More than a week after the announcement of the nationalization of the energy company, Transportadora de Eletricidade (TDE), the Bolivian government said it reached an agreement about a fair compensation to the Spanish company, Rede Elétrica (REE), responsible for TDE. The matter will still be submitted, however, to a series of assessments.

 

Last week, Bolivian President, Evo Morales, met with the representative of the Ministry of Foreign Affairs from Spain, Jesus Manuel Gracia, to negotiate the agreement. Talks between the Bolivian authorities, Spanish entrepreneurs and representatives lasted three days.

 

Morales decision to nationalize the electricity company surprised the Spaniards, who threatened to retaliate against the measure. In the last days however, the Bolivian foreign minister tried to minimize the tension.

 

On Feb. 1, Morales announced the nationalization of TDE. He said the decision was made due to low investment in the expansion of the National Interconnected System (SIN) of the energy supply in the country, and because it is government policy to recover the strategic enterprises that were privatized in the 1990s.

Bolivian President, Evo Morales, has intensified his campaign against new indigenous protests that are heading for La Paz. The purpose of the mobilizations is, once again, demonstrate dissatisfaction with the decision of the Bolivian government to build a road on the Indian Territory Isiboro Secure National Park (Tipnis), which is an indigenous nature reserve. Trying to win support from public opinion, Morales flew along with the local and foreign journalists over Tipnis, showing the benefits of the work on this ecological reserve. The road that the government intends to build on Tipnis is designed to unite the central region of Cochabamba with the Amazon region of Beni, through half of the Tipnis population, rejects the proposal.
To resolve this impasse, Morales is in holding a referendum to be held on May 10. The vote will decide whether the indigenous will approve or not the construction of the road on Tipnis. Despite the initiatives of the Bolivian president to keep dialogue channels open and consult his primary voter base – the indigenous movement – there is strong resistances to approve the project driven by the executive branch.

 

 

The Bolivian President Evo Morales said that his followers must be convinced that “they came to power forever.” The demonstration took place during the inauguration of the eighth congress of his party, founded 17 years ago.

 

Speaking to the militants of the Movement Toward Socialism (MAS), his political party, Morales said that “anti-imperialist, anti-capitalist, anti-neoliberal reached the Palace not as tenants, but forever. According to the Bolivian president, this issue should be discussed by MAS.

 

As a way of trying to strengthen the internal unity in the party, Evo Morales said that the capitalist model is in crisis and is not a solution to the problems of humanity.

 

Morales won the first term in 2006 and was reelected president in 2010. The second government of indigenous leader runs until 2015, when he plans to run for a third term, which would last until the year 2020.

 

The Bolivian president has assured that he is entitled to another term as president with the argument that his first term does not count because it was not yet in force when the new Constitution was promulgated in 2009.

Bolivia lives a scenario of tension with the U.S.. The President Evo Morales last month expelled the American ambassador in La Paz, Philip Goldberg, and the end of last week suspended the operations of the U.S. Department of Drugs (DEA). In both cases, alleged political interference in favor of their opponents. 

Barack Obama will have a big challenge in Bolivia. Even promissing to seek dialogue with the region, Morales will use nationalist sentiment as a way to promote social movements that support him politically. It is still uncertain as is the relationship between the two nations.

His influence on social movements and the power of his government give Evo Morales a competitive edge over the opposition in the run-up to the referendum. Unlike a few months ago, the Bolivian Chief of State has never been so close to “re-founding” his nation.

 

Domestically, the opposition is expected to become more isolated. The Podemos, the main opposition party, may have led the agreement, but some regional leaders are angry. Thus, it is still unknown how opposition departments will react. There could be a truce until the vote, but after that there’s no way of projecting what can occur.

 

When trying to prevent an opposition split-up, the Mayor of Santa Cruz, Rubén Costas, said that this is the moment for a broad front to unite and challenge the government. But the Mayor of Beni, Ernesto Suárez, believes that the subject of autonomy was treated in the agreement in a way that betrayed the regions.

After many deadlocks, government and opposition have reached an agreement on the new Constitution. A referendum has been scheduled for 25 January 2009. If the new Magna Carta is approved, general elections will be advanced to December next year. Key to this difficult negotiation was President Evo Morales’s commitment not to run for yet another term if he is re-elected in 2009. With the agreement, Morales will leave office after finishing a new five-year term.

 

From now on, Evo Morales will be closer to the so-called “Bolivian re-foundation”, his main campaign promise. If the new constitution is approved, the economy will see greater State intervention, and also more rights to Indigenous peoples. Also foreseen are concessions for regions governed by the opposition (Santa Cruz, Tarija, Beni and Chuquiasca).

 

These are the main changes in the new Constitution:

Re-election: The new Magna Carta provides for the possibility of immediate re-election just once.

Autonomy: Three government tiers will be instituted – departmental, municipal and indigenous. Army, police, central bank and foreign policy continue in the hands of the central government. Other responsibilities will be devolved gradually.

