Wednesday, May 31, 2006

Could this be the beginning of the end?

The CAO (Camara de Agropecuarios del Oriente) has announced that they will resist Evo's plans of land reform. To do so, they will create defense committees and did not rule out conflict against the 'intruders'. Any casualties will be the sole responsibility of the government, they said. Anapo (Asociacion Nacional de Productores de Oleaginosas) also supports the measure and says that their rights have to be defended by any means necessary. Read it here.

Evo, on the other hand, has started using an strategy to divide the East against itself. He has announced that he will redistribute 20 million ha. in next five years and the first beneficiaries of the reform will be the Eastern tribes of guarayos, chiquitanos, movimas, mosetenes, mojeños e itonomas. It is clear that this strategy is designed to strip the landowners from Santa Cruz, Beni and Pando from any power they may have left. Read it here.

Could this be the beginning of a secessionist civil war?

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Tuesday, May 30, 2006

Evo and the Bolivarian Dream

Yesterday I wrote about Chavez's plans for a Bolivarian Confederation. It seems that the plan is serious.

El Universal reports that the Confederation would integrate the member countries politically, economically, socially and 'even militarily'. He also said that the member countries would be Bolivia, Peru, Ecuador and Venezuela 'and I [Chavez] don't know about Colombia'.
The idea of this confederation would have appeared after the CAN's death, which, by the way, was killed by the empire. Chavez also said that it was a good idea to wait for the results of the Peruvian and Colombian elections (he proposed the confederation on Sunday, as the Colombian elections were still under way).
Finally, Chavez said that Evo should be the one to start the process by allowing the possibility of a confederation in the new Bolivian constitution. He then said that he would revise the Venezuelan constitution next year.

Santa Cruz's El Deber naively reports that a confederation would be unconstitutional (and thus illegal) under the current constitution. It also says that this confederation is nothing but Chavez's attempt to gain influence, as opposing the US has isolated Venezuela. Moreover, the eventual victory of Alan Garcia in Peru and Uribe in Colombia would leave two important pieces of the Bolivarian puzzle missing.
(On this point, I must say, I am skeptical. While it is true that Colombia has seen great progress with Uribe, and is likely to keep on choosing similar leaders in the future, Peru is a different matter. It is likely that Garcia wins this election, but what about next? If Garcia does not address the issues that are important for Humala followers, then he [Humala] may be strengthened for the next election and repeat Bolivia's story: In 2002, when Goni won the elections and was elected president over a second-place Evo, everybody breathed calmly and thought that this was it, that Evo would quickly burn out. Fast forward to 2005, where the dissatisfaction about Goni et al's policies translated in 54% of support to Evo. It is possible that this happens in Peru? Yes, it is. It depends on an eventual Garcia term, though. If history serves as a guide, Garcia's will be a disastrous term. If it is true that he has learned from his mistakes, as he and all Humala opposers say, then the cycle may be broken).
El Deber also reports that the opposition has finally appeared. Tuto Quiroga says that Hugo Chavez has finally shown his true plans for Bolivia and interprets Chavez's message as a warning to the world about his interest in excedentary Coca and drug trafficking. Not that many are listening, though.
Finally, a historian points out that Chavez's version of the 'Bolivarian Dream' is a travesty, done to his own image and likeness and has nothing to do with Bolivar's actual plans. Now that's news!

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Monday, May 29, 2006

Bolizuela Confederation in sight

The last episode of Chavez' talkshow Alo Presidente was recorded in Bolivia (Tiawanaku) and included a glimpse into the dictator's first draft for the next Bolivian Constitution. According to Los Tiempos, Chavez said that at least 81% of the vote should support MAS, so that they can approve an
anti-neoliberal [constitution] that establishes a true republic, gives back the rights to the indigenous peoples, the children, renews the right to health, education, the right to dispose of our natural resources and, in sum, guarantees the right to life. It should also prohibit the privatization of hidracarbons (...).
First of all, our current constitution guarantees all of those rights. Then, it is interesting to notice he does not say anything about other rights... free speech, for example. And finally.... from an economic standpoint, an explicitly anti-neliberal constitution will be the deathknell for the Bolivian economy. Investment will dry up in a second and poverty will increase exponentially.

Chavez also accused -once again- the US of conspiracy against Evo and lent two helicopters for Morales use.

