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IW 05

Bolivia

The revolutionary agenda in Bolivia

 

One of the first consequences of the massive electoral victory of Evo Morales was to unleash a crisis in the cabinet of one of its “allies”, Lula da Silva. When in La Paz the votes were still being counted, in Brasilia two ministerial cliques clashed: on the one side, minister Palocci (of Finance), the board of Petrobras and the Ministry of Energy; on the other, Marco Aurelio García, Lula's international assessors and the successors of Jose Dirceu.

Palocci and Petrobras rejected any renegotiation of the contracts signed a decade earlier with Bolivia and defended the position of having recourse to international treaties and courts in order to impose their continuity on Morales. “No economic imbalance exists to justify the annulment of the contract (Petrobras has with the Bolivian State),” declared Ildo Sauer, director of Gas and Energy of Petrobras (Clarín, 23 December). Sauer overlooks the fact that the “contracts in force” were signed when the barrel of oil cost 10 dollars, barely 15% of its present market value.

The same position was held by the rest of the oil companies operating in Bolivia. During all of last year, the conglomerates threatened to withdraw if Morales won the elections and reduced their investments by more than 40% in 2005. Eight of the biggest twelve (among them Repsol) had already taken the first steps to have recourse to arbitration before “international courts” in order to impose the continuity of the contracts on the new government.

In opposition to Palocci and Petrobras, Marco Aurelio García —the principal operator of Lula's foreign policy— gave in in the face of the evidence: the massive character of Morales' electoral victory had broken any attempt to maintain the “old contracts”. Garcia's position won out and due to this Evo Morales agreed to visit Brazil and meet with Lula.

Something similar occurred with Repsol, which a short time before had publicized a curious note affirming that “the new Bolivian legal framework is illegal” (sic) (El Cronista, 3 June). While their stocks were plummeting in Madrid when the magnitude of Morales' victory became known, Antonio Brufau rushed to “greet him” and to declare that “he would be able to arrive at an agreement with Morales in the same way as agreement had been reached with Chavez.” This turn of Brufau's served to seal Morales' trip to Spain.

Behind Petrobras and Repsol —the oil companies doing the most business in Bolivia—, the others are also putting forward the renegotiation of their contracts. They have already come to an agreement on what will be their battle field.

Morales' oil program

Morales' program on hydrocarbon resources was already approved in the referendum of 2004 and has parliamentary sanction: a rise in the royalties and taxes paid by the oil companies and the “re-foundation” of YPFB, the state-owned hydrocarbon company dismantled with the privatizations. The aim of the former president, Carlos Mesa, of non-compliance with this norm, produced the crisis of last June, the fall of the government and the anticipation of elections. The victory of Morales is the fundamental political result of that crisis.

Morales' position is that the “re-founded” YPFB regain the property rights to the oil and gas reserves and, as a result, the property rights to the totality of reserves extracted (property rights at the “well head”). This constitutes an inversion of the previous regime, which granted those property rights to the oil companies. Under the new regime, the oil companies would extract the crude and the gas on YPFB's account and they would be obliged to deliver it to that entity (at a price set in the contract). Foreign trade of hydrocarbons would remain in the hands of YPFB. The state oil concern would serve as intermediary between the Nation and its natural resources and the world market.

“The companies have no right to exercise property rights on the gas or the oil. Our government is going the nationalize hydrocarbon resources on the basis of the Constitution and any company wishing to invest will be obliged to subordinate itself to Bolivian law. The current contracts are void (...) The clause in those contracts which says that the company acquires property rights at the well head has to be eliminated. The State is owner of the subsoil and the surface,” declared Evo Morales (Página/12, 21 December). “The State is going to assume responsibility at the well head, control, and will define domestic prices, foreign sale prices, the utilities, cost structure and analysis (...) will decide what the profits of the oil company will be”, completed the Vice President elect, García Linera (Clarín, 23 December).

This nationalist program clashes with the pretensions of the oil concerns, especially because the latter are aiming for the big business of exporting liquid gas to Mexico and the United States. For this reason, the legislation containing said program was not ratified by Mesa and the companies have refused to renegotiate their contracts. One newspaper concludes that the exploitation of oil and gas finds itself today “in legal limbo” (El Cronista, 17 November).

The conglomerates are disposed to accepting an increase in the taxes and royalties, also because they believe they would be able to easily circumvent (as they have been doing for a long time) the controls of the weak Bolivian State. However, they reject that the Bolivian State regain property rights over the hydrocarbon reserves at the “well head” and the administration of foreign trade.

