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The Ghosts of October and the New Hydrocarbons Law
"The Gas is Ours"
by FORREST HYLTON

“Mesa is like Kerensky.” Gonzalo Sánchez de Lozada

The Last Czar

On October 20, in revenge for Bolivian President Carlos Mesa’a approval of the “trial of responsibilities,” congressional representatives affiliated with former president Gonzalo Sánchez de Lozada’s party, MNR (National Revolutionary Movement), voted for the Hydrocarbons Law presented by the Mixed Commission on Economic Development. Given that MAS (Movement Toward Socialism) led the commission, the MNR voted for an old nemesis against a newer enemy. President Mesa’s bill — which favored foreign oil companies in keeping with Sánchez de Lozada’s Decree 1689 — was not even seriously considered. Only the regional delegation from Tarija in the south and some MIR (Revolutionary Left Movement) deputies opposed the legislation that made it through the first of three stages in the passage from bill to law.

Consistent with MAS’s interpretation of the results of the July referendum and the demands of last year’s October insurrection, the new law would require contracts signed under Decree 1689 to be re-negotiated, with a higher percentage of ownership passing to the state oil and gas company (YPFB), along with a rise in taxation from 18% to 50%. According to the oil companies that oppose it, if the law is not seriously amended during the second or the final stage in November, it will put $3 billion of foreign capital invested since 1999 at risk.

In an October 22 interview with the editorial board of the Miami Herald, Sánchez de Lozada accused Mesa of being a coup plotter. Having consulted with his lawyers at the Miami firm of Steel, Hector, and Davis, “Goni” reversed earlier declarations regarding his willingness to appear before a Bolivian court. He now declined to comply with future extradition requests, since according to Sánchez de Lozada in Bolivian there exists a “lynch-mob environment.” In said interview, the seventy-four year old reiterated his claim that he had been the victim of a vast conspiracy in which Mesa had played his part. Commenting on Sánchez de Lozada’s assertions, former Minister of Education Hugo Carvajal, himself a participant in one of Sánchez de Lozada’s shadier political maneuvers*, said, “What happened in October was not a product of ‘narcoterrorism’ and ‘narcoguerrillas’ or any of that. There was no conspiracy…. At the time, he said that there was action against the established government, but he never presented any evidence or explained the issue adequately” (La Prensa, October 23).II. Imperialism, Sub-imperialism, and Big Oil

Like his former boss, President Mesa also retracted previous statements. The opposition to the Hydrocarbons Law coalesced so swiftly and from so many directions that Mesa moved aside and made no serious effort to block it. Others would take care of that. Over the weekend of October 23-24, however, Minister of the President José Galindo inundated the airwaves with warnings that if the Hydrocarbons Law were not substantially amended during the following stages, foreign oil companies, including Petrobras, would pick up and leave Bolivia. For its part, the Brazilian government stated that the $600 million in road-building credits, for a country in which 80% of roads are unpaved, was conditional upon the passage of a law that did not put Brazilian investments — meaning those of Petrobras– in danger.

Charles Shapiro, US Under-Secretary of State for the Andean Region, arrived in La Paz on October 21, and was quick to step into the vacuum created by Mesa’s decision to “respect” legislative autonomy. Shapiro pointed out discrepancies that the new law would introduce with laws guiding the FTAA, a version of which the US government hopes to install in the Andean region in the coming years. The Bush administration is currently negotiating free trade agreements with Ecuador, Colombia, and Peru, with Bolivia “observing,” and Shapiro spent the weekend of October 23-24 lobbying political parties to re-draft the law so that Bolivia would not lose its “opportunity” to become part of the US-dominated regional trading bloc. As Shapiro put it, “The United States also has laws.” A meeting with Evo Morales’s MAS, whose parliamentary commission designed the law under the leadership of Santos Ramírez, was included in the Under-Secretary’s weekend agenda**.

By any account, Evo Morales and MAS have scored a stunning victory over both the Mesa administration and the US government — thanks to the vengeance of Sánchez de Lozada’s MNR! If the bill makes it through the next two stages intact, Mesa will have to veto it, thus losing any remaining shred of popular legitimacy; or he will have to watch from the sidelines as the US government re-engineers the bill to protect the investments of petroleum multinationals. In either scenario, Mesa loses and Morales wins. As if to illustrate the point, the Brazilian government has announced that its representative will meet with Morales rather than Mesa, reflecting a realistic assessment on the part of Lula and his advisors as to where the threat to multinational petroleum profits lies. Those who are hopeful about a Kirchner-Chávez alliance that would create Petrosur, and eventually include a partnership with Petrobras, might find reason for skepticism when considering Petrobras’s staunch opposition to the new Hydrocarbons Law in Bolivia, and the determination of the Brazilian government to repeal it by lobbying Morales.III.