Bolivarian - Indoamerican Confederation
He also proposed the creation of a 'Patria Grande' under the name of Bolivarian - Indoamerican Confederation, which would unite Bolivia, Venezuela 'and others'. Obviously, no one else would want to get into it and it would be Bolivia and Venezuela. Each time I read the newspaper I see a new blow against democracy. Then again, perhaps I should stop worrying about Bolivian democracy and realize it has been dead ever since Carlos Mesa was ousted and the constitutional successor was not allowed to assume his mandate.

Amazing. Chavez is following Hitler's steps one by one, from the failed coup to the annexation of a territory... What now?

It is funny, in a way: Evo said (wrongly) that Melgarejo (a Bolivian president in the 1800s) gave all the Acre to Brazil region in exchange for two horses (in reality it was a war. Not that he cares much). Now he has given the entire country for two helicopters.

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Elections in Colombia

Colombia held presidential elections yesterday. Many saw the elections as a referendum on Alvaro Uribe's first term and he was expected to win by a landslide. Well, it seems that Colombians elected with their head and voted for the best possible candidate: Uribe was reelected with 62.22% of the votes (here). After Uribe's impressive first term, this can only improve Colombia's prospects.

Mora y Leon at Publius Pundit has an excellent roundup of all the blog and other news sources on the event.

Boz has a list of five important points to consider on the wake of Uribe's reelection.

Enjoy. Uribe's reelection is a glimpse of hope for the region.

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Saturday, May 27, 2006

"Evo is here to stay"

Chavez and Cuban vice president Lage went to Evo's launch of campaign for the Constituent Assembly (read about it here). Chavez told the public, straight away, that
Evo is here to stay. The Constituent Assembly is just the beginning.
Well, something tells me he means every word. Even if Garcia Linera has openly disagreed with Evo's plans to support reelection and increase the mandate, thus casting doubts on MAS' official stand on the issue, chances are that his voice will not be heard when it matters.

Evo has not make any pronouncements either in favor or against reelection. He just said that it was the social groups and the people who wanted reelection, not him (I wonder how long will it take until he says that his presidency is God's will, destiny or something to that effect). Thus, as he is nothing but a public servant, and it is not his place to be in favor or against reelection, he will just have to obey the people. So, even if Garcia Linera could convince MAS to reject reelection, what can Evo do if the constituents, as voted for the people and representing the people want him there for the next two, three or five decades?

Do not be fooled by Garcia Linera. Even though his concern may be genuine -we will never know-, I'd rather listen to the real Bolivian ruler, Hugo Chavez.

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Thursday, May 25, 2006

The Future of Bolivia under Evo

Reelection - The Small Print

Yesterday, I posted on Evo's reelection plan for the Constituent Assembly (CA). Well, after reading Cochabamba's Los Tiempos, it seems we had only half the story. Under the current constitution, a presidential mandate lasts 5 years and everybody assumed that MAS' reelection meant that the maximum mandate for a president (read Evo) would be ten years. Wrong!

MAS Senator Antonio Peredo said it was paramount that Morales stayed in power until all structural changes were enforced. He believes that 10 years is the minimum time and it would serve just to put things in place. On the other hand, 20 years would be enough to consolidate all structural changes. So, MAS will not only propose reelection, but to increase the length of the presidential mandate to 10 years.

The thing is, you see, that democracy is a foreign invention, imposed by colonial powers and oligarchs who used to cut the hands of any indigenous person who learnt to write... It must be stopped at any cost.

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Wednesday, May 24, 2006


Today's headline in La Razon reads "MAS will suggest that the President can be reelected". They are talking of the Constitutional Assembly (CA), of course. The rationale behind it is continuity: MAS say that if the president can be reelected, there will be continuity to the government's policies.

This should be a wake-up call for those that say that the CA is not an attempt to gain unconstrained power. This reelection issue is what the CA is all about. The rest is just decoration, to give the public something to discuss about while democracy is being buried. Once the CA starts, chances are that while everybody discusses something else, this particular bit will be approved.

Once reelection is approved, Evo will be eager to keep pulling a Chavez: He will call for new elections and argue that the new elections are his first constitutional mandate and not the reelection, because what happened under the previous constitution does not count. It would not be surprising if Bolivia receives Venezuelan aid in the guise of Smartmatic machines 'to modernize the electoral process'.

Evo also said that he did not want a system based on majority voting, because that is an imported and imposed model (!). He said he wanted a political model based on consensus, just like Aymaran communities. This comes out as a warning: you better agree with him.

