|  |
| |
| |||||||||
 | | ||||||||||||
|
| | |||||||||||
| | | |||||||||||
| | > watch episode one | | > watch episode two | | > watch episode three | | ||||||
| | | |||||||||||
| | | | | | | | ||||||
| | A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack …. The year is 1914. Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world’s economic order. Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek. But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler’s Third Reich but Stalin’s Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether. For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights. But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer’s daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world. | | As the 1980s begin and the Cold War grinds on, the existing world order appears firmly in place. Yet beneath the surface powerful currents are carving away at the economic foundations. Western democracies still struggle with deficits and inflation, while communism hides the failure of its command economy behind a facade of military might. In Latin America populist dictators strive to thwart foreign economic exploitation, piling up debt and igniting hyperinflation in the process. In India and Africa bureaucracies established to end poverty through scientific planning spawn black markets and corruption and stifle enterprise. Worldwide, the strategies of government planning are failing to produce their intended results. From Bolivia and Peru to Poland and Russia, the free-market policies of Thatcher and Reagan are looked to as a possible blueprint for escape. One by one, economies in crisis adopt “shock therapy” — a rapid conversion to free-market capitalism. As the command economies totter and collapse, privatization transfers economic power back into entrepreneurial hands, and whole societies go through wrenching change. For some the demands and opportunities of the market provide a longed for liberation. Others, lacking the means to adapt, see their security and livelihood swept away. In this new capitalist revolution enlightened enterprise and cynical exploitation thrive alike. The sum total of global wealth expands, but its unequal distribution increases, too, and economic regeneration exacts a high human price. | | With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world’s investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor. But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies. When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders’ game played at outsiders’ expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules. Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world. | | ||||||
Month: May 2006
-
-
Step 1 in Bolivian Takeover: Audit of Foreign Companies
SANTA CRUZ, Bolivia, May 3 — Bolivian authorities said Wednesday that they planned to scour the financial records of foreign energy companies and they threatened explicitly for the first time to seize company assets if new contracts giving the state greater control could not be negotiated.
Skip to next paragraph
Noah Friedman-Rudovsky for The New York Times
Bolivian troops are guarding the properties of foreign energy companies. They searched cars Wednesday at the Transredes offices in Santa Cruz.
Noah Friedman-Rudovsky for The New York Times
The guards at the company’s offices made sure that no crucial documents were removed.
The New York Times
Santa Cruz is the site of a refinery and a center of the energy sector.
Wearing a hard hat and flanked by uniformed police officers, Andrés Soliz Rada, the energy minister, reiterated that multinational companies had six months to negotiate new contracts, many of which are likely to vastly increase the state’s take.
“If the negotiations do not go well, we could go to the next step, expropriation,” he said, adding that the companies would be compensated. But the first step, he said, is an audit of foreign company documents. “It’s time to open the black boxes of the petroleum companies.”
Mr. Soliz Rada held his news conference at a refinery run by Petrobras of Brazil, the company with the most to lose in Bolivia. Here, as at other private oil installations, military police guarded the entrances, searching cars to make sure no documents were being removed.
Bolivian officials said the briefing was intended to reassure foreign multinationals here, but it seemed to have the opposite effect, and the message was unmistakable: the government is now in charge, and the companies can take it or leave it.
Venezuela’s president, Hugo Chávez, who dreams of uniting Latin America as a buffer to United States influence, arrived in La Paz on Wednesday night and congratulated Bolivia’s new president, Evo Morales, on the nationalization.
As a first step, auditors from Petróleos de Venezuela, that nation’s oil giant, visited three foreign companies in Bolivia and announced that they would be involved in the audits, an executive of one company said.
The Venezuelan company is also providing technical help to Bolivian authorities and is to sign a contract to build a gas separation plant.
Bolivian authorities seemed to underestimate the impact of the steps that Mr. Morales announced Monday, on their own government and on foreign companies, particularly for an impoverished country of just nine million people that is still far from being the energy giant it wishes to be.
Bolivia may have Latin America’s second-largest gas reserves, but much of its riches are far from being developed. The landlocked country also has limited sales outlets.
It is a far cry from Venezuela, a major oil producer that has squeezed companies at will, with little chance that they will leave because of the huge profits to be made there.