The oil companies have placed property rights over the reserves on their books as capital (on which they may obtain financing). The property rights of the hydrocarbon reserves at the “well head” allows them to capture integrally the enormous extraordinary profit offered by the barrel at 70 dollars or the unit of gas at 12 dollars.

The subject is key also for Morales. Without effective property rights over the reserves and the oil at the “well head”, the “re-founded” YPFB would be nomore than an empty shell, that is, a Bolivian version of the Argentine Enarsa. By establishing a purchase price for the hydrocarbons on the basis of domestic costs of production to then sell them itself on the world market, the Bolivian State could appropriate a part of the oil profits (which today go almost integrally into the pockets of the conglomerates). Without regaining that extraordinary profit, Bolivia has no possibility of reconstructing their State or of satisfying the most elemental of the demands of the masses. Morales aims to establish in Bolivia a regime of hydrocarbon reserves similar to that of Venezuela, where Chávez shares down the middle the profits from fuel with the international conglomerates.

Bolivia and Venezuela

Chávez promotes “partnership contracts” (the forming of joint ventures with a majority for PDVSA). The oil companies resist accepting inBolivia the same kind of contract they accept signing in Venezuela. The reason is that Bolivia is not Venezuela: capitalist development led in Venezuela to the creation of a state company that today the conglomerates cannot ignore; in Bolivia, the “re-foundation” of such a company would harm the concrete interests of the oil companies. In Venezuela there is a State which has a greater power of arbitration before international capital than the Bolivian State; when PDVSA was on the point of being gutted, the Chavez government reconstructed that capacity for arbitration.

In Bolivia it would be inviable, for now, because YPFB simply does not exist.

Argentina, Chile and Brasil

Argentina is one of the main buyers of Bolivian gas, a part of which it later re-exports to Chile. Repsol is on both ends of the business: it is seller in Bolivia and purchaser in Argentina. The sales price is 2 dollars (when the reference price internationally oscillates between 12 and 15). For the broadening of this business the constructionof a gas pipeline is contemplated between Bolivia and the north of Argentina, in which Ressol and Techint are involved. The other big purchaser of Bolivian gas is Brazil which, through Petrobras, also operates as seller and purchaser.

Evo Morales' victory has created a crisis in this business. First because it demands that the sales be “State to State” (which would eliminate the gigantic deal enoyed by Repsol y Petrobras operating on both sides of the borders). Secondly, because it aims at increasing the sales price in order to “bring it closer” to world market values.

Repsol, Techint (in its double character as pipe and tubing provider for the gas pipeline in the north and oil company through its subsidiary Tecpetrol) and Petrobras have already begun to “operate” in order to keep its deals in place, with the support of the governments of Argentina, Chile, Brazil and Venezuela.

“The companies already have a plan to negotiate with Morales,” reported daily La Nación (20 December): “if Morales raises the gas, for example, higher than 2.70 dollars per million BTU (an increase of 23%), it would not be profitable to build the gas pipeline (which) is only viable at a reasonable price” (ídem).

The oil companies threaten to seek supplies elsewhere. The “Argentine companies” which spoke to La Nación (20 December) anticipated that if Morales attempts to raise the price higher than 2.70 dollars they would develop coal production to substitute for Bolivian gas. The Kirchnerist Fellner, Governor of Jujuy, took part in the threats: “at that price, I can develop gas in my province” (ídem). Fellner was designated as “special presidential envoy” to Bolivia, where he will work with the “special mission” of the Mercosur, which includes among others the Brazilian Marco Aurelio García (Clarín, 17 December).

Chávez participates in the game with the announcement of a gas pipeline from Orinoco to Brazil and Argentina, a pharaonic undertaking which “is nothing more than speculation on the part of Lula's government in order to warn Brazil that alternatives exist if he attempts, as Morales insinuated yesterday, to make nations hostage to his gas” (La Nación, 14 December).

A similar threat, but one much more realistic, is that made by Repsol and Techint. The same companies that planned a partnership with the gas pipeline between Bolivia and Argentina have just signed a contract with the US company Hunt Oil and the government of Chile to supply the Chilean market with gas extracted from the Peruvian reserve Camisea. From Chile, once liquified, the Peruvian gas could be exported to Mexico and the United States. “Repsol has very good relations with the (Argentine) government and is used to working together with officials in the energy area of the Executive. Which is what occurred, for example, with the announcement of the triangular accords between PDVSA, Repsol and Enarsa, which greatly favored the Spanish concern” (Página/12, 31 December). Techint is also a close partner of Kirchner's government.

