Special Hydrocarbons Nationalization Edition
Nationalization. What does it actually mean? The word was bandied about during the 2005 elections. Seemingly every candidate ran on some sort of platform advocating for the nationalization of Bolivia’s hydrocarbons, which currently stand at the second largest gas reserves in the region. The practice made sense since the majority of Bolivians in all nine departments overwhelmingly passed a 2004 Referendum (ES) pushing for the nationalization of these natural resources. However, there were debates as to what nationalizing actually entailed. The outright winner, Evo Morales, promised to push his own view of nationalization through sooner, rather than later.
For some, especially on the radical far left, this would be accomplished with nothing less than the expropriation of physical property without any form of indemnization. Others thought Morales would take a more pragmatic approach and work with the foreign companies to renegotiate the contracts. During his worldwide tour before taking office (aka the Sweater tour), he reassured the governments home to many of these companies, such as Brazil and Spain, that the process would be for the benefit of both sides. Time and time again, he would reiterate, “we (Bolivia) need partners, not masters.” All of this sought to reverse the partial privatization launched by then president Gonzalo Sanchez de Lozada in the mid 1990s.
One hundred days into the administration, some were wondering why the delay. There were some grumblings that if nationalization did not take place soon, the mobilizations that brought down two previous presidents would begin. Morales would remind his supporters that “it (nationalization) is not simple, it is not easy.”
On May 1, on the traditional workers’ day around the world, Morales did make it look simple. Signing the supreme decree 28701 (ES), he announced that the hydrocarbons had been nationalized. Fanfare included signs hanging from the different structures declaring his own “mission accomplished” with great banners simply reading “Nationalized”. At that moment, he announced that the Armed Forces had descended onto the different oil fields to enforce this new decree.
In the main plaza of La Paz, celebrations broke out as one of the campaign promises had been carried through. However, this goes back to the original question, what does this mean? The previously reassured countries, such as Spain and Brazil, were no longer reassured. Petrobras, Bolivia’s largest investor called this move very unfriendly and would investigate how it would respond.
Within moments that the press broke the story, the Bolivian blogosphere also responded, but it remained rather shocked at the manner and the timing. Much of the first entries were merely reporting what was being said in the national and international media and others said that they would reserve judgment until more information is released.
Sebastian Molina and his Plan B (ES) blog highlight some of the background material and that a television spot has been running on Bolivian television announcing the new changes, including a plea requesting the social sectors to “defend this patriotic measure that will be the base of national development.” One of the other websites he helps maintain Bolivia.Mundoalreves.com also serves as a good resources for Spanish-language articles, as well as what other non-Bolivian blogs are saying about this subject. Miguel Buitrago (MABB) also lists a wide variety of links from national and international media sources. Alvaro Ruiz Navajas’ Off Topic summarizes the immediate reactions from the opposition groups and social movements, which hold the same position in some cases.
Boli-Nica talks about a precedent for this nationalization and the country most affected, the United States, practically did nothing. The two previous nationalizations took place in the 1930s and at the beginning of the 1970s, at the hands of military governments, instead of the current civilian government.
Jonathan Olguin and his Journal of Bolivian Business and Politics nicely summarizes the different companies that are currently operating in the country. However, he also stated, “I’m concerned, this is nothing but the long needed and awaited contract-renegotiation under a populist guise”
Other bloggers were emotionally moved by this act. In his blog Así como me ves me tienes (ES) , Sergio Asturizaga, a Bolivian currently living in Brazil, the country which may bear much of the brunt of this decision said.
Soverignty. This is what Bolivians should have with our rich natural resources. Upon seeing the news, photos in the newspaper, I feel really happy because finally we can enjoy the fruits of our own natural resources.
He also wonders steps Brazil will take seeing that they still depend heavily on Bolivia’s gas for its industries.
The image also struck Rolando Lopez of Rocko Weblog:
A Bolivian flag flying high over the oil field “San Alberto” in Tarija, closely guarded by the military and a President reading the decree that finally nationalizes the hydrocarbons. Surely it will be an image that will become historic. At the same time, scenes reappear of the cruel annihilation of Bolivians and Paraguayans in the Chaco War, the first to defend the grand riches within the piece of jungle. Years later, the same annihilation among own enemies fighting for the same riches that the same treason took away from us.
Not everyone was pleased with the showmanship. Carlos Gustavo Machicado Salas indicated that he wasn’t sure what all of this meant, in a post in his blog Guccio’s, but wasn’t suprised by the action because it had been promised by this new government.
What was surprising was the manner in which the whole thing was conducted, with the mobilized army, giant banners, and other things that may not have been necessary. This arrogance could result in the other actors in this game (the companies) could act in the same way.
Javier Sandoval's entry was given the title “Evo Morales Ayma….a complete showman” and was meant in the negative sense of the word. His blog is called Javier Libro Abierto (ES).
Miguel Centellas of Ciao! links to a blog that introduces the concept and fully agrees that Bolivia is or is on its way to becoming a rentier state, which is defined as a state that uses its resources owned by the state for political gain. This does not bode well for the country because typically countries that operate as these states have poor economic track records.
What comes next? Few know what might follow, however, Briegel Busch, believes that many of the companies will take Bolivia to international arbitration, as stipulated in their contracts. He writes in his blog Bolivia Eclipse (ES) that he wonders whether the President and his advisors, during the excitement of announcing such a measure on such a symbolic date, overlooked the fact that the country relies heavily on international cooperation.
The reaction is mixed among the Bolivian blogosphere, but the many are celebrating this historic measure and others are reserving judgement until more information is released.
Finally, the name of the supreme decree is called Heroes of the Chaco in honor of the soldiers who perished in the Chaco War. Javier Rodriguez and his new blog Diario de Un Demente Frustrado (ES) colorfully describes the event. He draws attention to the speech given by the Vice-President, Alvaro Garcia Linera who said that the gas martyrs could now rest in piece that the country now is honoring that sacrifice.
Today there is no doubt that we are completely in a Revolution in every strict meaning of the word.