Future generations of Bolivians, when MAS is (hopefully) long gone, will judge us and unanimously agree our stupidity. After all, we have had all possible warnings. We have seen what happened in Venezuela and we can be sure Evo is nothing but a puppet. We could also have resorted to our own history, when decades of dictatorships and left-wing governments destroyed the country's economic apparatus. But no, we did not hear anything, we remembered nothing. Lame excuses will probably mushroom all over the place -"we didn't know", "we didn't think it would be like this", etc. But do not get confused. Evo never hid his intentions. We knew. We just chose to look the other way until it was too late.

So, does reelection come as a front-page news? Obviously not. This is what MAS wanted all along. In fact, I would be surprised if MAS had any plans for the CA besides this one.

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Monday, May 22, 2006

Peru Election: Debate Links

The presidential debate between Alan Garcia and Ollanta Humala took place yesterday. According to what I have read, Garcia was a "winner by default", although Humala could stand up to him, leading some people to declare a tie.
I have compiled a list of internet resources for those of us who could not see the debate firsthand. I hope you find these resources helpful.

Peru Election 2006: Humala stands up to Garcia but scores no decisive victory. A nice round up with a summary of all topics discussed.

Peru Election 2006: A roundup of the international reactions to the debate.

El Comercio: Debate en TV, Elecciones 2006. This is El Comercio's debate page. It is divided by topic and clicking on them will lead to a page with short videos from the debate. Very interesting for those not living in Peru.

El Comercio: The debate, minute-to minute. Similar to a football match "Match-cast".

La Republica: An article on the debate, subtitled "much ado about nothing". According to the article, the same ideas as always were recycled once again. There was nothing new to look forward to.

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Wednesday, May 17, 2006

On the Brink of Land Reform

Vicepresident Garcia Linera announced that 2 to 4 million ha. would be distributed to peasants, once again by decree. Evo Morales is expected to sign 6 decrees outlining land reform later today (here). Santa Cruz and Beni are not going to let this happen without a fight, it seems (here).

So, Evo's decrees are expected to follow these purposes:

Reform to law 1715, so that the state would be able to 'reverse' lands that do not fulfill an economic or social role.

Redistribution in favour of indigenous people and communities.

To speed up reorganization of land, including social movements and producers.

Concession value, so that the state can set the value of lands.

Social control, so that land in certain areas be accessed.

Overrule two norms approved on 2005. With this decree, the government strip prefects of the power they held in the reorganization of land and does not accept the creation of forest zones.

So, what does this mean?
First, Evo will try to reverse law 1715, from the National Institute of Land Reform, also known as the INRA law, in order to 'reverse' lands that do not fulfill an economic or social function. In other words, Evo is about to strip landowners of their property. All the discourse about lands satisfying this or that function is nothing but an excuse for taking away the assets of the Oriental landowners. Surely, the fact that this group is the most vocal opponent to Evo's policies must be purely coincidental.

In a similar move, MAS wants to strip prefects of all the power they have. With this measure, Evo is giving very strong signals about centralizing power. Most prefects are from the opposition and have given Evo trouble whenever it was possible. With this decree, Evo starts taking all their power for himself. The fact that the government is no longer supporting the autonomy vote in the forthcoming referendum, while some groups inside of MAS are opting for the 'NO' vote, is nothing but further evidence that Evo wants to concentrate all the power in his hands.

Also, the fact that the government will be the one deciding the value of land is worrying. Today, the government fixes prices for land and transport (here and here), tomorrow, all prices are fixed by the government and we are back in 1982. Since it is the government's belief that free markets are for imperialists or slaves, it would not be wise to expect price-fixing ending here.

And finally, redistribution. From La Razon, it seems that there will be two kinds of winners from Evo's land reform: First, indigenous people. On the one hand, poverty is tied with race in Latin America, so that indigenous people are indeed poor and would welcome such a move. However, poverty in Bolivia is not as discriminating as Evo would let you believe. It is sad to see that poor people not satisfying the 'race' requirement will be left out of the deal. Also, the fact that indigenous people constitute the grassroots support for Evo is merely coincidental.
And second, social movements. It seems that at least some part of this new reform will be an open bribe to social groups. If social movements are included in the reorganization of land, expect a new class of landowners to arise: The union leader.
Destroying what's left of property rights in Bolivia only to give rise to a new class of landowner is as stupid as it sounds.