Together with the threats arrive the “offers”. Petrobras has just offered the Bolivian State a stock option in the refineries which the Brazilian company operates in Bolivia. It has also offered a stock option in the petrochemical pole which is to be built in the Brazilian city of Corumba, on the border with Bolivia, to process Bolivian gas. In addition to Petrobras, in this undertaking participate the Brazilian petrochemical companies Brashken and Repsol. The Argentine government, for its part, offered to raise the unit price of gas it imports from Bolivia to 4 dollars, which would be a duplication of the current prices but which would barely reach a third of its international value. The conglomerates and the governments with which they are allied are attempting to reach a common agreement, in which they are prepared to concede “something” of the oil profits in order to conserve the fundamental: property rights over extracted reserves and hydrocarbons.

The “Latin American allies” are threatening Evo Morales with boycott and foreign strangulation if it does not go along with the dictates of the oil companies with which each one of them has allied itself.

Santa Cruz

The Bolivian oligarchy, the oil companies and imperialism have won a very important point of support to defend their demands with the conquest of the prefecturas (governorships) of Santa Cruz and Tarija by the right. The upsurge of this virtual “dual power” in the Bolivian east is the direct consequence of Morales' capitulation in accepting the direct election of the prefects (something not established in the Constitution) and the over-representation of the eastern provinces in the Senate.

The Vice President elect, García Linera, qualified the power gained by the oligarchy as “a counterweight that the population has placed upon us (...) a wise signal of the electorate” (El Deber, Santa Cruz de la Sierra, 20 December). This is a sign of the impossible to hide tendency of the new government towards conciliation with the reaction.

The agenda of the Santa Cruz bourgeoisie —which not only has to do with its oil interests but also with the very powerful soybean agro export lobby-- clashes head on with that of Morales. The eastern provinces are calling for “decentralization” which means, fundamentally, the tranference to local governments of a substantial part of the resources of the State: “Juan Carlos Urenda, a Santa Cruz lawyer, says that the participation of the central State in the national income should be reduced from 75 to 33 percent” (The Economist, 17 December). The Santa Cruz bourgeoisie, which opposes the “re-foundation” of YPFB and any measure distributing land to the peasants capable of affecting their soybean interests, demands, moreover, its right to “execute” (in its own terms and for its own benefit) policies over natural resources and lands established by the national government. That is, the “right” to neutralize any resolution affecting its interests and those of its allies.

Coca

The Yanquis aim to have the narco-traffic business under their absolute control. The reappearance of Afghanistan as prime worldwide producer of opium (the base for heroin) after their occupation by the US has once again confirmed this.

In order to control the business —and to avoid growth in production which would topple prices and, above all, profits— imperialism has had recourse to the militarization of the producer countries and to the repression of the peasants. While this policy continues —in Columbia, in Mexico, in Peru— there is not the slightest possibility of an agreement between imperialism and the government of Morales. With the flag of the legalization of the coca leaf, Morales got 93% of the votes in Chapare, the principal producer region.

The question of the coca leaf leads directly to that of the Army. Imperialism has based used the so-called “war on drugs” to discipline and to penetrate deeply into the Latin American armies and in their intelligence services. Morales anticipated that the armed forces will stop being in charge of the destruction of illegal coca leaf plantations. Juan Ramón Quintana, a former military officer assessor to Morales and one of the candidates for the Ministry of Defence, denounced that the “special force (of the Army) for struggle against narco-traffic is an agency of the DEA,” the US anti-drug agency. Quintana denounced that the Army and the intelligence services, “instead of protecting the security of the Bolivian State, protect that of the United States (...) with the enormous risk that this implies for the security of the State” (Clarín, 28 December).

Behind the question of the coca leaf lurks the dispute for the control of the Army.

The character of the MAS

The MAS is not a party, as is the PT of Brazil. Neither is it a coalition of parties, such as the Frente Amplio of Uruguay. The MAS is a coalition of “diverse, and even contradictory social movements, grouped around the Confederación de Cocaleros (Confederation of Coca Leaf Producers) of Bolivia. It lacks a party structure. It has no party cadre with their own influence among the masses or even within the MAS itself.

The attempts at “institutionalizing” the MAS have failed, one after the other. “There is no habit of workingin commissions. The legislator Antonio Peredo wanted to organize a commission of international relations, but it did not work out. Neither did the one attempted by the leader Iván Iporre, for internal questions. Or a legislative commission which the congressional bloc tried out (...) In 2002, when Evo Morales announced his presidential candidacy, he designated a political commission. It met once. Now another is functioning, with more organization, but it can be changed by the chief. The identify of its members have never been revealed publicly” (El Comercio, Lima, 25 December).

