Bolivia’s Gas Warfare Becomes Explosive

Published: Wed 15 Oct 2003 12:37 AM
Council On Hemispheric Affairs
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Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere
Memorandum to the Press 03.64
Tuesday, October 14, 2003
Bolivia’s Gas Warfare Becomes Explosive
1. While the sale of liquefied natural gas to Pacific LNG is the immediate trigger for the massive protests, abiding poverty, a huge unemployment rate, the government’s failure to dialogue with the opposition and the bottom-scraping unpopularity of the Sánchez de Lozada administration provide the real ammunition.
2. Bolivia’s huge reserves of natural gas, second only to Venezuela in Latin America, are destined to be a long-term factor for the country’s politics and economics, providing the country with the chance to lift itself up.
3. The southeast region of the country, including the cities of Santa Cruz, Tarija, and Sucre, is the home base for the large gas companies, whose workers could soon join in the fiery dispute.
4. Bolivia’s long-standing animosity toward Chile stems from the 1879 War of the Pacific, in which Chile annexed Bolivia’s only coastal territory, ensuring that Bolivia would remain landlocked. For that reason, the population will fight the idea of the proposed pipeline terminating in a Chilean port.
5. Vice-president all but resigns while major factions of the coalition government threaten to quit.
6. The White House, in another one of its major inconsistencies and raging double standards, warns the Bolivian opposition not to oust Sánchez de Lozada.
As casualty-numbers mount for protesters, and those demonstrating against the Sánchez de Lozada government increase their momentum, Bolivia’s president was forced to step back from authorizing the construction of a foreign-owned pipeline to ship the country’s liquefied gas to the Chilean coastline for export. As early as September 20, when the general strike against the government first began, hundreds of Bolivian campesinos flooded the streets surrounding Warisata, a small town bordering the tourism-rich area of Lake Titicaca. Labor groups, trade unionists and local farmers joined together to halt all road traffic in protest of President Sánchez de Lozada’s intention to privatize the country’s natural gas industry and export the gas to the Chilean coast. Sánchez de Lozada, or “Goni” as he is widely known, initially proposed almost 18 months ago to allow the natural gas reserves to be pumped and exported by a consortium of U.S., British, and Spanish multinationals. Following calls from local activist leaders arrayed against the President’s grand design, tens of thousands of Bolivian workers joined in a general strike, and marched through the streets of La Paz and other towns to protest the President’s failure to address the nation’s pressing social concerns which the natural-gas earnings could remedy.
Bloodshed at Warisata
Even before this past weekend’s intensified confrontations, indigenous protesters had blocked the main highway leading from Warisata to the capital city of La Paz, thereby trapping nearly 800 tourists in the small towns of Warisata and Sorata. Protesters had been organized first by supporters of the country’s main opposition leader, Evo Morales, who leads the powerful coca grower’s union. These initial protesters were soon joined by miners, trade unionists, and other civic activists. Government soldiers were dispatched to clear the roads, but clashes between protesters and soldados resulted in seven deaths, including an eight year-old girl. Government officials have claimed that the soldiers were reacting to initial threats made by a few armed peasants. However, human rights investigators from Bolivia’s National Permanent Assembly of Human Rights, as well as from the Congressional Human Rights Commission stated that, “there was no evidence of an ambush and….though talks had been continuing with the campesinos to end the blockade, the military had aggressively moved in.”
Carlos Mesa, the country’s vice president, and several parties making up the ruling coalition, as well as the military, seemed to be weakening in their resolve to support the embattled president, as clashes this past weekend in El Alto left another 57 protesters dead. Although many of them were ostensibly protesting the construction of a $5 billion pipeline that would pass through Chile, the country’s mainly indigenous population was also protesting against poverty, lack of jobs and subservience to the U.S.-imposed economic model that benefits foreign economic interests far more than those of native Bolivians. Peaceful protests over the pipeline turned ugly as the government replaced the politically untrustworthy police, many of whom were sympathetic with the strikes, with the military.
