Exit Polls: Bolivians Want to Export Gas (Latin America Leftist Alert!)

LA PAZ, Bolivia - The fate of Bolivia's immense natural gas reserves were at stake Sunday as voters decided whether to allow exports and increase government participation in a referendum aimed at healing social unrest threatening to fracture South America's poorest country.

Exit polls by television stations Unitel and ATB reported that between 56 to 63 percent of voters said gas should be exported. The issue is a sensitive one in Bolivia. Nine months ago, then-President Gonzalo Sanchez de Lozada was ousted for planning to export liquefied natural gas to Mexico and California. Clashes between highland Indians and security forces in and around La Paz left nearly 60 dead.

Although Indian leaders had threatened to burn down polling stations Sunday, there were only minor incidents of violence.

Police were investigating a dynamite explosion in the otherwise calm town of Achacachi, 40 miles northwest of La Paz.

Dozens of townspeople, including Indian women in felt bowler hats, sweaters and layered skirts, also threw rocks at a team of election observers from the Organization of American States. The team, part of 22 OAS observers sent to Bolivia, was trying to visit a polling station in the city of El Alto, a flash point of unrest in October.

President Carlos Mesa, formerly the vice president, offered to hold the referendum immediately after taking over to finish Sanchez de Lozada's term, scheduled to end in 2007.

"Whether people vote yes or no, this vote will win," he said. "We are creating peace today."

Valued at more than $70 billion, the gas fields in this landlocked country are the second largest on the continent, behind those in Venezuela.

Lured by privatization of the industry, some 20 foreign companies have invested $3.5 billion in exploration, discovering 55 trillion cubic feet of gas.

But some Bolivians remained wary of the vote and pledges that the exploitation of natural gas will raise incomes in a nation where two-thirds of the population live in poverty.

"I don't think this is going to improve the situation," said Patricia Mamani, a 28-year-old street vendor in the capital. "There have been so many promises, and the government always does what it wants."

The gas reserves have split the nation, with Indians in the western Andean plains pitted against the business elite in the eastern and southern lowlands, where the gas reserves are located.

The business leaders are set on exportation and have threatened to break away from the republic.

Indian leaders in the west want the entire gas industry nationalized to ensure profits stay in the country, an option Mesa left off the ballot.

"It's a trick," Indian leader Roberto de la Cruz said at a polling station in El Alto before voiding his ballot.

Despite opposition, Mesa has so far managed to hold the nation together as a straight-talking political outsider. But some fear Sunday's results could pull down the former television journalist's 70 percent approval ratings.

The ballot asked Bolivians if gas should be exported, if the government should recover ownership of all hydrocarbon reserves and re-establish the state-run oil company to work with multinational petroleum companies, and if Bolivia should use the gas to negotiate access to the pacific coast lost during Bolivia's 1879-84 war with Chile.

It also asked if a hydrocarbons law signed by Sanchez de Lozada that promoted the privatization and exploitation of Bolivia's gas and attracted foreign investment, should be repealed.

What is not quite clear from the article is that gas is already being exported via a 2000 kilometer pipeline to Brazil. This is what put Bolivia on the map. Aside from natural gas, Bolivia has only tin and coca for its national income.

This has done a lot for the country, and the government's portion of the project is owned by Bolivia's pensions.

But Brasil has been in a recession, and anyway wants to encourage gas development in her own fields, and isn't taking all the gas she originally contracted for. This has hurt the Bolivian economy.

The answer, for Bolivia, to free herself of Brazil's business cycle, is to tie into the world business cycle. But to do that, they need to push a pipeline west to the sea.

When the previous government approved that project, the farmers groups, led by Evo Morales, provoked an uprising that eventually led to the downfall of the president. In the midst of the uprising, Morales met with Chavez of Venezuela, who encouraged him to stay the course.

There is something grotesque about the continents leading oil producer telling the continent's poorest country to stay out of the hydrocarbons business for their own good.

Morales and his flacks and the Euro NGOs that advise them have been telling the Bolivians that gas is alien to their culture and will enslave them. Coca, they say, is authentically Bolivian and they should look to coca for their future. It is not surprising that some rather simple farmers might be encouraged to believe such a thing but it is impossible to believe that the Euro advisors would say such a thing with a straight face, but this is what they are telling the Bolivians.

Pipelines are under attack everywhere except in OPEC nations. Exactly the same thing happened in Ecuador as the NGOs encouraged tribal uprisings to stop construction of a new transandean oil pipeline. They have done everything possible to encourage the tribes to shut off oil development in tribal lands. The effect of this, of course, is to preserve OPEC's dominant position in the oil business. You won't see Euro NGOs organizing anti-pipeline uprisings in any OPEC nation, and I am suspicious that a study of their funding sources would explain why.

Peru just finished its transandean gas pipeline. That gas is headed for a soon-to-be-built LNG plant just south of San Diego on the Mexican side of the border. If Bolivia wants to bow out of the gas business, I'm sure Peru and OPEC will thank them.

As for the Indians, of course, they are so easily manipulated that they represent the secret weapon of the left

True. The coup against Mahuad in Ecuador was a conspiracy involving a few military officers who were receiving stipends from Chavez in Venezuela, and the primary indian tribal organization CONAIE. The tribes, in effect, provided the muscle.

This was the case throughout Mahuad's presidency. He came into office promising to turn the country around, to get the andean pipeline built, to pull the country back from collapse (since no one in the government had been paid in months, neither soldiers nor cops nor school teachers, you could say it had already collapsed). Forces in the country opposed to this would not face him openly but started from the first week of his presidency to try and force him from office.