Revanchist Regionalism

In addition to responses from the great powers of the hemisphere, in Bolivia the approval of the law stirred rightwing reaction in the south (Tarija) and east (Santa Cruz). Earlier in the week, and for the first time, President Mesa had confronted the rightwing agro-industrial bloc by declaring that the department of Santa Cruz, where an important portion of Bolivia’s gas reserves lie, would have to show “solidarity” with other departments rather than try to bolster its power and wealth at their expense.

Even before MAS’s law was approved, polarization along regional lines had begun to deepen, and the new law has added fuel to the fire. In Tarija and Santa Cruz, the Civic Committees were livid over the “centralist” domination of their respective regions — a domination that MAS, the MNR, and MIR have enshrined in law. The Civic Committees and entrepreneurial associations demanded a radical rewriting of the bill. Like the “federalists” from La Paz at the end of the nineteenth century, who came to power through victory in a civil war, today’s regionalists use the disproportionate amount of revenue transferred from their regions to the central government as an argument for political autonomy.

Leaving aside the myth of a “productive, modern, entrepreneurial region” that has pulled itself up by its bootstraps — the dominant self-definition in Santa Cruz — as early as the administration of Hernán Siles Suazo (1956-60), the eastern lowlands were favored for development with state subsidies from the highland mining industry as well as foreign loans and credits. This deliberate transfer of wealth and power to the east was more fully systematized under the dictatorship of General Hugo Banzer Suárez (1971-78), whose core supporters were the agro-industrialists organized in the Civic Committee of Santa Cruz and the FSB. The vicious coups of 1979 and 1980 — the latter orchestrated by ex-Nazi exiles, neo-Nazi mercenaries, and a cocaine baron, and actively supported by the Brazilian dictatorship — can be read as desperate regionalist attempts to block the triumph of a progressive center-Left coalition based in the western highlands and valleys.

Thus the politics that the self-appointed spokesmen (not women) of the south and east promote is counterrevolutionary in a concrete historical sense. It has as its aim the rollback of the October agenda of national sovereignty over natural resource extraction, refining, consumption, and export. The president of the Chamber of Industry, Commerce, Services, and Tourism (CAINCO), Svonko Matkovic, alerted the Congress of the Santa Cruz Association of Private Enterprise that the Inter-American Development Bank (IDB) and the IMF had frozen credits until a new law could be drafted. Hysteria would not be too strong a word to describe the response from regionalist entrepreneurial associations and Civic Committees, which is not directed against the MNR for having voted for the new law, but rather against Mesa, whose own bill threw the multinationals and their cruceño partners most of the bones they asked for, raising taxes to a maximum of 32%.

The irony is that even as his party voted for the law in question, Sánchez de Lozada has close allies at the highest levels of key international financial institutions — like Alfonso Revollo, his former Minister of “Capitalization” (privatization), who headed up the Bolivia desk at the World Bank until the Mesa administration demanded a new appointee, at which point Revollo became part of the “Modernizing the State” group at the IDB. In a meeting with the Fiscal Commission of the Chamber of Deputies, representatives of both the IDB and the World Bank worried over the possibility of a default on debt service if the new Hydrocarbons Law is passed without serious revision. IV. The Past in the Present?
At a moment marked by record prices of crude oil, nightly US air strikes on urban Iraqi neighborhoods, and an anti-colonial resistance that depends, tactically, on car bombs, kidnappings, and videotaped beheadings, it may be of some comfort to know that somewhere out there, the specter of Bolshevism still haunts the counterrevolutionary imagination; and that the passage of a new Hydrocarbons Law through its first stage was enough to provoke such an uproar, as well as what novelist William T. Vollmann has called “the twinkling fear”***.

FORREST HYLTON can be reached at hyltonforrest@hotmail.com.

Notes:

* In September 2003, Carvajal resigned from his post as Minister of Education, took up his seat in parliament in order to elect the MNR candidate for the office of Defender of the People once the MNR had forced the hugely popular Ana María Campero out of the running. Carvajal then resigned his seat in parliament to resume his duties as Minister of Education.

** As noted in “From ‘Goni go home!’ to ‘Goni a Chonchocoro!’”, President Mesa recently negotiated an agreement with Morales, MAS, and the coca growers’ trade union federations to allow a cato (.5 hectares) of coca per family. US AID hailed the agreement because it would allow US AID to carry out its alternative development schemes in a climate of considerably less hostility. However, both Charles Shapiro and US Ambassador David Greenlee found it “worrisome” that Bolivia might fail to uphold what are euphemistically called its “international obligations,” which consist of the pledge to the US government to eradicate 8,000 hectares of coca in 2004, of which 6,000 hectares have already been eradicated. While US foreign policy toward Bolivia remains incoherent, there is no clear division between the State Department and the Pentagon-CIA.

*** In Argall (Viking, 2001), Vollmann uses the phrase to describe how British colonists during the first two decades of the seventeenth century felt about the proximity of indigenous groups in the Chesapeake Bay area, particularly along the James River.

October 28, 2004

Alexander Cockburn
Kerrycrats and the War