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Thursday, May 11, 2006

Documentary: Venezuela, una amenaza real

I just received a link for a documentary on Chavez, hosted on the Cuban-American National Foundation's (CANF) website. It seems the documentary was added to CAF on April 28, 2006, so it deals with current happenings.

The documentary must be download before it can be seen and is in Spanish. It shows what is really going on in Venezuela. Meanwhile, the world does not give a damn about it and TV stations like the History Channel, UK TV documentary and Discovery are floded with documentaries about absolutist regimes like 1997's "Nazis: A warning from history". It seems the warning fell into deaf ears.

The link I got was attached to the following mail, where you will find an alternative link in Net for Cuba:
Estan muy bien hechos estos videos... Vale la pena verlos y ver lo que no se
muestra de Venezuela y Chavez.


Nota de Net for Cuba International

Por este medio, deseamos invitar a todos nuestros Miembros y amigos a
ver y difundir el valioso documental: "Venezuela, una amenaza real".
Dicho material, recoge con hechos irrefutables, el inminente peligro
que el régimen de Hugo Chávez representa para la estabilidad y la
seguridad de todo el continente americano. Ello se ha logrado a través
de una cuidadosa selección de discursos pronunciados por el propio
Chávez, el análisis pormenorizado sobre las relaciones del gobierno
de Venezuela con el ala izquierdista que hoy azota a varios países en
América Latina, y su vinculación con el terrorismo internacional.

Aquellos que a estas alturas aún dudaban sobre las verdaderas
intenciones de Chávez de implantar el socialismo como régimen
totalitario en Venezuela y su política expansionista a través del
hemisferio, tendrán la posibilidad de ver aclaradas sus dudas una vez
que vean el presente documental.

Gracias a la colaboración del Webmaster del Sitio de la Fundación
Nacional Cubano Americana, dicho video logró ser capturado y hoy se
hospeda para mayor seguridad del mismo, en nuestros sitios: y respectivamente. Usted lo podrá ver
a través de los siguientes enlaces:

"Venezuela, una amenaza real", está dividido en 5 partes,
correspondiente a 5 videos individuales y engrosará de manera
permanente la recién constituída sección: "Videos Online" en nuestro
Sitio de Internet. Además de que se puede ver también en su
totalidad, gracias a la colaboración del sitio amigo:
Hat tip to Valeria Candia, who sent me the links. Thanks!

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Wednesday, May 10, 2006

Petrobras vs. Southern Venezuela

Today's news (1, 2) show three things: First, that Evo will not be able to cruise past the nationalization. Regardless of last week's energy summit, Petrobras is at odds with nationalization. Petrobras president, Gabrielli, said the Bolivian constitution allows nationalization only after indemnification. So, they want to make sure that this nationalization occurs legally and not according to Chavez and Evo's wishes. Petrobras also condemned the appointment of a new board for their Bolivian operations, and said that the government overlooked a series of legal requirements and procedures. In other words, the government is acting illegally (I wonder if that is yet another reason why they are so keen on changing the constitution).

On Saturday, Petrobras gave the Bolivian government 45 days to negotiate the new contracts before going to international arbitration. 41 days remain.

Second, that beyond a crude earnings analysis, the current administration did not consider the effects of nationalization on other investment. Now, investment from Brazilian businesses will be conditional on the Petrobras case. This is bound to affect Bolivia, which has its biggest trading partner in Brazil.

And finally, Bolivia is extra-officially Southern Venezuela. A Petrobras team, including Petrobras president Gabrielli, went to Caracas to speak with the Venezuelan government and PDVSA about Bolivia's nationalization. Only after this meeting is over will they go to Bolivia. Wonder why....

In a related note, the Brazilian government has finally expressed their discontent with Chavez's actions. The government said that one cause for discomfort was that PDVSA guided Bolivia's nationalization.

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Tuesday, May 09, 2006

Venezuela Increasing Influence in Bolivia

Today's newspapers tell of growing Venezuelan influence in Bolivia. Indeed, Venezuela is to open branches for two banks in Bolivia. The banks in question are the Banco Industrial de Venezuela (BIV) and the Banco de Desarrollo Economico y Social de Venezuela (Bandes).

According to its website, Bandes is a "financial agent of the (Venezuelan) State, to attend projects oriented to economic desconcentration". Bandes was created by Chavez's administration and is a development bank. This bank has the power to operate both in Venezuela and on foreign soil. Also, reading to their mission statement, Bandes would probably like to be an alternative to the IADB.