This meant, primarily, organizing tribal strikes, university strikes, workers strikes, and so forth. Hardly a week went by without some kind of national strike. Finally, the officers arranged to step aside during one of the endless uprisings and the tribes entered the presidential palace. Mahaud had only seconds to escape. His successor, though, faced with the realities of the real world, continued Mahuad's policies. And the next president after that, one of the ex-golpistas aligned with CONAIE, has also continued Mahuad's policies, which were to build the pipeline (its finished now), dollarize the economy (that was the step that provoked the final coup, but no one wants to go back to the eternally collapsing sucre except the people who made money from it).

During one of the uprisings against dollarization, I talked to some of the folks about it. They had been told by their leaders that the dollar would enslave them. Sound familiar?

Actually, the reverse was true. The upper class was already dollarized. The nicer houses were bought and sold in dollars, major contracts were written in dollars, upper class professionals were paid salaries denominated in dollars. It was only the working stiffs who were tied to the sucre, whose salaries lost ground every week. This was great for the contractors, who were paid in dollars and in turn paid their people in shrinking sucres.

Mahuad ended that con game once and for all, and the people who made money on it came after him. But they couldn't do it directly, so they used the tribes. But now that the sucre is gone, and everyone is on the dollar, no one wants to go back. Obviously. The tribes and enviros and NGOs (and Chavez) fought with everything they had to stop the pipeline, but despite overthrowing Mahuad the pipeline was built, because there was no hope for the country without it. President Gutierrez, who oversaw the completion of the line, was one of the officers who overthrew Mahuad in an effort to stop the pipeline.

Some of the complaints of the tribes are legitimate. They do not share in the wealth that is under their land. I have talked to people about this, and in latin american countries no one believes in local control of resources. The idea of the landowner having ownership of subsoil resources is alien to them. And the idea of local government having direct taxation authority, of not receiving every dollar from the central government but rather having the right to raise their own tax revenue, that is also alien.

They will tell you that, this if fine for rich countries like the US, but it won't work here. Which means that the provinces and the tribes have very little incentive to allow drilling. This is a legitimate area for NGOs to help the tribes. But the leftist presumptions of the NGOs and the tribal leadership means that everything is an all or nothing battle to the end (and, anyway, the left doesn't believe in local or private ownership of subsoil resources either). Their intent is not to solve an issue but to take control of the country, even at the risk of splitting it up. Because the oil companies have no qualms about negotiating directly with the tribes to give them what they want. But that goes againsts the NGO's purposes, and they will fight it tooth and nail.

Thats what we did, and thats how we got our work done with minimal trouble; we were "pro-active" with some NGOs, bypassed others, bypassed the national tribal organizations and worked directly with the tribes themselves. CONAIE and the NGOs have sworn never to let that happen again.

The transandean pipeline did not learn from our example, and ignored the politics, and paid a heavy price. But its done now.

The euro NGOs will say that Ecuador should focus on non-oil businesses, but the primary non-oil business in the country besides bananas is shrimp farming. The EU has locked Ecuadorian bananas out, and the Greens have gone to court repeatedly to shut down the Ecuadorian shrimp farms. So there you are. You could say with complete honesty that the effects of NGO policies would be to lock Ecuador into an agricultural economy, and to lock the tribes into a stone age existence. Anyone who thinks they want that doesn't know them and hasn't talked to any of them.

(Actually, there are some tribes that are still stone-age, and all you can do for them is create a preserve. But the amazonian quichuas, in particular, are not primitive at all, they are more akin to homesteaders, and despite what their leadership says, they very much want roads, jobs, schools, and so on. We made it a point to monitor their radio communications, and we had people assigned to work directly with them, and learned a lot about their opinions and attitudes. And, hey, much of our work force was drawn from among the tribes.)

Any of us could make a short list of things to do to turn the economy around in a country like Ecuador, or Bolivia, and I assure you that having done so you would be attacked through the courts, through street uprisings, and even violently by forces that won't show their faces, but send tribes and college kids out to do their dirty work.

and in latin american countries no one believes in local control of resources. The idea of the landowner having ownership of subsoil resources is alien to them.

Few Americans realize how different the LatAm concept of this is from ours, and also how vastly centralized they are. It is a key problem in the development of their economies, but it would be virtually impossible to give them that concept of ownership and local control without restructuring everything from the start. Still, bit by bit, it probably could be done - but as you point out, it would bring down the wrath of the left on whoever tried to do it.

For a while, one of the big industries of Ecuador seems to have been lawsuits against US chemical and petroleum companies for pollution of the shrimping waters with run-off from the banana plantations or other sources. I was never sure whether these lawsuits were motivated by simple lawyerly greed or whether there was an environmentalist group behind them. And I couldn't tell which industry they wanted to shut down: the banana industry or the shrimp farming industry. It seems that any profitable economic industry is a Bad Thing down there.

Interesting that you should mention the students. I was always fascinated by the fact in that the accounts given to Colombian legal authorites by victims of FARC extortion, who were usually rather humble people running market stalls selling consumer goods or engaging in other such evil capitalist activities, the enforcers who came to collect the "revolutionary tax" and issue threats were virtually always described as "young and educated." In other words, probably students from the upper and middle classes, engaging in their thuggish revolutionary behavior with people who, in theory, the "revolution" should have been interested in helping. But all revolutionaries fundamentally hate success; only a miserable and hopeless people can be dominated as the "revolutionaries" wish to dominate them.

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