminal where they intend to use gas from the Middle East on long term contracts. This would have a negative impact on the profitability of a direct pipeline from Bolivia to Chile in the future. On the other side, the state takeover of all gas sales has increased Bolivia’s negotiating power, especially if joining forces with Venezuela to become a de facto gas energy cartel in the region, able to negotiate directly with the consumer countries. President Morales also announced that YPFB will become an operating producer. Whether it will also keep its function as a regulator, and profit distributor in the same way as PDVSA of Venezuela, is still unknown. Policy changes in this regard will probably take place parallel to the process of contract renegotiation.
In the event that multinational companies withdraw from Bolivia, and YPFB could not operate without their expertise, the Bolivian government might be forced to give considerable concessions in the renegotiation rounds. It is vital that such processes occur in a transparent and open manner, in order to avoid the prolongation of the existing system, which tends to spur corruption and mismanagement. A reform process of the gas sector will have to deal with these problems seriously.
In Bolivia, mining has dominated the economy throughout the country’s history. Today, it accounts for 80 % of exports. Gold is the most important commodity, with annual exports of USD119 million. However, this country did not take the leap from more tradition mining to what is called “new-mining” during the structural adjustment of the 1990’ies, i.e. large scale, capital intensive new technology mines and quarries operations by the multinationals The surprisingly generous conditions for mining in the neighbouring countries were probably a deliberate choice in the competition among Latin American countries to attract the multinational corporations, a competition where Bolivia lost out.⁴ The annual export value dropped from about USD 800 mill annually in the early 1980’ties to stabilizing at around 400 mill. USD due to the low investment level, not surpassing 100 mill USD in any year according to Enriquez (2002).
Trends

Bolivia is undergoing a process of political change which enjoys legitimacy among large sectors of the population. The comprehensiveness of the reforms at hand (gas, water and forest resources, national constitution) will require strong support from popular constituencies in order to face the opposition, both in congress and in civil society. The government faces the challenges posed to those popular movements with broad experience from opposition, but little from actual policy-making and implementation. The government is “securing its trenches”, so to say, among the popular sector and internationally. The struggle will take place not only in actions, but also through the discourse and the many intentions being assigned to contending parties. The flow of information – and propaganda – will play an important role in the times to come. It will be necessary to monitor developments closely, particularly about the re-directions of public opinion and the positioning of influential trade unions and indigenous organisations.

Bolivia in the region. Bolivia is now positioning itself along with Venezuela. In April 29, Venezuela, Bolivia and Cuba signed the Tratado de Comercio de los Pueblos (TCP; People’s Trade Agreement), an alternative to the Free Trade Agreements (FTAs) negotiated between Colombia, Ecuador and Peru with USA. The signature of TCP followed shortly after Venezuela withdrew its membership from CAN (Comunidad Andina de Naciones; Andean Community of Nations). Evo Morales’ explicit support to Hugo Chávez’ leadership in Latin America contributes to a realignment of forces at the regional level.