The BIV, on the other hand, is a much older bank. According to their website is was created by the Venezuelan State in the 1930s and nowadays, the Venezuelan Finance Ministery is the majority stockholder. In 1999 the purpose of the bank was modified by law, so that they can now give credit to the agro sector. Perhaps this bank is entering Bolivia in order to help with the forthcoming land reform? According to the bank's mission statement, this bank should only be able to operate in Venezuela. Another hint to Bolivia becoming Southern Venezuela?

Both are state-controlled banks and will, presumably, serve no other purpose than giving logistic and financial support to Evo's soon-to-be dictatorship. Also, it is through these banks that Venezuela will increase its control of the Bolivian economy.

In a separate piece of news, La Razon reports that in the last four months, 1131 Venezuelan and Cuban citizens entered Bolivia. Although the government says that all of these came to Bolivia as tourists, in official visits, for work, business, transit and others, Podemos MP Hoz de Vila points out that before Evo's December election victory, Bolivia did not get as many visitors from these countries. So, he concludes, the political purpose of these visits should be clear. I must say I agree. I do not believe for one second that Cubans are able to travel freely and let alone as tourists!

And to think that there is still people out there that think that Evo is doing everything just for Bolivia.... it's just sad.

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Monday, May 08, 2006

What's Next?

After the oil/gas nationalization and a strong hint that mining and forestry would follow, the government is now preparing a land reform. Los Tiempos reports that the government is thinking of launching their land reform sometime before the Constituent Assembly begins. This would constitute the second land reform in Bolivia in a period of 53 years. Expect another circus when this happens -presumably before the election of Constituents as well.

Land Viceminister Almaraz said that in case of resistance by the landowner elite, the government will be ready to use public force. Could this be the spark that ignites the secessionist fire?

Another fatal blow to property rights and the rule of law -brought to you by Evo.

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Nationalization Hangover (Update 1)

Now that the nationalization has ended among feasts and celebrations, it's time to go back to the real world. El Deber reports that an Indian enterprise (Jindal Steel and Power) interested in obtaining a license to exploit the Mutun may not go further. Its representative in Bolivia said that the conditions imposed by the government are to harsh and do not really justify the investment: 50% of the steel earnings and 70% of iron. Under these circumstances, the estimated investment of $3000 million will not be viable, they said, although they have sent a reply to the government and are still waiting for an answer.

Also, the president of the Engineer's Society of Bolivia said that Bolivia should accept that the enterprise to work in El Mutun will be foreign, as there are no Bolivian enterprises with the capacity of investment needed ($1000 million minimum). This only confirms what I said in a previous post. The great loser of this nationalization is Bolivia.

Update 1: It's official: Jindal Steel & Power has left the race for the Mutun. This means that from 5 companies interested in gaining rights to exploit the Mutun only 2 are left -Siderar from Argentina and Mittal Steel from the UK. The vicepresident of the Santa Cruz Civic Committee pointed that the process is generating too many doubts -geez, I wonder why. He also said that the government does not want any company gaining these exploitation rights so that they can be given to Venezuela. "We have information of a Venezuelan delegation auditing the Mutun, and our lack of confidence comes from Executive trampling over the studies made by the previous two presidents with much harsher conditions, so that no enterprise will be interested in exploiting these resources", he added. Read it here.

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Sunday, May 07, 2006

Chavez shows true colours - Evo to follow soon

Venezuelan President Hugo Chavez has threatened to stay in power until 2031, expanding last year's estimate in one year. In complete disregard for democracy, Chavez said that if opposition boycott this year's elections, he will make a decree allowing another referendum to take place and secure his position for 25 more years.

The dictator said "(...) and even if they [the opposition] accuse me of willing to perpetuate myself in power, I ask you: Do you agree with Hugo Chavez being Venezuelan president until the year 2031?", making full use of his demagoguery powers -by starting his reasoning in one direction and ending it in another. He then put forward Fidel Castro's example and said that someone sentenced to death cannot have a plan to stay in power and knows that an imperialist plan will anhilate him at any moment, anywhere.

El Universal also has an article explaining Chavez's plans for expanding his power, on three accounts (here). These accounts are anti-capitalism, anti-US stance and expansion of the project -
who would have predicted that the next Cold War would take place in Latin America? And there is no better example of how this last part is working than Bolivia. The level of Hugo Chavez's dominance in the Bolivian government is unbelievable. Now, in the last episode of the soap opera, Evo Morales has invited Chavez once again, this time to launch MAS's platform for the Constituent Assembly (CA) (here). In this event, the guest speaker will talk about "the experiences of his Venezuelan peer, the way in which he solved the previous Venezuelan dictatorship -which, of course, had American support-, the banking crisis and the organization of the referendum". In other words, it will be a crash course for turning Bolivia into a Castrist dictatorship.

