After sending soldiers to surround Bolivia’s gas fields, what’s next for Morales?
LA PAZ, Bolivia – Bolivia’s leftist government said Tuesday it would extend control over mining, forestry and other sectors of the economy after President Evo Morales nationalized the country’s huge natural gas industry. Foreign governments warned relations could be damaged.Soldiers were posted at 56 gas installations around the country a day after Morales issued a decree that analysts say could drive petroleum companies from South America’s poorest nation and isolate Bolivia from important allies like Brazil and Spain.The move solidifies Morales’ role alongside Venezuela’s Hugo Chavez and Cuba’s Fidel Castro in Latin America’s new axis of socialist-inclined leaders united against “capitalist, imperialist” U.S. influence.In Peru, Ollanta Humala, the nationalist presidential hopeful headed to a runoff election, has said he too would force foreign mining and gas companies to renegotiate contracts. But his vice presidential running-mate, Gonzalo Garcia, said Tuesday that Humala would take a less confrontational stance than Morales.Morales said Monday that the gas decree “was just the beginning, because tomorrow it will be the mines, the forest resources and the land.” Morales’ planning minister earlier this month spoke of plans for “drastic reforms” of mining laws.On Tuesday, Vice President Alvaro Garcia Linera said mining companies could face higher taxes and royalty payments and that the government will intensify enforcement of existing laws to break up big underdeveloped land holdings, apparently to turn them over to the poor.The government also will crack down on foreign timber companies violating conservation laws, Garcia said, and would steer companies to export finished wood products rather than raw timber.While the gas nationalization decree was not unexpected, analysts said the images of soldiers toting automatic weapons outside refineries and gas fields were reminiscent of military dictatorships past.”With this move, he risks alienating natural and otherwise sympathetic partners like Brazil and Spain,” said Michael Shifter, a Latin American analyst at the Inter-American Dialogue think tank in Washington. “Ordering the military to seize the natural gas fields is unnecessarily confrontational and antagonistic.”In an apparent attempt to explain the move to his neighbors, Morales will meet Thursday in the Argentine city of Puerto Iguazu with Argentine President Nestor Kirchner, Brazilian President Luiz Inacio Lula da Silva and possibly Venezuela’s Chavez.Brazil is the biggest buyer of Bolivian gas and the owner of Petroleo Brasileiro SA, one of Bolivia’s biggest gas producers.Petrobras President Sergio Gabrielli said officials were seeking “to secure our rights” to Bolivian gas and the $1.6 billion that Petrobras has invested in Bolivia since the mid-1990s.Spain’s Foreign Ministry summoned Bolivia’s business attache to express “deep concern about the measure and the possible consequences for bilateral relations.”The Spanish-Argentine Repsol YPF petroleum company is one of the largest foreign players in Bolivia and Argentina is the second-biggest market for Bolivian gas.Besides Petrobras and Repsol, the biggest natural gas investors in Bolivia are Britain’s BG Group PLC and BP PLC, France’s Total SA and U.S.-based Exxon Mobil Corp.Foreign companies extracting and exporting Bolivia’s gas have invested about $3.5 billion over the last decade, much of that to supply Brazil. But new investments have been largely frozen since last year over concerns about Morales’ nationalization plan.In Santa Cruz, Bolivia’s petroleum hub and the country’s financial center, business leaders called for a one-day general strike Thursday to protest the nationalization plan.The use of the military “was an excessive measure and a media show that sends negative signals to the international community,” said Gabriel Dabdoub, who heads the Santa Cruz Chamber of Commerce and Industry.Vail, Colorado
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