“It’s one thing to produce petroleum at $72 a barrel and have access to many markets, and it’s another thing to produce gas that has only one market in the region, Brazil,” said Carlos Alberto López, a consultant for foreign oil companies.
The decree puts the Bolivian government’s energy firm, Yacimientos Petrolíferos Fiscales Bolivianos, better known as Y.P.F.B., front and center. Instead of a small auditing firm, Yacimientos would, under Mr. Morales’s decree, become an equal partner with giants like Repsol YPF S.A. of Spain and Total of France.
In an interview, Jorge Alvarado, the president of the Bolivian company, who stood beside Mr. Soliz Rada at the news conference, admitted Yacimientos had no money. Asked how it would develop the country’s gas fields if foreign investment evaporated, Mr. Alvarado said he was certain that foreign companies remained eager to continue in Bolivia.
“I want to be sincere,” he said. “Y.P.F.B., because of the neoliberal model, has been reduced to a minimum. It has no economic resources. But we see that there is much interest by foreign companies that want to invest in the country.”
Foreign companies, though, expressed increasing indignation.
Spain’s prime minister, José Luis Zapatero, said the move could affect the amount of assistance Madrid provided to Bolivia, Agence France-Presse reported, and he is sending a delegation to La Paz to meet with officials.
Energy companies are considering international arbitration or court fights.
The Bolivian Chamber of Hydrocarbons, which represents the companies, said the decree could change the terrain for foreign companies for the worse. The chamber expressed concern that Bolivia was veering away from emphasizing the importance of contracts and investments.
“It is the point of view of the chamber that the companies will not have the incentive to continue developing hydrocarbons,” Enrique Menacho, the chamber’s president, said in an interview.
Petrobras, in a letter from its director in Bolivia to Mr. Alvarado, said that while the company would continue operating in Bolivia, it was worried about the decree, and he hinted that the company could take legal action to protect its investments.
Under the decree, the state would be entitled to 82 percent of production in the biggest fields, up from the less than 18 percent the companies first agreed to when they began developing the fields.
Yacimientos also would take a majority stake in three companies — Chaco, Andina and Transredes — that once were state-owned but are now run by foreign companies.
Petrobras also appears to be losing control of two refineries, including the one where the briefing was held.
On Thursday, Mr. Morales and Mr. Chávez are to travel together to Argentina and meet with President Luiz Inácio Lula da Silva of Brazil and President Nestór Kirchner of Argentina.
At the briefing, Mr. Alvarado and Mr. Soliz Rada offered assurances that current contracts with the state still enjoyed legal security. But at the same time, they highlighted the new measures as a sign of dignity and sovereignty, and complained about the lack of Bolivian employees at foreign companies.
“Give me the names of Bolivians in Transredes, in Chaco, in Andina,” said Mr. Soliz Rada.
Bolivian officials also contend that foreign oil companies, which have invested upwards of $4 billion since 1997, have recovered their money.
It is an assertion that the companies deny. The Margarita field, for instance, operated by Repsol of Spain with its British partners, cost more than $300 million to develop.
“You’re just now going on market,” said one foreign executive here who has worked on the project, asking that his name not be used for fear that his relationship with the government would be damaged. “How can you say that the consortium has recovered their investment in Bolivia?”
——————————————————————–
——————————————————————–
-
Jeffrey Sachs
From Wikipedia, the free encyclopedia
Jeffrey Sachs
Jeffrey David Sachs (born November 5, 1954 in Detroit, Michigan) is an American economist known for his work as an economic advisor to governments in Latin America, Eastern Europe, the former Soviet Union, Asia, and Africa. He is currently a professor at Columbia University. He proposed shock therapy (though he himself hates the term) as a solution to the economic crises of Bolivia, Poland, and Russia. He is also known for his work with international agencies on problems of poverty reduction, debt cancellation, and disease control—especially HIV/AIDS, for the developing world.
Sachs’ research interests include the links of health and development, economic geography, globalization, transitions to market economies, international financial markets, international macroeconomic policy coordination, emerging markets, economic development and growth, global competitiveness, and macroeconomic policies in developing and developed countries.
Sachs received his B.A., summa cum laude, from Harvard University in 1976, and his M.A. and Ph.D. from Harvard in 1978 and 1980 respectively. He holds honorary degrees from several institutions, including Simon Fraser University.
