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Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

August 30 2007 at 3:32 AM
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I learnt to use internet to find information 

Transredes to invest $1 billion in Bolivian natural gas
Mon Aug 27, 2007 6:29 PM BST

By Julieta Tovar

LA PAZ, Aug 24 (Reuters) - Bolivian natural gas transport company Transredes will invest more than $1 billion to develop pipelines and infrastructure in the South American country in the next three years, the firm's president said.

Bolivia has the region's second biggest gas reserves and President Evo Morales, who nationalized the industry last year, wants to increase sales of the fuel to energy-hungry neighbors and also improve domestic fuel supply networks.

"The company's going to invest about $1 billion by 2010. As a company we're going to keep on investing," said Ernesto Blanco, president of Transredes, which is controlled by Ashmore Energy International Ltd <ASHM.L>, which has offices in Houston.

In an interview on Thursday, he told Reuters between $500 million and $700 million of that would be spent as part of a project to quadruple Bolivian gas exports to Argentina.

Argentina is Bolivia's second biggest buyer of the fuel after Brazil and it has signed a deal to increase its imports to about 27 million cubic meters per day from the current daily maximum of 7.7 million cubic meters by building a pipeline.

Morales has trumpeted the Argentine deal as evidence of the success of the energy nationalization he declared in May 2006. He says the nationalization will allow his impoverished country to reap more profit from its abundant gas reserves.

Some industry analysts and company executives say the strategy could backfire because the cash-strapped Bolivian state needs hefty investment to develop the sector in order to meet strong export demand.

But Transredes chief Blanco said Morales "has every right" to implement policies aimed at obtaining higher revenues.


Ashmore Energy has a 50 percent stake and administrative control of Transredes, Bolivia's largest pipeline company. State-run energy firm YPFB has a 34 percent share and the rest is held by small investors.

Blanco said the firm also wanted to extend the pipeline that carries natural gas to Brazil to meet the needs of the large El Mutun iron-ore and steelmaking project, which is due to start production by 2010 and will need some 8 million cubic meters of gas per day.

Bolivia exports gas to Brazil through a pipeline that runs close to the site, and Transredes has a 50-percent interest in the firm that controls the Bolivian section of that pipeline.

Blanco said Transredes had also started investing $220 million to expand the domestic pipeline network. The government sees domestic demand for natural gas tripling from the current 6 million cubic meters a day within five years.

He revealed the company's investment plans days after energy firms operating in Bolivia submitted plans to the government pledging to supply the gas needed to meet growing domestic demand and existing and new export deals.

Companies including Petrobras, Repsol and Total have until Nov. 2 to submit concrete investment plans outlining how much they will invest in order to comply with the so-called supply agreements.

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Nationalising Bolivia's mining industry

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 3:35 AM 

Bolivia's president nationalizes tin deposit 2007-08-01 10:15:46 Print

LIMA, July 31 (Xinhua) -- Bolivia's President Evo Morales announced Tuesday the nationalization of the Posokoni tin deposit and called on its miners to become strategic allies in the process.

During a ceremony at Government Palace, Morales promulgated the law that nationalizes the tin deposit located in southwest Oruro province, according to news releases from La Paz, Bolivia's administrative capital.

"So far the government has fulfilled (its promises) and Posokoni hill is now nationalized," Morales said.

"We know a supreme decree was not enough, however, I believe some deputies presenting unconstitutional demands will continue trying to reject this nationalization," Morales said.

Morales told the miners "you have to be in the vanguard to defend this law" against legislators who seek to annul the nationalization.

"We want to have revolutionary miners but in the past days we have regretfully seen leaders controlled by the neoliberal parties that are lying to the miners," Morales said.

In October 2006, the Pokosoni tin deposit registered 16 deaths due to violent confrontations between Bolivia's Mining Corporation and cooperative members.

The promulgation had been planned for Monday night at Palacio Quemado (Government Palace), but the act was delayed until Tuesday because a miner had tried to enter with dynamite.

The miner was arrested, although he denied he was going to carry out any kind of attack.

Editor: Wang Hongjiang

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PNG loves foreign mining but not Bolivia

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 4:16 AM 

Morales: Bolivia to Nationalize Mining
By Traci Carl

MANAGUA, Nicaragua - Bolivian President Evo Morales on Wednesday renewed his pledge to nationalize his country's mining industry, saying he would complete the task this year.