Growing Unrest Throughout the Country
The violence at Warisata and now in El Alto, an industrial suburb of La Paz, is but one symptom of the growing unrest that is rapidly gaining momentum throughout Bolivia. There were similar demands last February, when striking police officers exchanged fire with soldiers, leaving almost forty dead in La Paz. Starting in early 2000, when demonstrators in Cochabamba took to the streets against the U.S. multinational Bechtel’s acquisition of the city’s municipal water system, Bolivianos are growing restless with the ineptitude of this Administration. Sánchez de Lozada’s scant social programs and harsh economic policies have led hundreds of thousands of Bolivians to take to the streets. The recent mass protests against the gas pipeline have reawakened angry memories of the privatizations of a number of Bolivia’s public assets in 1985, which failed to bring the benefits promised to the public and only enriched wealthy local and foreign business interests.
Washington’s Role
In response to growing local pressure for President Sánchez de Lozada to resign, OAS Secretary General César Gaviria denounced any move to force the Bolivian President to step down. State Department spokesman Richard Boucher announced today that the United States “will not tolerate any interruption of constitutional order and will not support any regime that results from undemocratic means.” This behavior was in marked contrast to Washington’s attitude in Venezuela in April 2002, when the State Department was conspicuously slow to respond to the opposition’s failed coup against President Hugo Chavez.
Further insight can be provided by Boucher’s statement regarding the situation in Azerbaijan, which was cited in the Washington Post “Express” last Monday. Boucher termed any effort made to pressure Azerbaijani President Geidar Aliev to withdraw from the presidential campaign in order to support his son’s candidacy “an internal matter for Azerbaijan.” He continued, “We don’t pick people’s candidates, we just ask that they hold free and fair elections.”
These remarks contrast sharply to recent State Department actions in Bolivia and elsewhere in Latin America. During the run-up to Bolivia’s 2002 presidential election, then-U.S. ambassador Manuel Rocha publicly expressed Washington’s opposition to the candidacy of Evo Morales, the leader of the cocaleros, stating that "I want to remind the Bolivian electorate that if it elects those who want Bolivia to return to being a cocaine exporter, that result would endanger the future of U.S. aid to Bolivia.” Likewise, in Nicaragua’s presidential election in November 2001, State Department officials and Florida Governor Jeb Bush openly opposed the candidacy of Daniel Ortega, the longtime leader of the Sandinistas, alleging that he maintained ties to terrorists. State Department personnel also persuaded several of Bolivia’s competing right-wing factions to withdraw from the race, in order to facilitate the defeat of Ortega by unifying the conservative vote. And in June of this year, former U.S. Ambassador to El Salvador Rose Likins said that a victory by the Farabundo Marti National Liberation Front (FMLN), a former leftist guerrilla group currently leading the polls, would jeopardize the country’s relationship with the United States.
Bolivia Sits atop a Goldmine
Bolivia contains the second-largest supply of natural gas reserves in Latin America. President Sánchez de Lozada has planned to allow Pacific LNG – a consortium comprised of Spanish-owned Repsol-YPF and British Gas and Panamerican Gas, a subsidiary of British Petroleum – to open the reserves and transport the liquefied gas through a pipeline to port in Chile, where it would be shipped abroad, mainly to Mexico and California. While Pacific LNG stands to generate $1.3 billion in annual revenue, the deal would return as little as $40 million annually to the Bolivian treasury in the form of taxes and fees – hardly a good deal for La Paz.
Most Bolivians want the burgeoning gas industry to remain nationalized in order to create much-needed jobs and income by helping to augment domestic industrial investment. Backed by the International Monetary Fund, Sánchez de Lozada has claimed that millions of dollars will be generated for the state if it follows his proposed privatizations. While he has promised that the revenue will be used to bolster education and health care, most Bolivians believe that the revenue generated from the “vaporized gold” sitting underneath the mountainous southeastern region will mainly feed foreign corporations at the expense of the impoverished majority.
The recent protests stem not only from the privatization proposal itself, but also from the fact that the pipeline would run through neighboring Chile, which stands to profit handsomely from its point-of-exit location. Most Bolivians have a long-standing hatred of Chile dating back to the 1879 war of the Pacific, in which Chile successfully sealed off Bolivia from the Pacific Coast, condemning the country to landlocked status. Bolivians are bitter that Chile has greatly improved its economy and living standards, while Bolivia remains South America’s poorest country today. Many Bolivians blame Chile for the country’s extraordinarily high poverty rate, and to refer to someone as “Chilean” is an insulting gesture.