Before coming to Columbia University in July 2002, Sachs spent over 20 years at Harvard University. He joined the Harvard faculty as an Assistant Professor in 1980, and was promoted to Associate Professor in 1982 and Full Professor in 1983, eventually becoming Galen L. Stone Professor of International Trade.
Since 2002, Sachs has been Director of The Earth Institute at Columbia University, and a professor in Columbia’s Department of Economics, School of International and Public Afffairs and Department of Health Policy and Management; in 2003 he became Quetelet Professor of Sustainable Development. He is also Director of the United Nations Millennium Project and Research Associate at the National Bureau of Economic Research. Previously, Sachs has been an advisor to the IMF, the World Bank, the OECD, the World Health Organization, and the United Nations Development Programme.
In his 2005 work, The End of Poverty, Sachs wrote that “Africa’s governance is poor because Africa is poor”, reversing the usual assumption. According to Sachs, with the right policies, mass destitution – like the 1.1 billion extremely poor living on less than $1 a day – can be eliminated within 20 years. China and India serve as examples; China has lifted 300m people out of poverty in the last two decades. For Sachs a key element is raising aid from the $65bn level of 2002 to $195bn a year by 2015. Sachs emphasises the role of geography, with much of Africa suffering from being landlocked and disease-prone, but stresses that these problems once recognised can be overcome: disease (such as malaria) can be controlled, and infrastructure created. Without specifically addressing these issues, political elites will continue to focus on getting resource-based wealth out of the country as fast as possible, and investment and development remain mirages.
Sachs claims he has developed a new branch of economics, called “clinical economics.”
Sachs is married to Sonia Ehrlich Sachs and has three children, Lisa, Adam, and Hannah.
Contents
Criticism
While a hero to many, some economists also view Jeff Sachs’ proposals as dangerously naive. One of his strongest critics is New York University (NYU) Professor of Economics William Easterly who savaged End of Poverty in his review for the Washington Post.
Another person to criticize Sachs is Amir Attaran, who is a scientist and lawyer and currently the Canada Research Chair in Law, Population Health and Global Development at the University of Ottawa. Sachs and Attaran have worked closely as colleagues, including to coauthor a famous study in The Lancet documenting the dearth of foreign aid money to fight HIV/AIDS in the 1990s, which led to the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria. However, Sachs and Attaran part company in their opinion of the Millennium Development Goals, and Attaran argues in a paper published in PLoS Medicine and an editorial in the New York Times that the United Nations has misled by setting specific, but immeasurable, targets for the Millennium Development Goals (for example, to reduce maternal mortality or malaria). Sachs dismisses that view in a reply to PLoS Medicine by saying that only a handful of the Millennium Development Goals are immeasurable, but Attaran also replies citing the United Nations’ own data analysis (which the UN subsequently blocked from public access) showing that progress on a very large majority of the Millennium Development Goals is never measured. Their ongoing debate on the web is one of the most fundamental in the future of international development.
Jeffrey Sachs was lampooned in Columbia University‘s 112th annual Varsity Show, entitled “Misery Loves Columbia.” The show’s plotline mainly centers around Professor Sachs abusing his position as head of The Earth Institute and his past television special with Bono and Angelina Jolie (which aired on MTV), to acquire the admiration of the student body.[citation needed]
——————————————————————-
——————————————————————-
-
Gonzalo Sánchez de Lozada
First term
August 6, 1993
to August 6, 1997
Preceded by
Jaime Paz Zamora
Succeeded by
Hugo Banzer Suárez
Second term
August 6, 2002
to October 17, 2003
Preceded by
Jorge Quiroga Ramírez
Succeeded by
Carlos Mesa Gisbert
Date of birth
July 1, 1930
Place of birth
Cochabamba
First Lady
Ximena Iturralde
de Sánchez de Lozada
Party
MNR
Gonzalo Sánchez de Lozada Bustamante (born July 1, 1930), familiarly known as “Goni”, is a former two-term president of Bolivia. He is credited for “shock therapy” (brought bolivia 25,000 % per year) (with Jeffrey Sachs) — the extreme measures taken by Bolivia in 1985 to cut down on rampant hyperinflation caused by excessive government spending. He is also credited for a series of reforms during his first term that included decentralizing the country, bilingual education, and significant changes to the constitution. Elected to a second term with only 22% of the vote, he was ousted by massive protests in October 2003, where around 60 people died (between protesters, soldiers and police).
