Bolivia now; who’s next?
Amid the heady talk coming out of South America over efforts by Bolivia’s president to nationalize the country’s oil and gas industry, there are at least some voices of sobriety-or so it seems.
Evo Morales announced his decree, which requires foreign investors to grant the state controlling interest in oil and gas assets within 180 days and up to 82% of all revenue, in a speech at a gas field in Tarija operated by Brazil’s Petrobras.
Earlier, during an Apr. 29 meeting in Havana with Cuba’s Fidel Castro and Venezuela’s Hugo Chavez, Morales described nationalizing natural resources as a “tool of liberation.” That caused some excitement and controversy.
The La Paz newspaper, the leading daily in Morales’s base of Cochabamba, said he had “surprised the country and the world” in an effort to boost his image, which recently “had taken a beating.”
Not everyone applauds Morales’s effort.
Brazil objects
Brazilian President Luiz Inacio Lula da Silva called an emergency cabinet meeting and was expected to telephone Morales to stress that Brazil considered as unacceptable anything that would jeopardize its $1.5 billion investment in Bolivia.
Brazil’s Mines and Energy Minister Silas Rondeau called Morales’s move a “breach” of bilateral understandings, while Petrobras Pres. Sergio Gabrielli said operations in Bolivia would be “unviable” under the terms of the decree.
As for the apparent voices of sobriety, consider Peru’s presidential hopeful Ollanta Humala, who went on record as distancing himself from the decision by Morales to nationalize Bolivia’s oil and gas resources.
To be sure, Humala has said his government-if he wins the upcoming election-would seek greater state intervention in Peru’s free-market economy and would require foreign mining and gas companies to renegotiate contracts and pay more taxes on profits.
But he declined to go down the road of nationalization that Morales has steered onto-he says now.
Crocodile rock
“We respect the sovereign decisions of our brother nation Bolivia, but what I want to say emphatically is this: We have never talked about either state takeovers or expropriation,” Humala said.
“Peru already lived through that experience in the 1970s in the last century, and it did not give us the results that were expected,” he said. “The state can participate in property (ownership) through shares,” he said.
Sounds good, doesn’t it?
But don’t forget that Humala has the backing of Chavez, who described him as the candidate of Peru’s downtrodden. Nor did the Venezuelan president hesitate to weigh in against Humala’s opponents.
Chavez characterized Humala’s electoral opponent, Alan Garcia, and incumbent President Alejandro Toledo as “crocodiles from the same watering hole.” What an absolutely scintillating metaphor!
Given such backing from the great South American populist, is it any surprise that Humala has been invited to Bolivia-at the suggestion of Chavez-to learn more about Morales’s efforts at nationalization?
So much for sobriety.