The 18th of December, 2005 Evo Morales became Bolivia's president. Since his appointment Evo Morales has taken some unpresedented decisions, defining the scope of his presidency. In an interview with The Fourth International Evo Morales outlined the aims of his administration quite clearly.
"We are staking our future on communitarian socialism, organised around the activity of peasant communities. Where does communism come from? Well, from communities! Where I lived there was no private property, it was an agricultural zone which belonged to the whole of the community. So we have to take over and strengthen these forms of organization, which are collective and based on solidarity, so as to better share out our riches, our wealth, in the whole of Bolivia."
Evo Morales has already taken steps to define his presidency and approach to governing Bolivia. The most significant decisions include cutting his salary by more than a half to a little over USD $1,800 (GBP £1,012) per month (followed by an annoucement his first cabinet would cut their salaries by 57%). Furthermore, Evo Morales has enacted a law calling for a referendum on greater regional autonomy, which will be held on 2nd July, 2006. The referendum is seen as a first move at drafting and enacting a new consititution for the country.
However the most significant decision of Evo Morales administration is related to the management of Bolivia's gas reserves. Bolivia's gas reserves of 48.7 trillion square feet (4.5 trillion sq metres) are second in the continent to Venezuela's 151 trillion square feet (14 trillion sq metres). Evo Morales position on the subject is clear stated "the free-market model does not work in Bolivia, and the partial privatisation of basic services and natural resources should be reversed".
During the past decade Bolivia has been involved in a “gas war”, which has been driven by a fightback against the exclusion of the majority of Bolivians from the country’s wealth generated from gas. Bolivia is the poorest country in Latin America, with two-thirds of its population living below the poverty line. The seeds of the "gas war" conflict were planted in 1990 when the International Monetary Fund and donor governments persuaded the Bolivian government to privatise its gas and oil sector and lower taxes, promising increased income as a result of additional foreign investment. In fact, government revenue fell – but the multinational energy firms raked in unprecedented profits, taking 58% of all the income from gas and oil in straight profits, making Bolivia one of the most lucrative operating countries in the world.
The Bolivian "gas war" caused the downfall of President Gonzalo Sanchez de Lozada. Lozada resigned in October 18th 2003 due to strikes and road blocks over the on-going privatization of gas resoruces. Lozada was forced to resign following the violent suppression by the Bolivian armed forces which left some 70 people dead. The protests where orginally sparked by plans to export gas to the US and Mexico, shipping the gas via a Chilean port - an outlet that used to be part of Bolivian territory until Chile seized Bolivia's coastline in their 1879-1883 war.
Evo Morales has added a new chapter to the Bolivian "gas war" by annoucing the official nationalisation of all gas fields in Bolivia. All forgein companies currently involved in the Bolivian gas industry are required to agree new contracts with the state-run firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), within 180 days. As part of the nationalisation program, Bolivia will keep up to 82% of their revenues, allowing them just the remaining 18%.
Evo Morales decision to nationalise the Bolivian gas industry was expected. However it is concerning Evo Morales decision will not only impact the United States and Europe but the countries part of the "South American nation" Evo Morales pledged to support as part of his signing of the The Bolivarian Alternative for the Americas. Read more about "The Bolivarian Alternative for the Americas" at Dark Matter Politics.
Petrobras, Brazil's leading oil company has invested more than $1bn in Bolivia and controls 45% of its gas production. This decision will mark a clear break between Mr Morales and Lula - jeopardizing the relationship between Bolivia and Brazil. This is a massive blow to Brazil's president who is facing re-election the 1st of October, 2006.
Now that Evo Morales has control over the gas fields he will require control over the distribution of these resources. This will lead to increased pressure by his administration on the Chilean government and international community (mainly the Organization of American States) to review Bolivia's access to the sea. Bolivia and Chile broke off full diplomatic ties in 1978 over the outcome of a land and sea war at the end of 1879, when Chile won mineral-rich coastal territory from Bolivia. Bolivia wants to negotiate sea access through northern Chile so that its natural resources and agricultural products can be sold to the booming markets of the Asia-Pacific region. But Chile has opposed ceding territory to Bolivia.
The political and economic animosity of Bolivians toward Chile should not be underestimated - it will impact any negotiations between both nations. Bolivia's only other alternative is to build a pipeline through Peru, however a basic knowledge of the regions geography indicates this would be an expensive undertaking. It is unlikely Chile will comprise its sovereignty over a "Sea for Gas" agreement proposed by many Bolivians (69% of Chilean respondents believe a solution should be taken without ceding territory). Furthermore, it is unlikely Evo Morales will cease in his pledge to return the sea to his Bolivian citizens.
Without a doubt Bolivia's "gas war" has now become a regional issue which could destabilise the political foundations of the South American region. The benefits of this much needed re-distribution of wealth within Bolivia will have to be judged not by economist or Evo Morales himself, but by the people of Bolivia. On the other hand, Evo Morales approach towards his regional counterparts including Brazil and Chile will determine the true extent of his ideals and drive for South American integration.