He studied literature and philosophy in the University of Chicago. Not long ago, he resigned to the presidency o the Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario, MNR).
Regarded as “a Bolivian statesman” by some supporters, Sanchez de Lozadas is an important political figure in Bolivia of the past decade.
Gas War and resignation
During the Bolivian Gas War (more than 50 people died) in his truncated second term, Sánchez de Lozada was criticized because multinationals continued receiving share of profits from Bolivia’s natural gas reserves. This angered many Bolivians and propelled a populist uprising led by syndicalists Jaime Solares and Roberto De la Cruz, cocalero Evo Morales, and indigenous leader Felipe Quispe, fed by rumors that Bolivia would export gas to the USA and Mexico using Chilean ports, a country widely despised country since the War of the Pacific. The uprising that resulted in October 2003 had many different goals, converging eventually on calls for full nationalization of Bolivia’s hydrocarbons industry.
The indigenous protests began July 2003 earlier over long-standing grievances with the Bolivian government. These protests involved highway road blockades which ended violently after Bolivian troops tried to free about a thousand tourists held hostage in the town of Sorata. The confrontation left six of the armed campesinos dead.
The syndicalist protests led by Jaime Solares and Roberto De la Cruz aimed primarily at revoking the government’s neoliberal policies in place since 1985. Such demands included calls for full nationalization of the nation’s hydrocarbon industry. Their general demands were for a return to the corporatist policies of the post-revolutionary state.
The cocalero protests were less prevalent in the conflict, limited principally to the usual demands for an end to coca erradication efforts. Their leader, Evo Morales, later joined in demands for oil and gas nationalization, but vacilated between full nationalization and legislation to impose much higher tax rates (50%).
Protests were mostly localized around La Paz and the surrounding countryside. By mid-October, protests were spreading to Cochabamba, an Evo Morales stronghold. A group of Evo Morales sympathizers tried marching into Santa Cruz de la Sierra, and were assaulted by local citizens, many of whom still supported the besieged president. This incident, among others, convinced Sánchez de Lozada that the country was dangerously close to civil war, and also that his post as President was in danger. He decided to send the military to the streets, with orders to fire on the unarmed civilian population, if necessary.
In order to bring to an end the chaos in La Paz and El Alto, in which as many as 50 people were killed, including soldiers, and with no other choice at hand, Sánchez de Lozada was forced to resigned on 17 October 2003, leaving Bolivia the same day with his family for exile in the United States; he currently resides in Chevy Chase, Maryland. Currently the Bolivian government is pushing the U.S. government to serve Goni his papers to testify in court. However, the bolivian governement is also blocking the intentions of international organizations for an international investigation on the issue.
———————————————————————
———————————————————————
Bolivia nationalizing gas industry
FOREIGN COMPANIES REQUIRED TO LEAVE OR SIGN NEW CONTRACT
By Alvaro Zuazo
Associated Press
LA PAZ, Bolivia – President Evo Morales decreed he was nationalizing Bolivia’s vast natural gas industry Monday, sending soldiers to occupy gas fields and threatening to evict foreign companies unless they give the Andean nation control over the entire chain of production.
The move fulfills an election promise by the leftist president, who has forged close ties with Cuba’s Fidel Castro and Venezuela’s Hugo Chávez, to increase state control over Bolivia’s natural resources, which he says have been “looted” by foreign companies.
Morales sent soldiers and engineers with Bolivia’s state-owned oil company to installations and fields tapped by foreign companies, including Texas-based Exxon Mobil. The companies have six months to agree to new contracts or leave Bolivia, he said.
“The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources,” Morales, Bolivia’s first Indian president, said in a speech from the San Alberto field operated by Petrobras in association with Spanish-Argentine owned Repsol and France’s Total SA.
State television aired footage of soldiers and police standing guard outside some gas installations and petroleum company offices in the eastern city of Santa Cruz, where much of the industry is based.
Vice President Álvaro García Linera said troops were sent to 56 locations nationwide.
“The looting by the foreign companies has ended,” Morales declared.
Brazil is Bolivia’s biggest natural gas client, followed by Argentina, and Brazil’s demand has been rising rapidly because of power generation, cooking and automotive needs.