Sadly, Bolivia will obediently follow Venezuela's path and, despite all warnings, will not notice what has happened until it is too late and Bolivian balseros start flooding the Titicaca lake in order to go to a -let's hope- Humala-free Peru. As I argued some days ago, what happens to the gas is irrelevant, Evo has already won the CA and Bolivia's descent to authoritarianism and economic disaster is unstoppable now.

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Saturday, May 06, 2006

Oil Wells That End Well ....?

BBC News report that Spain has accepted Bolivia's nationalization plans as their delegation reached an agreement with Evo's administration (there is now word on what Repsol will do next, however). On the South American front, Brazil and Argentina have also accepted Bolivia's actions (here). So, Evo seems to have gotten away with it. But did he really?

Bolivia is no energy giant, like Venezuela. Therefore, taking a step like that on May Day is a huge gamble -so much's obvious. Evo has said that the increase in government earnings will compensate for the lack of investment from oil companies. The question then becomes whether this is enough.

Some companies have already said that they would rather invest in Al-Qaeda torn Pakistan than in Bolivia (here). Others may not say anything or grab headlines, but will surely follow the same reasoning. And this where Bolivia's losses begin. So, government earning will compensate for the lack of investment of oil companies, but what happens to all other investment now looking the other way? Sadly, this may be one of the least important considerations for the government: if we talk on political terms, Evo has already won his reward -in the form of the forthcoming Constituent Assembly (here).

It is really a confortable position just bash and trash Goni's privatization and contracts and say that this 'reform' was long overdue. It is really easy saying that the prices we negotiated were too low and that Evo corrected a wrong. It is not difficult falling prey to conspiracy theories where the multinational corporations and the rich are always to blame. On the other hand, it is more difficult to make people understand that there are other ways of renegociating prices and contracts -ways that will not hurt Bolivia's prospects.

But, what the hell, perhaps it is only a matter of marketing a myth.

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Wednesday, May 03, 2006

Chavez to visit Bolivia Later Today (Update 4)

Reuters and Stratfor report that Chavez has announced a surprise visit to Bolivia in order to discuss Evo's nationalization decree. He will bring along a team of oil technicians and will (consider whether to) give Bolivia aid.

This is the last step for Venezuelan consolidation of power in Bolivia. Is it me, or Chavez parading in La Paz is somehow reminiscent of that black-and-white film showing Hitler strolling in Paris?

The visit is scheduled for today (Wednesday) and Chavez is expected to spend the night in La Paz. Tomorrow, the puppeteer and his puppet will head together for the summit in Brazil.

More details as they become available.

Update 1: The purpose of Chavez's visit to Bolivia is, according to La Razon, "the creation of a joint strategy fot the defense of the nationalization of hydrocarbons". This statement alone should show Chavez's hand in the matter and the lack of "sovereignity", which is one of Evo's main selling points. They are expected to confirm Bolivia's position on the issue on the summit to be held in Brazil.

Update 2: Meanwhile, PDVSA and YPFB have sealed an alliance. This alliance will be signed in the Chapare region (the coca-producing region in Cochabamba) and will give PDVSA exploration rights in Bolivia. It seems that nationalization is nothing but a way of transferring rights (and control) to Venezuela. YPFB will become YPFV. The coca producers from the Chapare region have offered their help in order to secure the gas/oil installations taken by the military on Monday.

Update 3: Lula has been quoted as saying that Bolivia's sovereignity cannot trample over Brazil's. Petrobras, on the other hand, does not accept the new terms and has announced the halt of investments and that they will bring Bolivia to trial.

Update 4: Evo will appoint the boards of all nationalized companies by decree (here). So, expect corruption to reach the sky.

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Talks on Morales' Nationalization Decree to be held on Thursday

According to the BBC and El Universal, Argentina, Bolivia, Brazil and Venezuela are going to hold a summit on Thursday. The meeting will take place in Foz do Iguazu and will discuss South America's energetic policies. One of the main issues will be Morales' nationalization decree, which is supported by Chavez and is believed to have a great impact on Brazil and Argentina.

