March 15, 2005

The Cochabamba Social Club

MABB is a registered TM.

By now I am sure you heard about the "Social Summit in Cochabamba" organized by Sacha Llorenti, president and official representative of the Bolivian Human Rights Permanent Assembly (APDHB, in his Spanish acronym), the Bolivian Ombudsman, Waldo Albarracin and representatives from the Catholic Church. This summit is supposed to bring together representatives of the social sectors (local and national), political parties, business leaders, the presidents of the Senate and the Chamber of Deputies of Bolivia and representatives of the government. The aims are to bring solutions to the major problems affecting the country at this time. In particular, the summit is to focus on solving the Chapare road blockades, which, as time goes on, are turning specially troublesome. Another sticky point is the one on the royalties on natural gas.

This last point holds the magic key to solving it all, well almost all, the problems presently running down Bolivia's democratic process. There are basically two positions on the problem and neither party wants to give some space. On the one side we have Evo Morales (MAS) together with some worker's unions, who want to implement a 50% royalties on the extraction of Bolivia's natural gas resources. This solution is a product of the Deputy Chamber's Economic Committee, where Mr Evo has considerable influence. These people are set on demanding the government to raise the royalties for, what they argue, the benefit of Bolivia. As they see it today any other solution would only benefit the private companies. These people are in an all out war against private corporations and a system which they see as decadent and detrimental to their way of life.

On the other side, Mr Mesa and his government are set on levying a combination of royalties and taxes known as the 18/32 formula. This formula would charge 18% royalties and 32% taxes in income and profits. This, of course is the preferred version to the energy companies operating in the territory. Mr Mesa argues, this is a "sensible" law and that this law does levy 50% of "taxes" on the companies and, furthermore, it is consistent with the results of last year's referendum. Thus, he is not going back on his word, which he is being accused of by his opponents. Additionally, he argues, by inplementing this formula in to the Hydrocarbons Law, Bolivia would not be scaring international investors. If Mr Mesa has some room to negotiate, it is not visible at this moment.

Now, those are the official reports, but the reality is another. First of all, the summit has been doomed from the beginning. Shortly after being announced, the different participants started to go back on what they said and reconsidering their attendace. Problems started when Evo declared that, if he was going to the summit, he was not considering other solution than the 50% formula. Shortly thereafter, the government announced it was not going because it considered the summit a place where the government could not and should not negotiate. However, Mesa encouraged everybody to assist and formulate proposals. That is also when he said he was sticking to his 18/32 formula. These were two widely expected attitudes. For Evo, this just signals continuity on his demands. That may help somewhat his image, which has been considerably damaged by last week's events. But, for Mesa, this last pronunciation has been a bit damaging. One of the headlines in a widely circulated newspaper read "Mesa: he wants communication, but will not go to the summit" (paraphasing). In the eyes of Bolivians this will mean that Mesa is not doing what he said he will do. Bolivians are quick to judge any politician's behaviour as being "typical" politician (in Bolivia, politician = lier).

In recent reports, I have also read that many of the organizations set to assist the summit did not go. Additionally, one of the organizers, the Chatholic Church, has decided not to assist either. Some of the political parties have also not assisted because they did not receive an invitation. In summary, it has turned out to be another failed attempt to bring solutions. Bolivia's history is full of those.

The key question has been and still is, what will happen next? The way it looks, the road blockades are going to continue. Evo has said that if there is no 50% the road blocks are going to continue and, in fact, they will radicalize as time goes on. That means, small towns in the rural country will continue to be isolated from the world. Many products like banana and other fruits will rot without a chance to be brought to the markets. And, the cargo being held on the roads will also (has also) rot. Just as nothing can come out, nothing can come in. That means, these little towns are going to start running out of supplies. They'll run out of gasoline and food. Some towns have been already running out of things to eat. The people most hurt will be the small producers.

This situation has turned into a confrontation between two of the most powerful man in Bolivia, Mr Evo and Mr Mesa. Who will win? who knows. What's certain is that Bolivia is the looser, as usual.