Gas law passed, but country divided

Well, Bolivia has finally got a new hydrocarbons law which raises taxes on foreign gas companies and changes the terms of some of the contracts. The law was passed yesterday by Congress after President Mesa refused to either approve or sign it in an attempt to wash his hands of the conflict.

But there is certainly no sign of an end to the conflict. Two gas companies have already said they are looking into suing for breach of contract and all energy companies are saying that it will freeze or cut back on foreign investment.

Meanwhile the country has yet again become beseiged by bloqueos (road blocks), marches on La Paz and announcements of major strikes by groups who are calling the new law an act of treachery.

Now that the law has been signed, however, divisions are emerging amongst the opposition between those who are calling for full nationalisation, the resignation of President Mesa and the closure of Parliament and those in the main opposition party (MAS) who are calling for amendments to the current law including a simple 50% tax on all oil and gas companies.

In the next few days, I will try and do a fuller analysis of the current law and some of the alternative proposals. Whatever happens, Bolivia is going to need international solidarity in the coming months given the threats made by key international players before the law was passed including:



  1. little more than a placeholder May 19, 2005 at 8:04 am - Reply

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  2. Miguel (MABB) May 19, 2005 at 12:16 pm - Reply

    Bolivia doesn’t only need solidarity to confront outside threats, it also needs support to confront the threats emanating from the inside.

  3. Nick May 20, 2005 at 10:35 am - Reply

    Hi Miguel, Would you mind elaborating a bit? What threats and how international action could make a difference? Thanks, Nick

  4. Miguel (MABB) May 23, 2005 at 4:24 am - Reply

    Well, for starters, how about road blockades, marches, protests, national strikes, among some of the milder ones. Among some of the more obvious threats, we can cite, taking over Congress, justicia communitaria, dinamite explosions on the streets, siege of cities, not letting food get to these cities, taking over the international airport, shutting down gas stations, and not to mention the threat of secession, confrontation between protestors (Santa Cruz and El Alto), military intervention, etc.
    I know that some people see these “threats” as just the righteous expression of countless frustrations from the opressed. However, when these expressions are not conducted in a peaceful manner and moreover, have the aim of shutting the country down to impose a certain idea, they become threats.
    I am not sure what you mean by “international action”. I only agreed with your statement
    “Bolivia is going to need international solidarity in the coming months given the threats made by key international players before the law was passed…..”
    I think international solidarity is necessary to help Bolivia deal with outside and inside threats.
    I hope that was clearer.

  5. Nick May 23, 2005 at 10:58 am - Reply

    Hi Miguel, Thanks for taking the time to reply.
    From what I have read about the law, I think the groups are right to protest at the very least for changes to the law. Whilst I don’t agree with all the tactics, I do wonder what other options protestors have particularly when they largely represent groups of workers, campesinos and indigenous peoples that have been excluded from the political system in previous years.
    The fact is that it is only through such tactics that protestors brought down previous governments like Goni’s and agreement to a Constituent Assembly that has the hope of tackling some of these systemic problems.
    From all sides of the political debate, there is widespread agreement that Congress suffers from significant corruption and is not representative, so it is not surprising that politics is then carried out in the streets, for good and bad effect.
    But what concerns me even more than the lack of accountability at national level is the lack of accountability at international level. The situation that Bolivia is in now is largely shaped by the choices enforced by the international community, either by multinationals or by institutions like the IMF. They enforced a form of privatisation that created the conditions for the violence in October 2003 and the conflict we see today.
    The sad thing is that when people lash out in Bolivia against those consequences, those who suffer are inevitably other Bolivians. The least we can do as people outside Bolivia is hold the Institutions and Companies that we control to account(either through our Governments or at times as shareholders or consumers).
    For me the internal threats are shaped by the external threats. Bolivians are rightly fighting to tackle the internal threats through debate and politics – at times successfully and at times very messily.
    As a British person, I believe my responsibility is to challenge the external context so that Bolivians have more chance to resolve problems and design a better future by themselves.

  6. Miguel (MABB) May 24, 2005 at 12:12 pm - Reply

    Hi Nick,
    take a good look at the law. It actually provides for the companies to pay above 50% taxes.
    I know we agree that those tactics are not conducive to solutions. Plus, those tactics are certainly not options, even for “workers, campesinos and indigenous peoples that have been excluded from the political system…”
    Governments like Goni’s, brought more direct democracy to Bolivia….
    Well, not to engage in a long discussion about social justice, god knows I agree with much of it, I think in this case (the means of protest), the end does not justify the means. Those kinds of protests are counterproductive and only make Bolivia (the country) in the end worst off.
    And please, don’t say that Bolivians don’t know better and let themselves be influenced by the international community. We are not that naive. The IMF might have pressed for them, but those decisions were made by Bolivians and that is one thing we have to recognize.
    But, let me not digress from my point. I think, those tactics are counterproductive and will only create more problems for Bolivia. We don’t need to lay siege to a city or to take over airports or the congress to make changes. Those actions are illegal. Democracy provides for other ways to make changes. Let’s use them.
    Thanks for sharing your point of view with me and everybody.

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