In comments after his arrival for Daniel Ortega's inauguration as Nicaragua's president, Morales said the mining industry was the next privatization he wanted to reverse.

"Last year we nationalized hydrocarbons," he said. "This year it will be mining."

Elected a year ago as Bolivia's first Indian president, Morales nationalized his country's extensive natural gas reserves on May 1, assuming a greater share of their revenues and control over their Bolivian operations.

Bolivian mines are already owned by the state but the government has granted mining concessions to private Bolivian cooperatives and foreign mining companies.

Morales has used the term "nationalization" to refer to his goal of garnering greater share of mineral export revenues for the government. He has not given details on how any new government action would affect mining concessions, but last week Bolivian Mining Minister Guillermo Dalence proposed a sharp hike in taxes on mining revenues.

Under pressure from the World Bank and International Monetary Fund, former President Gonzalo Sanchez de Lozada privatized a wide swath of Bolivian industry in the mid-1990s, including the oil and gas, water, power, railroad and telecommunications sectors, as well as the national airline and pension plan.

The privatization has had mixed results and failed to create new jobs as Sanchez de Lozada had hoped and Morales has vowed to reverse many on the privatizations.

This month, Morales announced the completed nationalization of the water company Aguas de Illimani, which serves Bolivia's capital of La Paz, after two years of negotiations with the utility owned by French transnational Suez.

A worldwide collapse of tin prices in the mid-1980's prompted the state mining company Comibol to lay off tens of thousands of miners and shut operations at many of its mines. As the market recovered during the 1990s, the Bolivian government granted concessions at idle state mines.

Morales announced his plans to "nationalize" the mines last year but in November appeared to back off the move, saying his government could not afford it.

Bolivia shipped some $485 million of mostly zinc, silver, gold, and tin during the first half of 2006 - on pace to easily top 2005's total mineral exports of $536 million.

Mining is the country's second-largest source of export income for South America's poorest country, after natural gas.


Associated Press writer Dan Keane contributed to this report from La Paz, Bolivia.

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Real leadership guts unlike mauswara Somare

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 3:41 AM 

Brazil's Petrobras Threatened with Ousting from Bolivia
Written by Newsroom
Wednesday, 15 August 2007

Bolivia's leftist government warned energy companies including Brazil's Petrobras that they must commit to hefty investments before August 20 or risk being thrown out of the natural-gas rich country. The warning by Energy Minister Carlos Villegas came three days after President Evo Morales made a similar threat.

"We hope that by August 20 we'll have results, agreements, otherwise we're going to enforce the legal provisions (in the contracts)," Villegas told a news conference, referring to the new operating contracts signed by energy companies to comply with Morales' nationalization of the industry.

In an effort to reap more profits from impoverished Bolivia's energy resources, Morales nationalized the country's natural gas industry last year.

Officials have said the contracts signed in October 2006 commit the foreign companies to invest some US$ 3.5 billion to increase production.

Villegas said Spain's Repsol , US Vintage, Chaco - which is controlled by Anglo-US firm Panamerican Energy - and Argentina's Pluspetrol have presented investment plans worth a total US$ 1 billion.

However, the largest investors in Bolivian energy - Brazil's Petrobras, Repsol-YPF's local subsidiary Andina and France's Total - have yet to present their plans to the government.

Villegas said the requirement to invest in projects to meet local demand before investing in potentially more profitable projects to increase exports was one of the main reasons that companies were reluctant to submit their investment plans.

Meanwhile, he said the second US$ 56 million payment for a total of US$ 112 million to buy two refineries from Petrobras had been made. Petrobras acquired the refineries in 1994 for US$ 104 million and made millions of investments.

During a time in the negotiations Bolivia had offered to pay US$ 60 million while Petrobras was demanding at least US$ 200 million. At that time Brazil threatened to go to an international court to solve the dispute.


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Morales' popular support for radical change

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 3:43 AM 

Bolivian President Gets Majority Support

La Paz, Aug 11 (Prensa Latina) The government of President Evo Morales enjoys 51 to 24 percent majority support, says an inquiry by Variables y Tendencias firm.

The poll Communicational Trends and Political Evaluation II says 68 percent accept key changes like oil nationalization and the school $25 bonus to 1.2 million students in 2006.

