by Weekly News Update on the Americas

DEPUTIES PASS GAS BILL

On March 15, with virtually all of Bolivia's cities shut down by road blockades on the first day of a 48-hour national strike, Bolivian president Carlos Mesa Gisbert announced he would present the legislature with a proposal calling new general elections for Aug. 28, 2005. Mesa complained that the growing wave of protests and roadblocks was making the country ungovernable. Nine days earlier, on March 6, Mesa had presented his resignation under similar circumstances, but Congress rejected it. (La Republica, Lima, March 17, 18; Los Tiempos de Cochabamba, March 16; Centro de Documentacion e Informacion de Bolivia [CEDIB], March 17; El Diario, La Paz, March 18; La Razon, La Paz, March 16)

On March 9, Mesa had asked the Bolivian attorney general's office to order district prosecutors to arrest protesters; the prosecutors refused, saying in a joint statement that it is not their job to intervene in social conflicts. On March 17, the attorney general's office ratified that decision, while at the same time agreeing to launch an investigation into the protest organizers. (CEDIB, March 17; ED, March 18; Servicio de Informacion Indigena [SERVINDI], March 15)

Mesa's March 15 call for new elections came as Bolivia's Chamber of Deputies was in the midst of a heated and lengthy final debate over a controversial new hydrocarbons law. The Chamber's economic commission had recommended a version of the law backed by Bolivia's social movements, which would grant the state 50% of royalties from all hydrocarbons production; Mesa had proposed an alternative under which the state would maintain its 18% share of royalties while imposing a 32% "complementary tax on hydrocarbons" (ICH). Mesa insisted his proposal would add up to the same 50%, but critics complain that the ICH tax would be imposed gradually over time, and could be offset by tax credits and deductions.

In the pre-dawn hours of March 16, after 12 hours of debate, the lower house voted 47-36 to approve a compromise version of the bill proposed by Chamber of Deputies president Mario Cossio. The new version would maintain the 18% royalties and create a 32% "direct tax on hydrocarbons production" (IDPH), to be imposed immediately and with no deductions or loopholes. The bill now goes to Bolivia's Senate. (La Republica, March 17; LTdC, March 16; CEDIB, March 17; ED, March 18; La Razon, March 16)

Deputies from the Movement to Socialism (MAS) and the Indigenous Pachacuti Movement (MIP) voted against the compromise bill, along with a few legislators from the Revolutionary Left Movement (MIR), the Nationalist Revolutionary Movement (MNR) and the New Republican Force (NFR). The remaining MIR, MNR and NFR deputies voted for the bill. (LT, March 16) Still, MAS deputy and campesino leader Evo Morales Ayma said he was moderately satisfied with the legislation, although he insisted that "the struggle will continue in the National Senate" to achieve the 50% in royalties.

Mesa, on the other hand, immediately announced he would refuse to sign the version passed by the Chamber of Deputies unless it undergoes revisions. (La Republica, March 17) Two oil and gas companies with major investments in Bolivia--the Spanish-Argentine Repsol-YPF and the Brazilian state company Petrobras--also expressed their displeasure with the bill. On March 20, the Bolivian Chamber of Hydrocarbons, a petroleum industry business group, chimed in, calling the bill "regressive and counterproductive," and saying it would effectively constitute "a confiscation" of private investments. If the Senate makes changes to the bill, the revised version would go to a vote in a plenary session of the full legislature. (AFP, March 20; La Jornada, Mexico, March 19)

At a March 16 press conference, Evo Morales and Bolivian Workers Central (COB) executive secretary Jaime Solares announced that the country's social, labor and political movements would temporarily suspend their protest blockades, but would resume mobilizations as soon as the Senate begins considering the new law. While criticizing the political coalition that passed the compromise version, Morales said the bill contains a number of strong points which must be defended in the Senate against Mesa's attempts to remove them: it would guarantee state ownership of all hydrocarbons; force companies with existing contracts to submit to the new provisions; reestablish the state oil company, Yacimientos Petroliferos Fiscales de Bolivia (YPFB); and recognize the right of indigenous communities to decide about oil and gas projects in their territory. (ED, March 17)

On Mar. 17, after Congress rejected his proposal for early elections, Mesa announced that he would remain in his post for the remainder of his term, until August 2007. (ED, March 18)

Morales announced on March 19 that when the Senate convenes on March 22, hundreds of campesinos will start a vigil and pijcheo (ritual coca leaf chewing) outside the Senate building in La Paz to demand that the bill not be weakened. (Prensa Latina, March 20)