Landlocked Bolivia must sell to its neighbors because it lacks a pipeline to ship gas to the Pacific Ocean and from there to Asia, Mexico or the United States.
Any price jolts would mostly be felt in Argentina and Brazil, but Bolivia already has been seeking to boost prices for customers in both countries.
Bolivia has South America’s second-largest natural gas reserves after Venezuela, and all foreign companies must turn over most production control to Bolivia’s cash-strapped state-owned oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Morales said.
Multinational companies that produced 100 million cubic feet of natural gas daily last year in Bolivia will be able to retain only 18 percent of their production, with the rest being given to YPFB, he said.
“We are monitoring the situation very closely,” said Bob Davis, a spokesman for the world’s largest oil company, Exxon Mobil, which has a 30 percent interest in a non-producing field called Itau.
Morales said the government would begin negotiations immediately with the companies.
————————————————————
————————————————————
Bolivia’s Energy Takeover: Populism Rules in the Andes
Bolivia’s nationalization of its energy industry, announced Monday by President Evo Morales, was a vivid illustration that the populist policies, championed most prominently by Venezuela, were spreading.
Skip to next paragraph
Agencia Boliviana de Informacion, via Reuters
President Evo Morales of Bolivia with an army escort yesterday while visiting the San Alberto gas field, where he announced the nationalization of the country’s petroleum industry. The banner behind reads, “Nationalized. Property of the Bolivians.”
Juan Karita/Associated Press
Bolivian soldiers guard the Senkata Gas Plant in El Alto.
The impact on international energy markets is expected to be minimal because Bolivia produces mostly natural gas and exports it to just two countries, Brazil and Argentina.
Symbolically, however, the dispatch of troops to refineries and oilfields threatens to inject more nationalistic fervor into the policies of Bolivia and other energy exporters, in Latin America and abroad.
“We’re experiencing the supremacy of emotional politics at this time,” Gonzalo Chávez, an economist at the Catholic University of La Paz in Bolivia, said in a telephone interview. “The nationalization was received with great enthusiasm, but we’ll have to wait and see how the economic impact of all this plays out.”
Many countries have already taken steps to assert greater control over their natural resources, spurred by nationalist politics and lofty energy prices.
Major oil suppliers like Saudi Arabia and Iran nationalized their oil interests decades ago. Russia recently reorganized its domestic energy industries as well. But it is in the Andean region where momentum is quickly building for a greater government role.
Venezuela, a top supplier of oil to the United States, is at the forefront of this trend, recently forcing foreign energy companies to accept state control of important ventures.
Ecuador imposed rules in April that increase the state’s share of windfall oil profits, while in Peru, Ollanta Humala, a presidential candidate, has called for a more aggressive government role in natural gas and mining operations.
On Tuesday, Bolivia’s vice president, Álvaro García, said major mining companies would also have to pay higher taxes. “There are not going to be company expropriations, of course,” he told a local radio station, according to Reuters, “but we’re going to assume a greater level of state control.”
The government said it expected the nationalization of its energy sector, which includes the second-largest natural gas reserves in Latin America, behind Venezuela’s, to raise its annual revenues by more than $300 million, to $780 million.
“I don’t think the game is over,” said Lawrence J. Goldstein, president of the PIRA Energy Group, which is based in New York and is supported by the petroleum industry. “It’s going to move from the Americas to the Africans. This is a very dangerous precedent.”
Bolivia’s step highlighted the region’s changing political landscape, pointing first to the weakening influence of the United States, and to the rising profile of Venezuela’s president, Hugo Chávez, who has been empowered by soaring oil revenues.
But it also threatened to open a schism among the region’s new wave of left-leaning leaders. Brazil’s president, Luis Ignácio da Silva, while nominally left-leaning, has drifted more toward the center since his election in 2002. Now he will have to negotiate a way out of the current crisis for his country, which is one of the biggest investors in Bolivia’s energy industry and the main buyer of Bolivia’s natural gas.
Brazil announced late Tuesday that Mr. da Silva would meet Thursday in Puerto Iguazú, Argentina, with Mr. Morales and with Argentina’s president, Néstor Kirchner, to press for stability in energy supplies and prices. Mr. Chávez may also attend.
