Friday, May 05, 2006

Bolivia Nationalizes Gas & Oil

The new president of Bolivia, Evo Morales, has nationalized the energy resources of Bolivia. This should make the international energy markets a bit more interesting.

Actually, I think this could be a good thing. Hopefully the instability in oil and gas prices will help spur the citizens of the world to get serious about adopting alternative energy measures and decreasing greenhouse gases.

Throughout the [election] campaign, Mr Morales...wanted to renegotiate foreign ownership of Bolivia's natural resources. This would not be appropriation, they said, it would not be nationalisation, it would be a renegotiation of existing contracts on terms that would provide a greater share of the revenues for the state.

Throughout the campaign, hydrocarbons were the most frequently mentioned natural resources. Bolivians have long been sensitive about foreigners exploiting their resources, and not without reason. First came the Spanish, to rid the country of its silver, starting at Potosí in 1545. By the 20th century, tin mining had taken over. Today, Bolivia has the second largest reserves of natural gas in Latin America after Venezuela; 45% of it is exported to Brazil at a low price. But in the late 1970s, faced with crippling debt, Bolivia began to place its public assets in private hands: the mines, the railways, electricity, water, the state airline, hydrocarbons all went through a process delicately termed "capitalisation" in order to avoid the word "privatisation".

But the economic rigour demanded by the neo-liberal orthodoxy failed to produce the expected results. Poverty remained rampant, as did political instability....

For the US it could mark the fulfilment of another of Mr Morales' pledges, to be "Washington's worst nightmare". After a lot of bellicose comment during the campaign, the Bush administration has adopted an unexpectedly conciliatory tone....

"It's going to be difficult for the Republicans to resist saying, what are we going to do now? The commies are running amok in Latin America. But the truth now is that the US has run out of options. There's not much [the US] can do, short of killing the leaders."|Guardian (emphasis added)|

I hope the Bushies don't try to pull a Salvador Allende on Evo Morales. I think the fact that there are now several socialist leaders in Latin America makes the option of force less useful. Killing the president of Bolivia would anger the presidents of Brazil and Venezuela and vice versa.

Hopefully the Bushies have enough contact with reality to realize this.

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