Meanwhile, Brazilian sectors have accused Venezuelan dictator Hugo Chavez of being a bad influence on Bolivia. "Without doubts, Bolivia's nationalist populism is inspired and supported by the Venezuelan President", said a speaker for the Sao Paolo Industries Federation. "The integration -or disintegration- [of South America] is no longer lead by Brazil, but by the Venezuelan president", he added. Chavez denied any involvement in Morales' decree, but said he supported it. Now there's a surprise.

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Evo Morales' Master Stroke

While most people are still in a state of shock and awe, debating about the nationalization decree's reach and details before saying anything, only opposition party UN has noticed the political implications of this action.

Evo orchestrated the event carefully, so that pomp and circumstance would accompany the event. All newspapers called the day "historic" and all news programmes went on and on about how Bolivia made headlines all over the world -which are, incidentally, true. If we sum to this the banner reading "Nationalized. Property of Bolivians" and the flag beside it, things must have struck a chord with everybody who still believes in class struggle and the rich (foreigners) exploiting the poor, everybody who has to subsist in poverty and near poverty was given a hope that things would really change this time (nobody even considers that this change can be for worse), everybody who does not know the importance of private investment and everybody who does not have a clue of consequences and international relations. In Bolivia, that's the majority.

Whether he was just following Venezuelan instructions is irrelevant. For the common denominator among the people, Evo is a hero who gave the people back what was rightfully theirs. From now on, Evo is part of the popular imaginary as a champion of the poor. Things may swing fort and back, as Boz predicts, and the final details and reach may not be known for a long time, as opposition party Podemos and the oil companies have noted (read Guccio's point here). Yesterday, I talked with my parents in Bolivia and they told that some quarters are even saying that most points in Evo nationalization decree were aleady approved during Rodriguez Veltze's term and are, in fact, nothing new. The only new thing here is the spectacle, which indicates this is nothing but propaganda (please note I have not been able to confirm this point). For most people these will be just irrelevant details and they will not care about them. For them, energy is already Bolivian property and even if they don't get to see a penny, they feel better off.

It is also interesting to note that May Day was the day in which advertising for the constituent assembly was due to begin. While Podemos and UN probably started out with some annoying jingle on a couple of tv and the radio stations, Evo made international headlines. What can Podemos and UN say that will get them votes, when Evo shows them images of the confiscated oil/gas properties and tells them that he did in 3 months what "neo-liberal" politicians didn't do in 20 years and that he needs more support ? Evo has already won the Constituent Assembly, and by a landslide. Say goodbye to Bolivian democracy and hello to decades of Evo.

Update 1: Candiaman posts a comment on a previous post that would seem to confirm this hypothesis: "Today we (bolivians) have been targets of tv and radio spots saying "Bolivia is changing, Evo has stayed true to his word" then follows a basic naive explanation of the nationalization process."

Update 2: Candiaman reports more on the situation in Bolivia in this post. He writes that there are already three different tv and radio spots around: "Now we have 3 more variants of tv and radio spots, one showing a 3 step nationalization, another explaining the after/before using the 82%/18% ratio and the one i like to call Evo: a True Bolivian Hero".

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Ollanta Humala's Reaction to Evo's Nationalization

Presidential candidate Ollanta Humala denied that he would do something similar to Evo Morales. The difference would be that he (Humala) does not support expropriation or "statization" of the companies in the energy sector, only nationalization. When asked what this nationalization meant, he replied that it was state participation through enterprise ownership, stock shares, strengthening of regulation, taxes and new contracts, but witht the partnership of private investment. Read it here.

Evo Morales' decree does not explain and most of those involved are still waiting for details. Humala's proposal so far, however, does not sound awfully different. Another Chavez alumn at work.

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Tuesday, May 02, 2006

Reactions to Evo's Oil and Gas Nationalization Decree

Evo's nationalization decree has made front pages in many newspapers around the world. Reactions cover a wide range of emotions and so far, the key players have reacted as follows:

Bloomberg reports that Repsol and Petrobras may face losses. Oil analysts from the Deutsche Bank AG in New York are quoted as saying that this is a worse scenarion than expected. It is expected that only a portion of oil production goes back to the Bolivian government, not all of it. The managing director of Global Gestion says that Bolivia has impacted on hydrocarbons production and that the impact is mostly psychological. On the contrary, an analyst at Raymond James & Associates says that this will not have a significant effect on energy companies' earnings and says that Bolivia can improve its revenue without affecting much at the companies economics. However, Repsol's shares are down 2.19% (at 12:35GMT).