Some spokesmen of the bosses class are preoccupied by the character of the political personnel that a party without leadership nor discipline could place in the ministries and secretariats, that is, in the command of the State. “It is impossible to hide the problem of the lack of technical cadre, compounded by the decision to include the indigenous in the government” (ídem).

“The assembly of the MAS is a mechanism for validating Morales' decisions, rather than for leadership” (ídem). Elements of the left and even revolutionaries take an active part In the local assemblies of the MAS.

Morales cannot count on a disciplined party bureaucracy, as can Lula in Brazil; neither can he count on a political structure with experience in the administration of the State, as can the PT itself, and the Frente Amplio in Uruguay.

Evo Morales, in person, will be obliged to confront the Bolivian masses in order to impose the accords — with the oil companies, with the Santa Cruz oligarchy, with imperialism — to allow him to make his government viable. He will be obliged to demonstrate then, in actual practice, whether he is capable of domesticating them.

The role of the Constituent

Bolivia —and Evo Morales— faces a set of explosive contradictions; the same ones which led to the fall of two presidents in barely two years. These contradictions cannot be resolved with maneuvers; they pose new confrontations.

The massive character of his electoral victory has left Morales without the possibility of taking refuge in the excuse of the “parliamentary consensus.” The political crisis going back to October of 2003 and the political and social polarization placed in evidence in the elections anticipate that the hour of definitions is drawing near.

Morales is obliged to negotiate “on three fronts” --with the oil companies, with the Santa Cruz bourgeoisie and with imperialism — under the “mediation” of Chávez, Lula and Kirchner. His supposed “Latin American allies” have already made it clear that they support, in fundamentals, oil interests. The possibilities of an accord —and its concrete terms — can only be explored and reached through clashes, blows, threats and counter-blows.

The function of the Constituent, convened in principle for next June, is to sanction these accords... if they see the light of day. It will not be an organ of deliberation; much less is put forward to satisfy the popular demands. It will be the venue in which to lend a constitutional character to the accords that Morales establishes with the oil companies, with imperialism, with the “Latin American allies” and, above all, with the oligarchy of Santa Cruz and that of Tarija.

No conciliation with the oligarchy of Santa Cruz, sworn enemy of the oppressed masses of Bolivia. For the election of a Constituent [Assembly] on the basis of a single district; no “over-representation” for the oligarchy. For the formation of committees of workers and committees of peasants for the nationalization without compensation of the hydrocarbon resources and their operating under control of the workers, and for the immediate expropriation of the big estates and the distribution of land among the peasants without land.

Program

In order to reach an agreement with the oligarchy, the oil companies, the “Latin American allies” and imperialism, Morales is obliged to abandon his own nationalist bourgeois program. He has no conditions with which to impose his program on such powerful enemies, when their fundamental preoccupation is, at the same time, the dismantling of the revolutionary tendencies of the masses.

Morales will have to abandon that program —and any attempt at “refounding” Bolivia— before the eyes of millions of workers and peasants, who have deposited in him their aspirations and expectations.

If he is capable of getting the masses to accept an accord with the oil conglomerates, with the bourgeoisie of Santa Cruz, with imperialism and with the governments of Latin America, Morales will have a presidency. Otherwise, Bolivia will enter a new, decisive revolutionary phase.

Nationalism of bourgeois content is getting ready to protagonize in Bolivia a new historic failure. Practical experience will have to teach the exploited that there is no intermediate road between national surrender and the revolutionary position of expropriation without compensation of the hydrocarbon resources and working class administration of the economy.

It is necessary to intervene in this practical experience of the masses through a program of demands which unites the most pressing demands of the exploited —nationalization without compensation of the hydrocarbon reserves, land for the peasants, the free cultivation of coca leaves, the crushing of the reaction in the provinces of the east— with the forming of workers committees, peasants committees, popular assemblies, in order to assure compliance with the people's demands and for the Constituent to be convened under terms and conditions which assure a popular majority with which to promote revolutionary changes.

To underpin the experience of the masses in Bolivia, we call for the organization of the struggle against the policy of blockage and containment promoted by Messrs. Lula and Kirchner (and, to a second degree, Chavez), on behalf of imperialism and the oil companies. In opposition to bourgeois nationalism which, inside and outside Bolivia, attempts to drown the continental revolutionary potential of the political process of the Altiplano, we call for the forming of an international front to struggle throughout the continent for the nationalization without compensation of the oil conglomerates, for workers control and administration of the nationalized resources and for the United Socialist States of Latin America.

Section prepared by the International Commission of the National Committee of the Partido Obrero