Company Manager Oscar Calasich said they consulted 2,200 people in July at 18 cities, including La Paz, Cochabamba, Chuquisaca and Santa Cruz Departments.

Although fabricated by anti-government conspiracy, the poll exposes inflation as a set back.

hr emw ga

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Somare wants corporate landleases.Not Bolivia

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 3:52 AM 

The silent revolution In Bolivia
By Gaither Stewart
Online Journal Contributing Writer (Florida USA)

Aug 16, 2007, 01:04

Bolivian President Morales continues his “Agrarian Revolution,” nationalizing unused land and distributing it to small farmers. His government program points at the redistribution of 20 million hectares of land.

During his first 18 months in office, President Morales has personally signed 5,166 property ownership documents over to nearly landless peasants. Until now Morales’ leftwing government has redistributed land belonging to the state. In the next stage, President Morales recently announced, land reform will deal with property still in the hands of large landowners, the latifundistas, “who do not use the land profitably for society.” By the end of his presidential term in 2011, Morales hopes to redistribute a total of 20 million hectares of land, about 50 million acres, or one-fifth of the land surface of Bolivia.

Morales is Bolivia’s first Indian President, the only recently elected leftwing state leader in Latin America with a broad social base among the majority of the population. He justifies his revolutionary land reform with the slogan that “land must belong to those that work it.”

In many cases, land ownership in Bolivia is unclear. Often, if not in most cases, large landowners simply confiscated land in times past and arbitrarily included it in their latifundios -- large landed estates -- and today consider it their property, whether it is used or not.

The Morales government insists that such land belongs to the state. Under his presidency, for the first time, the state is redistributing land to the peasants.

Along with nationalization of the energy sector and a new constitution, the land question is a priority in Morales’ government program. Redistribution of land is in fact the heart of the government’s policies for social justice. He considers the agrarian reform begun in 1953 that was limited chiefly to Andes western highlands far from sufficient. A former farmers union president points out that in eastern Bolivia big landowners possess five hectares of land “for each cow.” While in the western part of the country a family of five persons must live from half a hectare of land, a little more than an acre.

It is the old story of Latin America. Of the world. Few people possess nearly everything. Yet this is the key question in much of Latin America. I have quoted elsewhere the French sociologist and close observer of Latin America, Alain Touraine, who wrote that “the key to the political life of the continent and its capacity to invent a political-social model capable of working in an exceptionally difficult situation is without doubt in Bolivia.”

Land distribution in Latin America’s poorest country is very unfair. The unfair distribution of land has led time and time again to social tensions. According to estimates of even the Catholic Church, a few families claim more than 90 percent of Bolivia’s farmable land and pastures, while 3 million small Indian farmers have to get by with the rest.

Big cattle raisers and soya producers are unwilling to surrender even unused land without a battle. “We will not permit them to take even one square meter of our land,” said a spokesman for the national Agricultural and Cattle Breeders Association. If necessary, the big landowners threaten to organize self-defense groups and resist any requisitioning of their land.

Much more than the conflict concerning nationalization of the energy sector, land reform underlines the deep divisions in Bolivian society. The lines are drawn between the haves and the have-nots. On one hand, Morales sees in land reform the possibility of improving living conditions of the Indian population from which he himself comes. He appears determined to carry out his revolution even against massive resistance of landowners and the entire Bolivian right.

The elite class of European background -- about 15 percent of a country with a predominantly indigenous population -- and the dominant class via which the USA has historically controlled Latin America, is just as determined as is Morales. This minority class is ready to defend old privileges by any means, as it always has. And it depends on Washington’s economic and moral support. Here then, again, is a classic case of Washington and its local vassals vs. any sign of genuine progress in the Americas.

The two fronts are meanwhile entrenched in their positions. At this juncture no compromise is in sight. Therefore, there appears to be little chance of political and economic stability in Bolivia. Apparently, I might add, Che Guevara knew what he was doing when he zeroed in on Bolivia.

Gaither Stewart, writer and journalist, is originally from Asheville, NC. After studies at the University of California at Berkeley and other American universities, he has lived his adult life abroad, first in Germany, then in Italy, alternated with long residences in The Netherlands, France, Mexico and Russia. After a career in journalism as the Italian correspondent for the Rotterdam daily newspaper, Algemeen Dagblad, and contributor to the press, radio and TV in various European countries, he writes fiction full-time. His books of fiction, "Icy Current Compulsive Course, To Be A Stranger" and "Once In Berlin" are published by Wind River Press. His new novel, "Asheville," is published by He lives with his wife, Milena, in Rome, Italy. E-mail:

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Unlike Somare, Morales shows real character

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 3:56 AM 

Morales: Nationalization or death

Camiri, Bolivia (EFE) – President Evo Morales said here Monday that he would give his life to accomplish the nationalization of Bolivia’s natural resources, a goal he hopes to realize in the coming months.

