Bolivia nationalises gas fields
If Bolivians expected that the election of Evo Morales, the indigenous president who comfortably won last December’s election, would begin to set right centuries of exploitation by foreign companies, then they will swiftly be disabused of such a notion. This week’s announcement by Morales that the country’s lucrative gas industry is to be nationalised has prompted the predictable jitters amongst multinational organisations.
The British oil company BG Group followed Spain’s Repsol and Brazil’s Petrobras in warning of the consequences that Morales’ decision could provoke. The president on Monday sent troops to the country’s gas fields, offering the companies 180 days in which to agree new contracts which he says will make them “partners”, rather than owners, of the natural resources. While his rhetoric may be of ownership and Bolivian sovereignty over the land, the undertone is less hostile: Morale doesn’t want to drive away investors as much as strong-arm them into new contracts that will be more favourable to Bolivia. Under current terms, fifty percent is the usual figure that goes to the country; Morales intends to ramp this up to somewhere nearer the 80% mark.
Morales ambition is worthy; after all, he was elected on a platform of nationalisation for the country’s energy supplies. Unfortunately, while this will prove popular amongst his own electorate, there is little chance that in the real world, where international energy companies wield far more clout than a single government in an unstable region, the situation will pan out the way the President hopes. Petrobras have already announced that they will be suspending their operations in the country, and a planned pipeline between the two nations has been scrapped.
Regional leaders are scheduled to meet this week, and already it looks as though a split between, on the one side, Morales and Hugo Chavez of Venezuela, and on the other, Lula da Silva of Brazil and Argentine President Nestor Kirchner, is all but inevitable. While Bolivia may well be forced to back down and re-negotiate its terms, the current crisis vividly demonstrates that the Latin American leftwing “revolution” – which many see as a challenge to the United States – is anything but unified.
The British oil company BG Group followed Spain’s Repsol and Brazil’s Petrobras in warning of the consequences that Morales’ decision could provoke. The president on Monday sent troops to the country’s gas fields, offering the companies 180 days in which to agree new contracts which he says will make them “partners”, rather than owners, of the natural resources. While his rhetoric may be of ownership and Bolivian sovereignty over the land, the undertone is less hostile: Morale doesn’t want to drive away investors as much as strong-arm them into new contracts that will be more favourable to Bolivia. Under current terms, fifty percent is the usual figure that goes to the country; Morales intends to ramp this up to somewhere nearer the 80% mark.
Morales ambition is worthy; after all, he was elected on a platform of nationalisation for the country’s energy supplies. Unfortunately, while this will prove popular amongst his own electorate, there is little chance that in the real world, where international energy companies wield far more clout than a single government in an unstable region, the situation will pan out the way the President hopes. Petrobras have already announced that they will be suspending their operations in the country, and a planned pipeline between the two nations has been scrapped.
Regional leaders are scheduled to meet this week, and already it looks as though a split between, on the one side, Morales and Hugo Chavez of Venezuela, and on the other, Lula da Silva of Brazil and Argentine President Nestor Kirchner, is all but inevitable. While Bolivia may well be forced to back down and re-negotiate its terms, the current crisis vividly demonstrates that the Latin American leftwing “revolution” – which many see as a challenge to the United States – is anything but unified.
posted by DN at 12:29 PM
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