The Brazilian state oil company, Petrobras, the nation’s largest company, is among the small number of foreign energy companies that will feel the brunt of Bolivia’s decision.
At a news conference on Tuesday, André Singer, a Brazilian government spokesman, said Petrobras would maintain its Bolivian operations for the time being, though it remained wary of future investments.
Other energy companies affected include the BG Group in Britain, Repsol-YPF S.A. of Spain and Total of France. The only Bolivian investment of Exxon Mobil, the largest American oil company, is a minority stake in a nonproducing gas field controlled by Total.
The president of Repsol, Antonio Brufau, said the Bolivian decree fell “outside the norms and logic of business that should be the guides for relations between companies and governments.”
Companies said they were waiting for more details to emerge and for negotiations or legal arbitration to begin with the Bolivian government, which has given them six months to agree to the new conditions or leave.
For the largest natural gas fields, the decree would give the government 82 percent control, including royalties, taxes and direct stakes, while that level would be lower for smaller fields.
But specifics remain to be clarified, in particular whether infrastructure or assets will be seized without compensation. The decree described earlier policies giving foreign companies a foothold as “treason.”
Edward E. Miller, president of Gas TransBoliviano S.A., a company that operates part of the pipeline to Brazil, said people in the energy industry were still trying to make sense of the changes.
“We have military in front of our offices, but they’re not doing anything but making sure people don’t take anything out of the offices,” Mr. Miller said in a telephone interview from Santa Cruz de la Sierra, in Bolivia. “They’re not abrasive, they just don’t want anyone to leave with laptops or documents.”
In taking such a bold step, Mr. Morales appeared to have taken a cue from President Chávez, who has used his oil money to buttress alliances. In Bolivia’s case, Venezuela has agreed to supply about 200,000 barrels a month of subsidized diesel, donated about $30 million for social programs and sent literacy volunteers into the Bolivian countryside.
Just a day before his nationalization speech, Mr. Morales entered into a trade agreement with Venezuela and Cuba called the Bolivarian Alternative for the Americas.
“Chávez is forcing Bolivia into a radical shift,” said Roger Tissot, director of markets and countries for PFC Energy, a consulting firm in Washington. “That is the major headache for the U.S.”
The Bush administration has quietly tried to engage the new Bolivian government, though that overture and Brazil’s efforts to moderate Mr. Morales appear to have had little effect.
A perception that foreign oil and mining concerns have exploited landlocked Bolivia has been a driving force in the country’s politics for decades. But it gained new currency after Bolivia and other nations in the region reopened the energy industry in the 1990′s.
Since then, there have been boisterous protests and a tide of electoral revolts by voters who felt that the economic benefits had not spread to the poor.
Bolivians have also chafed somewhat at their dependence on Brazil. Petrobras controls 45 percent of Bolivia’s natural gas fields, and part of a pipeline that supplies 51 percent of Brazil’s need for natural gas.
At the same time, Brazilian companies, eager to expand into neighboring countries, have been struggling to do so without offending their hosts.
“Brazilian companies still do not have a nuanced approach, a diplomatic culture, particularly in relation to smaller countries,” Luís Nassif, one of Brazil’s leading economic commentators, recently wrote in the newspaper Folha de S. Paulo. “They are arrogant, like the British before World War II.”
Yet while Brazil might feel tremors from Bolivia’s decision, it is Bolivia that may be risking its potential as a major natural gas exporter.
Companies had been holding off on investments in Bolivia for some time, unnerved by growing talk of precisely the kind of step that Mr. Morales took this week. Foreign direct investment, much of which goes to energy and mining, fell to $103 million in 2005, from $1 billion in 1999.
What is more, unlike oil, natural gas is not easily exportable, with costly liquefaction facilities, customized tankers or pipelines needed to take the fuel to markets. Chile, a potential market for Bolivian gas, may choose instead a project to import the fuel from as far away as Africa.
Even Brazil, while now reliant on Bolivian gas, has recently discovered large offshore gas reserves of its own. Thus the window of opportunity for Bolivia to become a leading gas exporter may be closing, even as it grows more courageous in its dealings with foreigners.
“If Brazil decides to give the cold shoulder to Bolivia,” said Carlos Alberto López, an independent consultant for oil companies in La Paz, “Bolivia will be left with its gas underground.”
———————————————————-
———————————————————-
Recent Comments