The head of state commented at a ceremony welcoming him to this town in the eastern province of Santa Cruz, where he traveled to inaugurate a national literacy program.

In offering Morales the symbolic key to the city, Mayor Gonzalo Moreno said he was prepared to die for the cause of reviving Bolivia’s state-owned oil company, YPFB, which has been reduced to little more than an empty shell by years of privatization.

“If YPFB is not re-established by July 12, this man (referring to himself) will sacrifice his life in a public act,” the mayor vowed, noting that Camiri has generated some $1.5 billion in oil and gas revenue for Bolivia since the mid-20th century.

“If you, mayor, are going to give your life for the re-founding of YPFB, I would give my life for the nationalization of the natural resources,” Morales responded, prompting applause from those attending the ceremony.
He pledged that before July 12, the 71st anniversary of the founding of Camiri, “all the natural resources of the country will be nationalized.”
Morales, who took office in January, wants to expand the overhaul of the energy sector enacted in May 2005 in pursuit of boosting Bolivia’s profit from its natural gas and restoring the state’s once-preponderant role in the industry.

Though the president calls this process “nationalization,” he has stressed that it will not involve a confiscation of the assets of the multinationals that flocked to this Andean nation a decade ago to take advantage of energy privatization.

The firms with the biggest stake in Bolivia’s estimated 48 trillion cubic feet of gas reserves are Brazilian state-owned giant Petrobras, Britain’s BG Group and BP, French major Total, U.S.-based ExxonMobil and Spain’s Repsol YPF.

Meanwhile, two Argentine executives working for Repsol in Bolivia were subpoenaed by prosecutors to appear this week in connection with accusations of fuel smuggling.

Ordered to testify on Wednesday are Fabio Carranza, who heads retailing operations for Repsol YPF Gas, and Daniel Bustos, the firm’s marketing director.

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Will PNG EVER have genuine leadership?

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 4:01 AM 

Morales Does the Unthinkable - He Carries Out His Campaign Pledge

It was an almost theatrical strategic move. On May 1, his 100th day in office, Bolivian president Evo Morales decreed the nationalization of the country’s natural gas industry. Morales, elected in December by mainly appealing to Bolivia’s poor and his fellow indigenous, repeatedly had pledged to assert national sovereignty over the gas resource, although this promise was dismissed by many as merely political shenanigans. At other times in his career, Morales had proven to be more pragmatic than ideological and more manipulative than righteous, and as such there had been much speculation about what shape the eventual nationalization would take. By assertively ordering army units to occupy gas facilities, however, Morales not only demonstrated a firm vision for the country’s future, but also underscored the symbolic importance of the act.

Making such a public display was crucial for Morales, whose term in office has been – as predicted – less than smooth, with work stoppages and sectoral protests already breaking out. But the May 1 decree was not a hollow charade for simple political gain, and the design of Morales’ nationalization reveals a great deal about his personal bona fides, as well as his likely political future, and perhaps will help place him in a position of particular prominence within the regional “pink tide” populist movement.

Forging a Leader

As Morales came into office, it was uncertain how fluidly he would navigate the path between Washington and other international financial powerbrokers, some of whom, like the white and mestizo dominated middle class, had sought to gently guide his policies towards a position of Lula-esque moderation. Meanwhile, Morales’ chief confederates sought to push him towards a more Chávez-type populist model. While Morales has resisted some of the demands of his more radical backers, the nationalization is a clear move towards the desires of his support base. Despite the elements of pageantry, the decree was a fundamental statement of political ideology, and a clear step in Morales’ ongoing move towards the left of Latin America’s political spectrum and greater alignment with Venezuelan president Hugo Chávez and Fidel Castro.

