Foreign Correspondence

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Bolivian government orders troops to take 'control' of oilfields

This comes at a time when right-leaning President Carlos Mesa was forced from office and a controversial referendum on regional autonomy for the energy rich eastern part of Bolivia is scheduled for Aug. 12.

-Am



Bolivian government orders troops to take 'control' of oilfields

LA PAZ (AFP) Jun 28, 2005
Bolivia's government has ordered the armed forces to take 'physical control' of oilfields in a politically charged move amid continuing demands for full nationalization of the industry in South America's poorest country.

But the move does not mean an end to the operations of foreign multinationals, such as Britain's BP, Spain's Repsol, France's Total and Brazil's Petrobras, which have been here since 1997.

"It is symbolic more than anything else," said analyst and university professor Marcelo Varnoux.

Interim president Eduardo Rodriguez issued decrees late Monday instructing the ministries of Oil and Gas, Interior, and Defense "to coordinate work and operations so as to guarantee State authority at oil and gas deposits".

The move comes as implementation of a law approved in May and which the multinationals have slammed as confiscatory. Monday's decree underscored that the industry should operate "in the interest of all Bolivians".

The new oil law doubled to 32 percent non-deductible taxes on the oil companies, and kept at 18 percent their royalty payments to the state. It also boosts the role of the state oil company YPFB in the production process.

The move comes after New York oil prices closed above 60 dollars a barrel for the first time on Monday, and although prices cooled Tuesday, market jitters remain.

Rodriguez on June 9 succeeded Carlos Mesa who was driven out of office after weeks of social and political unrest largely over control of Bolivia's natural resources, particularly natural gas.

Bolivia has South America's largest gas reserves after Venezuela.

The leftist opposition Movement to Socialism charged that Rodriguez "hasn't the least intention of recovering state ownership" of oil and gas industries.

After Mesa quit, the presidents of the Senate and of the Chamber of Deputies refused the presidency, leaving the president of the Supreme Court, fourth in the constitutional line of succession, as caretaker president, with the power to call a snap election.

Rodriguez has promised general elections before the year's end.

Mesa was the second president in 20 months to be forced to resign by the poor masses seeking a greater share of Bolivia's energy wealth.

Rodriguez, 49, was sworn in hurriedly in Sucre, without the presidential sash and regalia, before a session of legislators as protesters clashed with police outside.

For three weeks, tens of thousands of farmers, workers and indigenous people in the Andean country of nine million clamored in La Paz and other cities for the nationalization of the gas and oil industry as part of a more equitable distribution of wealth.

Bolivia's crisis pits poorer Andean regions in and around La Paz against more prosperous eastern and southern plains, where most natural gas is located. cc/mdl/jjc

http://www.spacewar.com/2005/050628212117.5w0zlcbs.html


Why east and west don't meet in Bolivia


from the June 28, 2005 edition -

An Aug. 12 referendum on autonomy highlights a divide between European descendants and the indigenous.

By Bill Faries / Correspondent of The Christian Science Monitor




SANTA CRUZ, BOLIVIA - If Lorgio Balcazar Arroyo has his way, Bolivia will soon have a system of government like the United States.

Mr. Balcazar, from the industrial eastern part of Bolivia, is general manager of the Pro-Santa Cruz Committee, a key organizer behind a controversial referendum on regional autonomy that is scheduled for Aug. 12. Broad dissatisfaction with the central government has led to an independence movement in this industrial boomtown. Leaders here say autonomy would help buttress the area against such volatility in the west as the month-long protests in May that paralyzed the capital and led to the resignation of Bolivia's second president in less than two years.

"Bolivia needs a federal system of government," Dr. Balcazar says, noting that the central government still makes decisions over the staffing of public hospitals and road construction. "We are a huge, diverse country, but our central government is too fragile."

With Bolivia's Congress meeting Tuesday in La Páz to consider its own resignation, and the country's newest president promising elections by December, the view from the east reveals the profound economic, cultural, and political divide facing Bolivia's next government.

Santa Cruz was barely on the map half a century ago. But thanks to the strength of its fertile soils and petroleum reserves, as well as subsidies from the central government in La Páz, it has grown to a city of more than 1.2 million, from 40,000 in 1950.

Today, it is a bustling metropolis of immigrants and industry, home to Croatians, Germans, and Japanese, as well as the offices for agriculture and petroleum giants like Archer Daniels Midland, British Gas, and Brazil's Petrobras. The city and surrounding region produce 42 percent of the nation's agricultural output and 34 percent of industrial GNP, according to a 2004 report by the United Nations.

Culturally, geographically, and politically, Santa Cruz is a world apart from the high plains of western Bolivia, home to the capital, La Páz, and El Alto, indigenous strongholds where last month's protests began. Newsstands here sell magazines from Brazil in front of billboards advertising John Deere tractors. In the city's cafes, young professionals talk of weekends spent in Buenos Aires and Rio de Janeiro. From sidewalk vendors to CEOs, people here are frustrated by the mounting economic toll that years of protests have had on the country, South America's poorest. But Santa Cruz's growing assertiveness is seen as a threat to many in the west.

The Aug. 12 referendum has not been sanctioned by the national government, and many western leaders view it as a means to counteract the growing power of the country's indigenous majority.

Yet its backers claim that one of the key benefits of autonomy would be to bring Bolivia's government closer to its people and allow the country's nine departments, or states, to have greater control over how their taxes are spent.

The Pro-Santa Cruz Committee has existed since 1950, but it wasn't until June of last year, when 150,000 people turned up at its rally in support of autonomy, that its agenda made national headlines. A cabildo, or town-hall meeting, followed in January, drawing more than 300,000 people into the streets here.

But as the demands from Santa Cruz gain legitimacy, the rivalry between east and west here is increasingly delineated in racial terms. It's the eastern cambas (European-descended Bolivians) versus the western collas (a term often used to refer to western indigenous people).

At one extreme are groups like the Camba Nation, which calls for independence from the indigenous cultures, described on Camba Nation's website as "slow and miserable" and prone to "conflict and communalism."

Camba Nation's counterparts in the west were on display during the recent protests in La Páz, when speakers in the city's main plaza accused then-President Carlos Mesa of "not being a true Bolivian" because of his supposed European ancestry. But so far the extremists have been unable to broaden their influence.

From his office on the outskirts of Santa Cruz, Carlos Kempff, CEO of Santa Monica Cotton and a former minister of economic development, speaks regretfully of the path Bolivia seems headed down. "We are all guilty for what has happened here," he says. "We worked hard for 20 years to improve the country's macro-economic condition, but ... we have not been able to solve the problems of poverty and inequality, and many Bolivians feel they have been betrayed."

Yet Mr. Kempff says that the conflict over autonomy has been overblown. "Everyone wants to be able to make their own decisions, to use their own money in their own regions," he says. "We in Santa Cruz are seen as the 'devils of separatism,' but many of the protesters aren't analyzing what we've proposed."

His opinion is seconded by Balcazar, who points to the recent political crisis as highlighting the need for autonomy. "What happened in El Alto and La Páz is terrible," Balcazar says. "The needs of the people there haven't been met by the government for years. We don't want to see Santa Cruz deteriorate the same way."

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