Bolivia: Gas Referendum in Doubt with Replacement of Hydrocarbons Minister

NotiSur - South American Political and Economic Affairs, March 26, 2004 | Go to article overview

Bolivia: Gas Referendum in Doubt with Replacement of Hydrocarbons Minister


Bolivia's Minister of Hydrocarbons and Mining Alvaro Rios has resigned and been replaced by an official from the first administration of former President Gonzalo Sanchez de Lozada (1993-1997, 2002-2003). Rios stepped down after legislators presented a demand for interpellation, or official questioning. The resignation throws the upcoming national referendum on hydrocarbons into doubt, complicating one of the most volatile issues in Bolivian national life.

Mass uprisings against plans to privatize the hydrocarbon industry and export gas to Mexico and the US through Chile led to the downfall of Sanchez de Lozada in October 2003 (see NotiSur, 2003-10-24). Human rights groups say that more than 70 died in the street battles prior to Sanchez de Lozada's exile. Leaders from the Movimiento al Socialismo (MAS), a party led by indigenous legislator Evo Morales, objected to the export scheme because of its planned passage through Chile, with whom Bolivia has not had diplomatic relations for decades. Bolivia lost its access to the Pacific Ocean in a war with Chile in the 1880s and has since sought periodically to regain ocean access (see NotiSur, 2004-01-23).

MAS opposition also focused on Sanchez de Lozada's neoliberal economic plans for Bolivia, which included privatization of national resources and the construction of a liquid natural gas (LNG) pipeline to the Pacific traveling through Chilean territory. The "gas war" put the Pacific LNG project on hold and Morales, who came in a close second in elections against Sanchez de Lozada in 2002, has sworn to impede any export of gas through Chile.

Former Sanchez de Lozada official takes post

President Carlos Mesa named Antonio Aranibar Quiroga to the mining and hydrocarbons post. Aranibar was the foreign minister in Sanchez de Lozada's first government. Mining unions opposed Aranibar's appointment, considering him one of the agents who led to the loss of the national-production apparatus and a face from the past who represented neoliberal policies to international governments. He is a former president of the Movimiento Bolivia Libre (MBL), and Mesa praised his human qualities as he presented him.

Alvaro Rios, who had held the post only since the October revolt, expressed his dissatisfaction with the interpellation presented against him. He said that the criticisms of legislators were for policies put in place by previous governments and that the political attack was "irrational." Politicians and social groups accused him of having ties to multinational companies and, despite his plans to augment taxes on the hydrocarbons sector, accused him of being soft on those companies.

New petroleum tax law postponed

The Hydrocarbons Law, whose objective is to bring more resources into Bolivia, was put together in January by Rios and discussed with petroleum companies, but the final draft is not yet ready for the National Congress to consider. Aranibar is leading the process of coordinating the various state and private interests that have a stake in it, but agreements may be difficult to come by and the timeline for agreements keeps being set further and further back.

Foreign petroleum companies from the US and Europe are quietly pressuring the Mesa government to mitigate demands for nationalizing petroleum fields that Sanchez de Lozada conceded to the transnationals. The proposed bill includes a "complementary fossil-fuel tax" with sights on obtaining as much as a 32% contribution from the country's oil production. This tax, added to other fiscal obligations (royalties on exports) of 18%, would push up to 50% the total that the national coffers would receive of the income generated by the exploitation of Bolivian petroleum and natural gas.

The decline in oil investment from US$680 million in 1998 to US$40 million in 2003 reflects the collapse of the national energy industry, says Carlos Alberto Lopez, an energy consultant and former deputy minister. …

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Bolivia: Gas Referendum in Doubt with Replacement of Hydrocarbons Minister
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