Fulfilling a Promise

Morales swept into office on what amounted to two explicit pledges: the legalization of coca leaf production and the nationalization of the country’s gas industry. While a third, less programmatic plank – his indigenous identity which represented a rejection of traditional politics and politicians – was crucial to his success, it was the gas issue that provided him the largest groundswell of nationwide support for a policy position he had adopted as his flagship issue. Nationalization seemed to offer the possibility of redistributing the wealth generated by Bolivia’s natural resources to an impoverished population, particularly when his deeply needy people were taking to the streets in order to pressure the government for wage increases. As South America’s poorest nation, the general population had an easy case to make.

In fact, Morales’ campaign promises had been deliberately vague, and it appeared as though the candidate’s potent rhetoric belied what was likely to be a moderate stance subject to negotiation. Some observers were concerned that Morales had raised expectations among his central constituencies with talk of nationalization and that anything short of outright expropriation would have most likely been seen as a betrayal – which would have had ominous repercussions for his presidency.

The nationalization decree was delivered on Monday from the San Alberto gas field near Tarija with all the ceremony of a national holiday, and indeed that was the intended effect. Street celebrations erupted as many Bolivians celebrated the rare instance when a president actually followed through on a campaign promise. Adding to the show, military units, accompanied by teams of government engineers, occupied a total of 56 gas facilities in the country.

The nationalization decree was sweeping, and held true to Morales’ long-running assertion that the gas belonged to the Bolivian people, not the companies that extracted it. The details made public included an announced hike in royalties on production from the two major gas fields from 50% to 82%, with other fields being increased to 60%. According to Vice President Alvaro Garcia Linera, this will up the government’s take from $460 million in 2005 to $780 million by 2007.

As part of the nationalization, the Bolivian government will also assume complete control over the country’s natural gas production, including commercialization and distribution of gas by means of the state company YPFB (Yacimientos Petroliferos Fiscales Bolivianos). As with the Venezuelan oil industry, YPFB will take a management role and majority (51%) stake in all gas-related operations including pipelines. This strategy seemed to be something that Morales has long been planning: in January, when Jorge Alvarado was appointed to head YPFB, hydrocarbons minister Andrés Soliz Rada commented that the move would help YPFB “raise itself from the ashes to found a company similar to [Brazil’s state oil company] Petrobras or [Venezuela’s state oil company] PDVSA,” according to a BNAmericas report. In this effort, Bolivia will undoubtedly receive the assistance of highly trained PDVSA engineers and production managers provided by Chávez.

Gas Companies and International Markets

The gas companies currently operating in Bolivia, among them Spain’s Repsol-YPF, British Gas (BG), British Petroleum (BP), France’s Total, and Petrobras, now face a six month semester to renegotiate their contracts under the terms of the decree, or, however unlikely, be summarily expelled. Repsol is clearly the company most affected by the nationalization, as it had previously claimed 18% of its total reserves and 9% of its production in Bolivia. While U.S.-based Exxon-Mobile is active in Bolivia, its holdings are relatively small. Even Petrobras, which is the most active player in the Bolivian gas industry (controlling around 45% of the country’s reserves), as a company claims only 2.8% of its reserves and 2.4% of its production in Bolivia. Petrobras does, however, have around $1.5 billion invested in Bolivia, as well as two major refineries. Most analysts feel that despite the initial shockwaves over the nationalization, the gas corporations will continue to operate in Bolivia, and at the very least Petrobras will continue to have a strong presence among them.

Tensions with Repsol, however, are likely to remain high. The company has been consistently wary of Morales, downgrading its projections for the country shortly after he took office, and putting a halt on further investment. The decision by Bolivian officials to prosecute two Repsol officials for allegedly smuggling gas out of the country only has further frayed nerves. Madrid’s response, which has been rather blustery and has included a vague but likely empty threat by Prime Minister Zapatero to reduce aid to Bolivia, is highly influenced by that relationship. Petrobras has also expressed a degree of displeasure with the nationalization, backing up its verbal parries by putting a hold on further investment in Bolivia, and canceling plans to expand an existing pipeline between Brazil and the Bolivian gas fields.

While Morales had made non-committal references to changes in the country’s gas management regime in recent weeks, clearly the industry was caught off guard by Monday’s decision. Repsol officials have complained that they expected to be consulted prior to any change in the industry’s management. If a critique is to be made about the nationalization process, it is that in its execution Morales did not display a deft touch for the international markets. This is somewhat unlike Chávez, who despite driving a hard line on terms of investment, has maintained a consistent position regarding the levels involved and thus he is viewed as being predictable. Yet simultaneously, the nationalization decree was not altogether unexpected and future assertions of Bolivian sovereignty should not provoke the sort of gusty international reaction now being witnessed.

