May 19, 2004

Gas: to nationalize or not, that is the question

MABB is a registered TM.

Boliv-gas poll To nationalize the production of natural gas or not, that is the question at the root of the problem Bolivia is facing at the same time it wants to hold a referendum.

The mesa administration wants to hold a referendum on July 18th to give Bolivians the chance to have their say on its new energy policy. The government is hoping to gain legitimacy to implement such policy, which touches on issues like natural gas sovereignty, the reactivation of the old state oil refinery and industrialization.

On the other hand, there are various "social sectors" under the radical leadership of Jaime Solares (COB), Felipe Quispe (Movimiento Pachakuti) y Roberto de la Cruz (COR-El Alto) and others, demanding the abrogation of the current energy law. These movements want to nationalize the energy sector. They argue that the referendum will not solve anything and does not address their concern. Thus, they are a potentially strong opposition to the legitimacy of the referendum.

One look at the Bolivian media suggests that there is overwhelming support for this idea (nationalization of natural gas production). According to a poll carried out by Red Erbol in La Paz and El Alto (the most populated area in Bolivia, 2,35 million people as of 2001 census), 83 percent of the people want the natural gas to be in the hands of Bolivians, in spite of the potential economic setbacks this decision might represent. Furthermore, 70 percent supports the reactivation of the old state oil refinery, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). Finally, 69 percent of the people in the polled areas support the export of gas through a Peruvian port.

According to a report of the paceno newspaper La Razon, 11 social sectors -among them, COB, COR, CSUTCB, various workers unions, teacher unions and other organizations- have voiced their demand and thus their implicit support for the nationalization of the natural gas resources. At the same time these same social sectors have issued, what it amounts to one more threat, to president Mesa. They demand the nationalization of the gas reserves or they will force Mesa out of his job. The same way they forced out Sanchez de Lozada.

So the problem stands like this: The government is set on holding the referendum. The so called social sectors are opposed to the referendum and instead they are talking of boycotting it. At the same time, they are holding negotiations with the government to resolve their differences and are planning their pressure tactics by calling all Bolivians to engage in road blocks, hunger strikes and marches and demonstrations.

A fine mess this is! The result will be as usual: disruption of life in the major cities, confrontations between demonstrators and police and disruption of economic activity. Plunging Bolivia downward into this caotic spiral, so dangerous to stability.

However, there is one good thing to highlight. The good thing about this whole issue is that, for the first time in its history, Bolivia will hold a referendum. This is a very important exercise to reverse the weakening trend Bolivian democracy has been placed in the last decade. Hopefully, as a result of this referendum, Bolivia's, as well as the government's, energy policy will carry more legitimacy and will stand the test of times.