By Published On: May 13, 2006Categories: Gas & Oil0 Comments on Nationalisation

"Nationalisation is just a political banner" Carlos Lopez, spokesperson for the multinational petrol companies, told me just before the elections. "We are awash in a sea of rhetoric which is just one inch deep in practical reality" he said before warning darkly of the leftists in MAS who would destroy the country.

On May 1st, nationalisation become hundreds of banners as the words "Nationalised: property of the Bolivian people" got draped on petrol stations, depots, and oil and gas fields across the country. To everyone’s surprise, Evo Morales announced in the central square of La Paz, to jubilation from the crowds, that the army was occupying gas fields across the country.

"The time has come," he proclaimed wearing a miner’s helmet for "a historic day in which Bolivia retakes absolute control of our natural resources". He announced new taxes on large gas fields and said that the multionationals would now have to supply all gas to the State company, YPFB who would control its use, pricing, internal distribution and exports. He said the companies had 180 days to agree to new contracts or would be forced to leave.

He added that "There is still much to do. Tomorrow it will be the mining industry, the lumber industry, all of our natural resources."

On the streets, there was a buzz that Morales had reasserted Bolivian dignity and thrown aside the cautious approach that had already led to mutterings that the new Government didn’t have the balls to reverse "neo-liberalism" and enact real change.

By contrast the response from the international community was of shock and outrage. The EU through spokesman Johannes Laitenberger expressed "profound concern." He added that "We’d hoped there would be a process of discussion and consultation before it adopted such measures" as if it was Bolivia’s responsibility to consult with outsiders on the use of its own resources.

The Spanish government, home to the second largest energy investor Repsol, said the move could affect bilateral relations revealing rather starkly the primacy of economic interests amongst supposedly "left" governments.  Even the usually sympathetic Lula Government described the acts as "an unfriendly move that could be understood as a break with understandings made with the Bolivian government." Brazilian state company Petrobras, Bolivia’s biggest energy investor announced it was freezing all investment.

Meanwhile, various media outlets across the world condemned the move as "dangerous populism" with almost everyone quoting a city analyst saying it would damage foreign investment in Bolivia. The Telegraph led with the headline "Bolivia threat to foreigners as troops move into gas fields" whilst the Financial Times said it was a sign of an increasingly "authoritarian President."

Delivering on a campaign promise

The surprise for me is the shock of the West. For all Morales was responding to was the popular mandate he received when he got the largest vote in history. He was acting on exactly what he had committed to do in his party’s manifesto. Isn’t that what responsible democratic parties are supposed to? Universally all polls here show more than 80% of Bolivians in favour of nationalisation, and every party including the right-wing parties were forced to put "nationalisation" in their manifestos however disingenuously.

He was also responding to a highly organised base of independent social movements in Bolivia who have made it quite clear that if Evo does not meet their demands for effective change that he will face the same prospects as President Goni and President Mesa who were both expelled by huge-scale mass mobilisations in 2002 and 2005 respectively.

The fact is that Bolivians are convinced quite rightly that privatisation of Bolivia’s gas just led to huge profits for multinational energy companies and continued a cycle of looting Bolivia’s resources that started with Spanish colonialism.

Almost every conversation I have ever had with a Bolivian on the gas issue reiterates the comment that "Privatisation of gas has just led to multinationals getting all the profits from our resources, which is what is happened with all natural resources, tin, silver, water." It seems hardly a coincidence that British Gas, one of the foreign companies in Bolivia, played down the Government’s announcement at the same time as announcing record first quarter profits for 2006 of £563m.

The extent of deep-rooted belief in recovering Bolivia’s natural resources was shown in the vast protests in both October 2003 and June 2005 which paralysed the country for weeks. In October 2003, more than 60 people died in struggles so it was not surprising when Nestor Salinas, leader of an association representing those killed welcomed the step saying: ""El Alto spilt a lot of blood… in demanding the nationalisation of our hydrocarbons. Now, a big step forward has been taken."

Edgar Patana, the executive secretary of the Regional Workers’ Central of El Alto told ZNet that "For us, it’s homage to the fallen of October. It’s an historic act that, hopefully, in the following months, will bring the country more revenue, to relieve unemployment, and make more jobs available…"

Is it really nationalisation?

If anything the debate in Bolivia is about whether the move goes far enough. Jaime Solares, executive secretary of the workers federation Central Obrero Boliviano (COB) could have been predicted to condemn the announcement as partial saying only "confiscation without compensation" was the answer. Howevr his comments found in echoes in other people I talked to including in FEJUVE, the El Alto residents association and other social movements. Felipa Huanca, from the Bartolina Sisa Campesina Women’s Federation told me that "This is a first step but it is not the nationalisation that we have been fighting for."

The fact is that the decree does not confiscate any private companies assets and leaves them in a weakened but still powerful position. NGO research body CEDLA said the decree still allowed multinational companies to control process of exports through their continued effective control of fields and equipment.

Moreover the 180 days which are to assess each company on an individual basis allow for each contract to be watered down. This no doubt explains why most petrol companies whilst complaining and warning of arbitration have said they will stay and negotiate.  British Petroleum (BP) said that it “is analyzing the impact of the measure, but wants to find formulas to continue working with the Bolivian government.”

Planning Minister Carlos Villegas comments on Spanish radio that their plans showed that "companies would recover their investment and operational costs and achieve a margin of about 20%" hardly suggests the energy multinationals will suffer greatly from the usual.

Domestic against international pressure

So as usual the devil is in the details.

The interesting development though was Evo’s growing willingness to defy international pressure in order to respond to a popular demand. It may be more bluster than real but the style of the announcement was hardly your usual diplomatic politics. He almost seemed to revel in the condemnation, aggravating tensions with Brazil by saying that Petrobras was operating illegally and bluntly stating the truth that Spain should respect Bolivia’s sovereignty and fulfill its commitments to Bolivia on poverty reduction.

He has been similarly bold on trade, signing a radical trade treaty with Cuba and Venezuela that turns typical free trade treaties on their head by starting with the simple principle that the purpose of trade is not trade for its own sake but poverty reduction (something I will write about later). The treaty is hardly like to build the position of those in the US Government who are advocating in favour of working with rather than antagonising the Morales government.

In part it would seem he is responding to the strong solidarity of President Chavez of Venezuela who has put his money where his mouth is and has no doubt influenced the theatrical elements of Morales announcement. However Morales is also acutely aware that his power is dependent on domestic support and at the very least defusing opposition from Bolivia’s powerful social movements.

So whilst the Western media and governments are painting the announcement as an extreme, last-ditch announcement, they are likely to be in for a rude shock. Because the pressure of social movements means that this is more likely to be a first step, rather than a last step. It will take more than a few banners for Bolivians who have lost many lives in the fight for nationalisation of gas to really believe that their resources are back in their hands and are being used to tackle centuries of poverty and exclusion.

See also: Upsidedownworld, Opendemocracy and Znet for some good coverage and analysis of the nationalisation announcement. The Guardian has been pretty accurate too.


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