A Rough Ride

Ultimately, what was particularly striking was not the nationalization itself, so much as the manner in which it was carried out. The elements of showmanship – “property of Bolivia” banners draped over industrial complexes and army troops taking over refineries – were carefully calculated. What Morales has done cannot be classified as an expropriation (as the companies’ assets, such as refineries, are not being seized), since it is control over the gas resource itself that concerns the government. Nevertheless, the military’s presence was symbolic, and lent a desired degree of drama which led the nationalization process to resemble an expropriation, at least in terms of public perception, even though it was definitely not that. Morales, a leader in the popular movements that toppled several past presidents, is acutely aware of how easily his own base could rise up against him should he falter in his mandate for profound change. This knowledge undoubtedly weighed on the new president’s nationalization strategy, and his decision to issue the decree suddenly and sharply on Monday suggests that he properly registered the building pressure.

Only five months into his presidency, Evo already has faced numerous problems. While he successfully negotiated with opposition parties to hold a constituent assembly (members of which are soon to be elected), several strikes and protests have marred his brief tenure. These have included sit-ins by airline workers and a poorly supported strike by healthcare workers, both of which Morales was able to handily brush off. The country’s main workers union, the COB – although no longer as powerful or cohesive as in the past – has continually pushed Morales for accelerated reform. Additional pressure came when demonstrators in Puerto Suarez seeking to overturn the government’s decision to block construction of a steel plant there, took three government ministers hostage, forcing Morales to send in an army detachment to free them. Such flare ups were indicative of the situation which has reigned since the inauguration, as the various demands of an increasingly restive base (which has made no secret of its willingness to turn on Morales) were emphatically registered.

Implications of Nationalization

The crucial, and if anything, burgeoning, entente cordial between La Paz and Caracas was underscored by Morales’ recent decision to join Cuba in signing on to Chávez’s ALBA (Alternativa Bolivariana) agreement, which is presented as an alternative to the U.S.-backed FTAA (Free Trade Area of the Americas). With the nationalization, and the parallel growth of YPFB, Morales has also taken clear steps towards joining the regional movement in favor of energy integration. Chávez has stated that Bolivia must be included in the proposed Gasoducto del Sur, which will link much of eastern South America via a massive gas pipeline stretching from Venezuela to Argentina. The project already has the support of Brazilian president Luis Inacio Lula da Silva and Argentine president Nestor Kirchner. Bolivia’s nationalization will dramatically increase its interest in the project, for it now has its own gas to hurry to market. Yet at the same time, it could turn down Brazil’s desire to cooperate, since doing so would appear to be awarding La Paz for bushwhacking Brasilia’s investments in Bolivian gas. Moreover, Morales will now be able to more directly take the initiative in promoting additional energy projects, including the possible Uruguay-Paraguay-Bolivia pipeline which would be largely Venezuela-funded.

Yet there are potentially lurking problems that could plague the aftermath of the nationalization announcement. YPFB will need to prove that it is capable of serving as an effective administrator, and although it vastly lacks the technical expertise and financial wherewithal of PDVSA (which has succeeded in its model of being able to maintain an effective partnership with foreign companies) Chávez will be readily able to provide Morales with all of the technical and administrative support necessary in order to ensure the venture does not fail.

More pointedly, there are profound questions over how regional leaders, other than Chávez – principally Lula – will react to the decree. Given Petrobras’ large stake in Bolivia, and Brazil’s near total reliance on Bolivian gas, the prickly defensive stance taken by Lula’s government in the immediate wake of the nationalization of Petrobras’ holdings was understandable. A summit between Morales, Lula and Kirchner – whose country is also a major importer of Bolivia’s gas – is scheduled for today. While Morales has suggested that Petrobras will likely to be able to negotiate on favored terms, he has also declared the end to preferential gas deals with Argentina and Brazil, asserting that both countries will now need to pay the market rate.

