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Bolivia leader plans company takeovers

Dan Grech May 2, 2008

Bolivia leader plans company takeovers

Dan Grech May 2, 2008


KAI RYSSDAL: Bolivian President Evo Morales has made no secret of the fact that he’s a fan of Venezuela’s Hugo Chavez. The two have done trade deals and compared notes about their left-leaning political agendas. Morales has also stolen some pages from his counterpart’s domestic playbook. He said yesterday he’s going to nationalize Bolivia’s biggest telecommunications company and four foreign-owned natural gas companies. The timing’s no coincidence. Morales is trying to consolidate his economic base ahead of a provincial vote this weekend.

From the Americas Desk at WLRN, Marketplace’s Dan Grech reports.

DAN GRECH: Santa Cruz is the wealthiest province in Bolivia, South America’s poorest country. That’s because Santa Cruz sits on huge natural gas reserves. Tax revenue from the province makes up 40 percent of Bolivia’s national budget.

This Sunday, Santa Cruz holds a referendum that would give it greater autonomy from the central government. Autonomy would mean the province could keep some tax revenue from energy firms operating inside its borders, as well elect its own governor, and create a police force. Three other provinces, including the gas-rich Tarija, are planning similar votes in June.

Professor Deborah Yashar with Princeton University says Santa Cruz is setting a dangerous precedent for Latin America.

DEBORAH YASHAR: You can imagine that if all regions that were the engines of growth tried to engage in autonomy, increasingly you would have decentralized situations where some regions were extremely productive and others were left to flounder. This is not a way to sustain a stable economy.

President Morales wants to redistribute wealth from the gas-rich eastern lowlands to the indigenous people in the west. And Santa Cruz wants no part of it.

Andres Oppenheimer is author of “Saving the Americas:”

ANDRES OPPENHEIMER: This is a combination of rich people who don’t like Evo Morales’ socialist, radical-leftist Indian revolution and working people who are very worried about a centralized country which they don’t feel part of.

Sunday’s referendum lays bare Bolivia’s ideological, ethnic and class divides. Manuel Rocha is former U.S. ambassador to Bolivia.

MANUEL ROCHA: Bolivia is a fiction. It is two people that cannot divorce, but have stopped sleeping in the same room for a long time.

The Morales government has said it won’t recognize the results of Sunday’s vote. That sets the stage for street protests, political gridlock and possibly violence. Meanwhile, foreign energy firms are sitting out the fight.
Investment in oil and gas last year hit an 11-year low.

I’m Dan Grech for Marketplace.

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