From Weekly News Update on the Americas, March 20

PREZ MANEUVERS, PROTESTS BUILD

In a 45-minute televised speech on March 6, President Mesa complained that constant protests, strikes and blockades were making Bolivia ungovernable and that he would offer his resignation to Congress the following day. Mesa harshly criticized campesino leader Evo Morales and his MAS for having announced the start of stepped-up roadblocks around the country. The protests, underway since the previous week, demanded that Congress pass a hydrocarbons law instating 50% royalties on private companies, and also that elections be called for a constitutional assembly. Mesa dismissed the constitutional assembly proposal, and said the royalty increase was "not viable" because "the international community is against it" and the country depends on "foreign handouts." (Clarin, Argentina, March 6; Agencia Latinoamericano de Informacion [ALAI], March 7)

Morales said that with the resignation threat, Mesa was "resorting to blackmail, maneuvering, insults and divisiveness, showing that he has a racial gripe against indigenous people and campesinos who are the majority of this country, just because we are struggling to recover the territory, to defend our national resources like water and to obtain 50% royalties from the oil companies." According to Bolivia's 2001 national census, 62% of Bolivians over 15 years old identify themselves as indigenous--31% Quechua, 25% Aymara and 6% from other ethnic groups. (ALAI, March 7, 9)

In his speech, Mesa also criticized Abel Mamani, leader of the Federation of Neighborhood Committees (FEJUVE) of the city of El Alto, for leading a movement which is demanding the departure of the Aguas del Illimani water company. Mesa said that if the government breaks its contract with Aguas del Illimani--a consortium partly owned by the French transnational Suez--then Bolivia would have to immediately pay $17 million to creditor organizations and might lose a $50 million lawsuit threatened by the company. Last Jan. 12, three days into a civic strike in El Alto organized by FEJUVE, the government signed a decree pledging to cancel the contract with Aguas del Illimani.

But since then the government had backtracked, and FEJUVE responded with a new civic strike beginning March 2 demanding the company's expulsion. The strike also included demands for the 50% gas royalties, the constitutional assembly and a full trial of ex-president Gonzalo Sanchez de Lozada and his cabinet members for an October 2003 massacre of protesters in El Alto. Mamani had announced plans to step up the protests on March 7 and had called a march to La Paz for March 8. (Clarin, March 6)

Mesa also criticized the civic and business leaders of gas-rich Santa Cruz department who have been pushing for regional autonomy. (El Diario, La Paz, March 7) Mesa's surprise resignation announcement came amid a flood of protests around the country, including El Alto and Cochabamba. In Sucre, Chuquisaca department, campesinos protested to demand the constitutional assembly be held before any referendum on regional autonomy; they were also demanding the trial of ex-president Sanchez de Lozada, and rejecting any immunity for US soldiers in Bolivia. (The US is pressuring Bolivia and many other countries to agree not to send any US soldiers to face charges before the International Criminal Court.)

In Santa Cruz department, residents of the city of Camiri blocked the highway to Yacuiba, on the Argentine border, in a protest demanding that their city be the headquarters for the state-owned oil company, YPFB, when it is reformed under the terms of a July 2004 referendum. In Yapacani, protesters demanded that oil-producing municipalities get 10% of oil royalties and non-oil-producing ones get 3%. In Pailon, residents blocked the highway to Trinidad to demand government attention to local needs.

Residents of Entre Rios demanded that 40% of Tarija department's oil royalties go to their municipality. In La Paz department, residents of Patacamaya demanded expansion of the local university, while Lahuachaca residents blockaded roads to demand the creation of a teacher training school. In Cochabamba department, residents of Ivigarzama blockaded roads over a border conflict with the neighboring municipality of Chimore. The Confederation of Bus Drivers postponed a 48-hour national strike demanding higher fares, saying their protest "would go unnoticed" amid so many others. (CEDIB, March 5)

Some protests were lifted on March 7 following Mesa's resignation announcement, including the week-old blockades in Chuquisaca department, which had cut off the city of Sucre from supplies, and in Yapacani. But many protests continued, and some were intensified or renewed, including a blockade which shut down the road between Santa Cruz and Cochabamba on March 7. Leaders of Bolivia's grassroots social movements ratified their protest plans and their unified demands at a meeting in El Alto on March 7. Oscar Olivera, president of the Coordinating Committee on Water, pointed out that the protests "did not demand and are not demanding the resignation of Carlos Mesa; in fact, their national demands, with the exception of [the departure of] Aguas del Illimani, are not even directed at the executive, but rather at the legislature." (La Razon, La Paz, March 8)

On March 8, Bolivia's Congress unanimously rejected Mesa's resignation and ratified his continuation as president for the term ending Aug. 6, 2007. A majority of deputies--not including those from the MAS or the MIP--then approved a vaguely-worded "national agenda," in which they committed the Congress and president to work together on the hydrocarbons law, regional autonomy and a constitutional assembly.