The reunion comes at a crucial moment for Lula, who now must choose between affirming his pink tide credentials by supporting the nationalization, or retreat to a hangdog position of economic orthodoxy, where to the distress of many of his ruling PT party militants, he now can be found. It seems likely that Lula, up for reelection in October, and needing to reassure his own leftist base of his authenticity, will land softly on Morales, and that the current scrap will likely pass. Even the discomfort among Petrobras’ technical leadership, which produced the decision to halt investment in Bolivia, could be overturned by Lula’s intervention. This likely executive level stand-down notwithstanding, if the nationalization results in a marked increase in energy costs for Brazil, Lula may perhaps find himself in a difficult situation come election time. Surely, it is in the best interests of both men to contain the flap and not make it appear that there was a moderate and radical choice that could have been made.

For Washington, the gas nationalization, and Morales’ promise to return more industries to state control in the future, potentially ends the relatively well-mannered honeymoon period witnessed in recent weeks. While reasonably diplomatic stances had been taken by both sides on the issue of legalizing some coca-leaf production, it has always been a tense relationship, punctuated by outbursts and minor provocations. Economic repercussions for the U.S. from the nationalization decree are minimal, because U.S. energy corporations have only small investments at play in the country, and Bolivian gas currently does not reach the U.S. market. Nevertheless, it is not breaking any secrets to indicate that the nationalization – and the dramatic way in which it was launched – are likely to alarm the State Department, which undoubtedly has looked with suspect eyes at the growing ties between Caracas, La Paz, and Havana.

Marking the Way

The nationalization is undeniably a milestone for the newly fledged Morales presidency. It represents not only the dramatic fulfillment of a campaign pledge to his core constituents, but also promises to potentially change the face of Bolivia by providing funding for much needed social investment. Furthermore, it marks Morales’ ascension from the ranks of the chorus to being one of the principles, and now helps make him a fully credentialed member in the regional “pink tide” left-leaning movement.

This analysis was prepared by COHA Research Fellow Michael Lettieri

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Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 6:03 PM 

This is one excellent bunch of articles, answers lots of questions about nationalising industries too. Thanks for the help.

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Would Somare cut HIS salary?

Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 4:21 AM 

In December, for the first time in its history, Bolivia elected an indigenous candidate to the presidency. Winning 54 per cent of the vote, the biggest margin since the restoration of democracy two decades ago, Evo Morales celebrated a historic victory, declaring that “after 500 years, we the indigenous people are retaking power”.

Since the disastrous application of neo-liberal policies across the region in the nineties, recent years have seen a dramatic and notable shift to the Left, with Venezuela, Brazil, Argentina, Uruguay and now Bolivia electing leaders who promise to reverse the economic policies many voters blame for their continuing poverty. This new generation of leaders have reaffirmed the sovereignty of their nations, often at the expense of the United States, traditionally dominant in regional affairs. They have effectively stalled US plans to create a single Free Trade Area of the Americas (FTAA), planning instead their own Community of South American Nations (CSN), modelled on the European Union and independent of their powerful northern neighbour.

By halving his own salary, Evo Morales hopes to lead by example, putting the money saved into education for the poor. Bolivia’s 65 percent Indian majority continue to live in widespread poverty, having endured five hundred years of oppression, with parallels being drawn between Nelson Mandela (who will attend the official inauguration ceremony) and “Evo”, their hopes resting heavily on the new President’s shoulders. Yet Morales understands the challenges faced by ordinary Bolivians: he is an Aymara native, raised in poverty, who rents a single room in a shared house and wears striped jumpers and Che Guevara t-shirts to official occasions instead of the more traditional suit. As part of a non-ideological new Left sweeping the region, he espouses no strict or formal ideology but promises to champion indigenous participation in the political process and redistribute Bolivia’s natural riches. After years of instability, Morales could well be the man to unify the troubled Andean nation and bring some social justice to South America’s poorest country.

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Ralph Hamilton

Luck needed too.

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August 30 2007, 7:55 AM 

I wish Presidento Morales luck.

He will probably need it. Bolivia has had something like 162 Coups de etat since independence from Spain. (more than one a year)

I think the old saying: He who would be king of Greece, must by needs keep his bags packed. (Bolivia in this case) Applies to the president of Bolivia. What a troubled nation this has been, since Jose Boliva fought for its independence.

Nationalization is a great thing for an emerging nation. The problem is not getting ideology mixed up with good business. It is nice to be ideologically pure, but it is better for the people to be prosperous and well fed. This is the hazard to be avoided in nationalization.

From Voltaire's Candide: "This is the best of all possible worlds." 'That may be true, but tomorrow we have to muck-out the stables.'