Taking to the Streets
Massive protests in the last four weeks have generated a harsh response from the government. Hundreds of thousands of farmers, peasants, union members, teachers, students, and other disgruntled citizens have joined in the protests. Several weeks ago, over 1,000 students at La Paz’s national university gathered in the campus courtyard to protest Sánchez de Lozada’s privatization decision, throwing rocks at cars and burning tires. Police deemed the activities to be excessively rowdy, and fired teargas into the crowd to break it up.
Jaime Solares, leader of Bolivia’s main worker’s federation, told members to “take up sticks or other mechanisms” in calling for continued strikes. Evo Morales, the leader of the powerful leftist party Movement Towards Socialism (MAS) and the nation’s principle opposition leader, threatened, “If the government decides to export gas through Chile….its hours are numbered.” Felipe Quispe, head of the Confederation of Bolivian Peasant Workers (CSUTCB), virtually declared an indigenous uprising. In calling for increased and prolonged anti-government demonstrations, these leaders have tacitly threatened to plunge the country into civil strife if the average Bolivian’s deep social concerns are not addressed.
El Presidente Stands Alone
Responding to criticism of his privatization proposal, Sánchez de Lozada claimed that the main problem behind the country’s present uproar stemmed from an inadequate explanation to the Bolivian people of what they stood to gain from the natural gas deal. At the same time, the millionaire president has attempted to paint the protesters as isolated radicals, claiming that, “These problems and difficulties are born of what I consider a very radicalized group in Bolivian society who believe they can govern from the streets and not from Congress or the institutions.”
Despite his insistence on the benefits of privatization, President Sánchez de Lozada suffers from grim poll numbers. The most recent poll shows his approval ratings at around nine percent. The next presidential elections are not scheduled for another four years, so he may yet have time to increase his standing among his constituents. However, the current situation seems bleak. Bolivians, much like Californians in last week’s recall election, are clamoring for drastic change and a clean sweep of their leadership. Morales, the government’s most outspoken critic, draws widespread support from his fellow campesinos, who feel that a potentially destabilizing regime change might still be better than the presently unbearable situation. Morales has gained support by threatening to expel foreign companies in order to maintain Bolivia’s sovereignty. Although his fiery rhetoric has attracted many sympathizers, such language might ultimately prove costly for Bolivians, who already suffer from a 87% poverty rate and are desperately in need of foreign investment in order to provide a jump-start to the country’s exhausted economy.
The Coca Industry
Sánchez de Lozada’s long-standing ties to Washington have angered many campesinos, especially when it comes to the issue of coca-plant eradication. Washington aids Bolivia with hundreds of millions of dollars to fight cocaine production and its exportation to the United States. Campesinos and indigenous Bolivians clearly take a different stance on the issue of fumigation and eradication. Coca leaves are sacred to the Bolivia’s indigenous people, and are used as traditional means to deal with health issues. For the indigenous people, coca is a deeply-rooted cultural symbol, much in the way that American Indians utilized tobacco. Bolivians chew it to give them energy, drink it to calm their stomachs, "read" it to tell their future, and put it on their temple for headaches. U.S. anti-drug policy strictly dictates that it is impossible to distinguish between coca production for cocaine and coca leaves for medicinal purposes, and therefore supports every effort to eradicate it. The US would much prefer that the Bolivians planted pineapples and bananas instead, which have almost never proven to be a viable alternative. Local critics argue that the U.S. war on drugs continues to infringe severely on the traditions of native Bolivians, and only serves to further galvanize support for Morales.
Difficult Decisions to be Made
President Sánchez de Lozada has some difficult decisions in front of him. Further support for the privatization of the gas industry will only harden the attacks against him coming from the trade unions, campesinos, labor leaders, and students. On the other hand, nationalization of the gas industry could drive out most foreign investment, while angering the k’aras, or “white-faces” – those in the middle and upper classes who control Bolivian politics. Faced with dwindling voter support and increasing demonstrations against his government, Sánchez de Lozada would be wise to stop serving the interests of the most wealthy—his own class—and seriously focus on the dire social and economic issues confronting his fellow Bolivians almost every moment of their lives.
This analysis was prepared by James Koehler, COHA Research Associate.
Issued 14 October 2003
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