The agenda promises to "approve as quickly as possible a hydrocarbons law which respects the mandate of the July 18, 2004 referendum and within that framework guarantees the maximum benefit in favor of the Bolivian state, attention to the internal market, industrialization and the current and future export commitments of our hydrocarbons, preserving investments in strict respect and observance of national sovereignty." The agenda also pledges, "on the basis of regional consensus, to put forward a plan for approval of the legal instruments to guarantee the holding of elections for governor [a key demand of the autonomy movement], the referendum on departmental autonomy and the convoking of a constitutional assembly." Following the vote on the agenda, deputies from the MAS and MIP walked out in protest before Mesa addressed the Congress. (ED, March 9)

On Mar. 9 the Bolivian Workers Central (COB) joined with Bolivia's main campesino, indigenous and neighborhood organizations in a "Pact for the Defense of Dignity and National Sovereignty," pledging to step up the nationwide protests on their united demands. (ALAI, Econoticiasbolivia.com, March 9) The same day, Mesa apologized publicly for his harsh words against Evo Morales and asked Morales to meet with him. Morales said he would participate in a meeting if it included the rest of the union and grassroots leaders included in the new pact.

The two sides met for four hours on March 10, without reaching any agreements. Mesa tried to convince the protest leaders that his proposal for 18% royalties and 32% taxes will add up to the same as 50% in royalties. Opponents say the government will find a way to manipulate the taxes so they don't really add up to the full 50%, though Mesa promises the taxes will be charged on actual production, with no sneaky calculations involved. "The blockades are going to continue, they are going to radicalize until the parliament approves the 50% royalties," warned Morales. "We're not demanding exclusion, or confiscation, or expropriation of the transnationals' property. It's important to have partners, but those partners should put in half, 50 [for them], and 50 in royalties for the Bolivian state." (ED, March 10, 11)

Morales said the 50% royalties would produce an extra $550 million a year in tax revenue--enough to eliminate Bolivia's deficit. Mesa told foreign journalists on March 9 that the 50% royalty rate would invite massive lawsuits by foreign companies with gas contracts in Bolivia, but that his 32% tax and 18% royalty formula would bring "an explosion" of new investment, eliminating the country's need for foreign aid. However, some oil industry analysts say even Mesa's more moderate plan might provoke lawsuits by corporations because it would change their existing contracts. (Miami Herald, March 10)

Protests were back in force around the country on March 9. Members of Bolivia's Landless Movement (MST), the Coordinating Committee of Indigenous Peoples of Santa Cruz and the National Council of Qullasuyo [Aymara] Communities (Conamaq) arrived in La Paz after traveling from the country's lowlands and highlands, respectively, to demand the constitutional assembly and indigenous participation in democracy. They said they would not block roads, and were not part of the pact signed by the other social movements. The same day, chaos broke out in the city of Santa Cruz when bus drivers tried to raise fares to make up for fuel price increases and bus riders rebelled. Police used tear gas; at least 10 people were injured and 59 arrested. In Cochabamba, the road to Santa Cruz was completely blocked by protests organized by the Six Federations of the Tropics, an organization of campesino coca producers. The campesinos also set up vigils surrounding four oil wells, and campesino leader Feliciano Mamani said blockades were in effect on highways linking Cochabamba to Oruro and Chuquisaca. (ED, March 10)

On Mar. 10, marches called by President Mesa to oppose the grassroots roadblocks drew light crowds in Bolivia's major cities. The same day, the FEJUVE of El Alto called for a suspension of its blockades in the city, saying the people were "tired" and that new pressure tactics would be taken up the next week on the demands against Aguas del Illimani. (ED, March 11)

Mesa's resignation offer appeared to be aimed at dividing and weakening Bolivia's grassroots movements, both by exerting counter-pressure on Congress, which is leaning toward popular demands on the gas law, and by empowering certain sectors of the public to actively oppose the protests. "The gamble is to get the people who tolerated these protests in the past to go out and say they won't tolerate it," Jaime Aparicio, Bolivia's ambassador in Washington, said in a phone interview with the New York Times. "It may be effective, but we'll have to wait and see." (NYT, March 8)

Thousands of people did mobilize around the country in support of Mesa following his March 6 resignation announcement, and on March 7 dozens of counter-protesters waving white handkerchiefs broke windows at the FEJUVE offices in El Alto and tried to disrupt the meeting of grassroots leaders there. Mamani, the FEJUVE leader, said death threats were called in to his mobile phone. (LR, March 8) Bolivian media made much of the "white handkerchief" movement, citing counter-protesters' chants urging Mesa to take a "heavy hand" against protesters and to send "Evo and Mamani to the firing squad." (ALAI, March 9)

From Weekly News Update on the Americas, March 13

Weekly News Update on the Americas

For recent Bolivia coverage, see:

WW4 REPORT #107

WW4 REPORT #106

WW4 REPORT #104

WW4 REPORT #102

WW4 REPORT #101

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Reprinted by WORLD WAR 4 REPORT, April 10, 2005
Reprinting permissible with attribution

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