Whilst I like the mental discipline of Philosophy, I consider it a mind-virus cured by farming. So too with Ideology. A hungry belly does not care about political purity.


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Re: Luck needed too.

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August 31 2007, 12:09 AM 

You missed the point completely Ralph! When will an indigenous citizen ever become the PM or even DPM of Australia. As long as people with the ideology of you, Ralph are around, I am prepared to bet my last penny that this is most unlikely.

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??? I'm questioning ????

Not enough qualified PNGeans to run nationalised oil, gas, mining, and timber industries?

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August 31 2007, 3:21 AM 

I just can't believe after all these years of foreign companies operating all these things that they've managed to keep enough PNGeans from becoming qualified in their jobs enough to run the business by now.

Only the logging industry have PNGeans been kept out of high level decision making responsibilities.

In the minining and petroleum/gas sector, there have been high level Papua New Guineans.

So WHY aren't we nationalising? As it is, PNGeans get paid at a lower rate than equivalent skilled expats and that is still true.

Chevron might have been the only exception but everything I've heard is that things are much worse under Oil Search.

Does Inter Oil have PNGeans at any high levels?

What about Hides Gas?

Doesn't Ok Tedi have PNGeans at high management levels?

And Lihir?

Why aren't we nationalising?

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Nilpis A Dimdim


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August 31 2007, 9:35 AM 

You asked about Lihir brother? Lihir gold mine has been in operation for more than 10 years and jobs identified in those early years to be localized/nationalized are still being held by exppatriates from Australia/other countries. What do you say about that? Massive expats numbers have come in as trainers to train locals and PNGians to eventually take over suprvisor, superintendent and manager positions have instead moved into those positions themselves. What a shame our government agencies tasked to oversee and protect PNGians jobs are in slumber - they have been given sleeping pills by expatriates and have turn a blind eye to these issues, and who suffers, ordinary PNGians. The dept of labour and employment must wake up and do their jobs, screen all expatriate positions and visits these employments institutions.

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Re: Delocalization/Denationalization

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August 31 2007, 4:45 PM 

The labour dept has always turned a blind eye to localisation. Companies file endless revised localisation plans saying they need even more time to localise and all those plans are accepted. In PNG we think that the companies know best. In many more progressive countries, government is suspicious of company's intents because they know all company cares about is making money. So government takes the people's viewpoint and speaks on their behalf. In PNG government speaks on behalf of foreign companies and stomps on the people of PNG. Ice those politicians and then bury the png gov.

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Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 2:51 PM 

You're right. Our PM would never take a pay cut like this Bolivian president.

In fact, our PM and MPS always vote for pay raises not pay cuts!!!!!!!!!!!!!!!

Why does this country (Bolivia) elect truly caring leaders while we elect the same crap over and over, then give them 5 years to rip off our country?

I'm for nationalization too. Full support.

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Re: Bolivia's Morales-A leader of the kind Michael Somare will NEVER be

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August 30 2007, 4:54 PM 

Raplh...please do not mention somare's name? I am about to spew!!!

He is a crook.


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do you think ?

its not the paypacket

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August 30 2007, 5:04 PM 

Do you really think that it would make any difference to Somare's wealth if he even did the Job for nothing?

Lets face it Somare did not accumulate his wealth by saving each F/N from his parlimentary paypacket.

Lets face it there are only two (maybe three types of politicans) and its not just PNG.

1/ people with a vision and a desire to improve the wellbeing of the population - generally people but not allways people how have been successful in there careers and are comfortably off - noy mega rich.

2/ people who see it as the way get rich quick

3/ people who are not much good at anything....but are nice.

generally the thrid will join the 2's as time goes on.

so who has PNG got the most off?

a politians salary with perks is about K200 000 so why spend millions as some have to get elected?

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Re: its not the paypacket

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August 30 2007, 6:00 PM 

In developed countries, people spend huge amounts of money to get elected. Are you saying that there too, they are out to get rich quick for the most part?

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its not the paypacket

Re: its not the paypacket

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August 30 2007, 7:43 PM 

Yes, in developed countries there are people that spend alot of money to get elected. Rarely is there own money....if it - is question their motives.

I did say PNG is not alone in the types of people who seek election, the question is the percentage of people who do and their motives.

Does PNG have a higher % that do it for the monetary gain (apart from salary)?

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