Rangelands: Big land owners will have to prove the “economic and social” utility of their land. Before that, all rangelands areas would have been nationalized. The January vote will set out a 5,000 or 10,000 hectare limit for unproductive land. 

The executive branch of Bolivia thinks oil companies are not necessary in the country if they do not want to abide by their investment commitments. The statement was made by the Minister of Hydrocarbons and Energy, Saúl Ávalos, in an interview given to broadcasting company Erbol. He recalled that now in Bolivia all commitments are to be fulfilled.

 

Ávalos said that if the companies refuse to implement their investments – US$ 900 millions for this year alone – the State will intervene to verify whether investments in the oil industry are in keeping with its projects.

 

The threat issued by the Ministry lands in an environment of fuel shortage affecting some regions in the country, a situation that has been caused by declining investments in the oil industry.

 

 On the other hand, oil companies justify lesser financial investments due to the country’s political instability in recent years, tax reforms and the nationalization carried out in mid 2006.

After several standoffs between government and opposition over the new constitution referendum, Bolivian political parties decided to form a committee to discuss and attempt to weave a consensus. The committee was announced by Bolivia’s vice-president, Álvaro García Linera. As a result, the congressional session scheduled for last Friday in which the referendum call would be voted was adjourned.

 

Both the chairman of the senate, Óscar Ortiz, and of the house of representatives, Edmundo Novillo, attended the meeting at which this consensus was formed. Both sides are to work relentlessly to attempt to break the many standoffs created in recent months.

 

Negotiations will be reviewed at every 48 hours by representatives of both sides in order to avoid recurring issues. According to Mr. Linera, the time has come for the political forces to take an accountable stance and debate their way out of the institutional crisis.

 

The committee will be comprised by the Movement for Socialism (MAS), the Social and Democratic Power (Podemos), the National Revolutionary Movement (MNR) and the National Union (UN).

 

The launch of this committee is a key initiative of Evo Morales’ government. However, the Bolivian leader has failed to demonstrate the political ability necessary to bring the crisis to an end.

 

Compared to the government’s stance in past negotiations, this new initiative amounts to retreat. The million dollar question is knowing whether social movements that have backed up Morales will continue to rally in support or if there will remain a pressure for the approval of the new constitution. 

The governors of Santa Cruz, Tarija, Beni and Chuquiasca decided to “temporarily” suspend dialogue with the government. They accused Evo Morales’ allies of not committing to the foundations of the negotiation process and of “hunting” citizens and leaders in their departments.

 

The announcement was made by the governor of Tarija, Mario Cossío. He demanded that Morales intervene and said that the future of the negotiations is “in his hands”. The opposition reacted because of the arrest of a citizen in Tarija. He was accused of taking part in attacks against pipelines and refineries.

 

The opposition believes that the arrest made by the Government Ministry represents a violation of constitutional rights. Cossío also mentioned that the government has not halted the blockades to Santa Cruz and has kept a media campaign in favour of the new Constitution.

 

This new impasse is not really new. As the conflict between government and opposition has very deep historical roots, the institutional crisis tends to continue. Up until now, because of the radical attitude by social movements supporting the Bolivian president, the Executive is unable to conduct the negotiations.

 

In addition, the opposition is accumulating more and more power, as it is concentrated in the richest departments. Also, the Bolivian Confederation of Private Entrepreneurs (CEPB), the nation’s biggest entrepreneurial organization, has spoken in public against the new Magna Carta. 

The US House of Representatives approved the extension of the Andean Trade Promotion and Drug Eradication Act (ATPDEA) to Colombia, Ecuador, Peru and Bolivia, despite demands by President George W. Bush that benefits to Bolivians be suspended.

 

The ATPDEA allows tax-free Bolivian exports into the US market. It is part of American incentives aimed at Andean nations cooperating in the war on drug trafficking.

 

Bush’s request to exclude any benefits to Bolivia came as a response to the expulsion of the US ambassador to La Paz, Philip Goldberg, at the summit of the institutional crisis, three weeks ago.

 

According to the local press, the benefits will be suspended regardless of the House approval. Sources from the US Embassy in La Paz said that the situation will not change unless the US president issues a resolution to the contrary. Faced with this imminent loss of economic benefits, the government headed by Evo Morales will probably intensify dialogue with Venezuela, Mexico and Brazil, which are all potential markets in the region. 

 
Welcome! Latin America is becoming consistently more important for the world. As the region becomes more stable, the world sees Latin America as a potential business area. In order to understand te potential Latin America has to offer, the world must understand the unique dynamics that the local politics function. This blog already exists in Portuguese since 2005 and is widely read. I believe it can be an important instrument to understand this amazing region. Suggestions, criticisms and opinions are welcome. + learn more

RSS feeds

Podcasts

Popular categories

Keywords

collaborators