According to La Razon, Brazilian Mines and Energy Minister described the decree as "an unfriendly action that can be understood as a break from all agreements with Bolivia". Petrobras said that the decree changes current regulation and that in all previous negotiations there were no hints that 'nationalization' would be so hard.

In the same article, Spanish Foreign Ministery expressed Zapatero's concern and hopes of negotiation and dialogue taking place, so that the interests of all parties can be protected. The Partido Popular (PP) said that they expect the Spanish government to defend Sapnish interests and interprets Morales' decree as a failure for Zapatero's foreign policy.

According to El Pais, Repsol would be willing to negotiate new contracts with the Bolivan government. So far, they are waiting to hear details about nationalization and are confident to reach an agreement and stay in Bolivia.

In Bolivia, reactions ranged from happiness (in El Alto, where fireworks were heard) to denounces of fraud and uncertainty. So far, the reactions can be divided in 3:

Support for the government's decree: COR El Alto, Teachers' Union, Miners' Union, Chaco Civic Committee,

Undecided: Santa Cruz Civic Committee, principal opposition group Podemos and Private Entreprenuers.

Against the decree: Opposition groups UN, energy-rich region Tarija and the COB.

According to Los Tiempos, the reactions from social groups in Bolivia is somewhat different:

Undecided: COR ElAlto

Against: COB, ADN, M-17

Coming Soon:
According to Los Tiempos, Evo is planning to nationalize the Mining and Forestry sectors. He referred to the gas and oil nationalization as the "first step".

More photos:

From AFP:
The soldier 'recovering Bolivian property from looters'.

From Reuters:
Note the t-shirt from the supporter behind: "Che, Fidel, Chavez, Evo". Does anybody else feels nausea?

From AP:

The military in control of a Petrobras building.

A well-shot photo from La Prensa, showing the military in control of a Petrobras oil installation.

A list of oil/gas fields and their owners, from La Prensa:

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Monday, May 01, 2006

BREAKING NEWS: Evo Nationalizes Energetic Resources (Update 1)

Evo Morales has just nationalized the natural gas and oil industry an hour ago with a decree. Earlier today, he spoke at the San Alberto gas and oil field (owned by Petrobras) and ordered foreign companies to send their supplies to YPFB for sales and industrialization. He also said that if companies were not willing to follow his decree, they would have to leave Bolivia within 6 months. Morales referred to the day as being "historic" and also warned that he would take over all companies that were privatized in the 1990s. With a touch of populist spectacle, he had a soldier install a Bolivian flag on top of the oil field for all to see.

AP News reports no reactions from the foreign companies, opposition, or other governments.

Read the AP News' piece here.

The BBC's story is here.

The UK's Financial Times (here) also reports that Evo has sent the military to occupy 53 oil and gas fields and installations.

According to Reuters and ABC, foreign companies would be left with only 18% of their production.

According to this piece, Spanish government has issued a statement saying that they hope that Morales negotiates the new contracts and keeps in mind the interests of other parties. They also hope that Morales does not send a negative message to investors worldwide. Too late.

Xinhua reports that the price of crude has felt the effect of Evo's shenanigans in Bolivia.

EFE News reports that petrol stations (owned by Bolivian investors) were among the oil and gas installations seized. Some unnamed diplomats said that the decree was much harsher than expected and that they expect foreign oil companies to initiate arbitration or leave the country.


Read the whole nationalization decree at Barrio Flores (in Spanish).

Boz's opinion on how Evo will reacto to international pressure can be found here.

Ciao! has two posts on the subject: here (he argues that Evo took the worst possible way and that in 3 months we will start knowing the success of the decree) and here (he argues that YPFB will become a political instrument).

Publius Pundit also comments on the news.

MABB has an international news roundup.

Update 1: A comment left by Candiaman reports the reactions directly from Bolivia:
"the gas stations were literally invaded by cars in just a few secs after the speech ended, by now some of the have been depleted..." and
"Just spoke with friends in Santa Cruz eho are working al petrobras and hace confirmed a rumor, they can´t get in the buildings the military forces won´t allow people to get in."

Thanks for the comment, Candiaman! You can see the full comment below.

Two photos from AP News Agency.

Look at the Cuban and Venezuelan Flags celebrating. A sign of things to come.

The banner reads "Nationalized. Property of Bolivians". Shameless populism in action.

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