Wednesday, May 03, 2006


Misplaying Bolivia

Bolivia has huge natural gas reserves, valued at $70B, which it has just "nationalized." (See also this for quotes below.) Now, the nationalization seems to be more sizzle than steak. Most people are convinced that this is simply a contract re-negotiation to replace miserly royalties and a lack of transparency with a fairer system. Many of the big players are not US or European. Petrobras and Spain's Repsol TPF are. And Bolivian president Evo Morales is friends with Brazil's Lula. But run this through the mindset prevalent in Washington: Gas fields nationalized. Soldiers take control of the Palmasola refinery. "the Bolivian government has declared absolute control over the country's energy resources." President, who is "a former coca-growers' union leader" promises that this is "just the beginning, because tomorrow it will be the mines, the forest resources and the land". And there are US, British and French interests involved: Chevron, BP, and Total. And there's Hugo Chavez and Castro in the mix! There must be high hysteria in Washington right now, largely because they're so disconnected from the calming influence of reality. Perceptions in Latin America differ greatly from those in the US. Yes, the very few people who comprise the oligarchy are probably frightened by these developments. But the overwhelming majority of Latin Americans are poor, and many identify as indigenous (mestizos are also indigenous, but most don't identify as such). Castro is seen as the guy who stood up to the US. In some places, that makes him very popular, but he gets a grudging (and very carefully hidden) respect even among many Cuban exiles. US policy in Latin America has been pathetic and destructive under every Administration for two centuries. But some Administrations, notably that of John Kennedy, created a sense of hope for change and channeled energy in positive directions. As FDR showed here, hope does wonders for people living at the margins. The hysterical and repressive policies of the Bush Administration make clear to Latin America that the only way forward is by reducing US influence. If the US pushes too hard, it could create a branch of Al Qaida in some of the least Muslim countries of the world. But a more positive outcome is, in my opinion, likely. Bush is so inept that misplaying Bolivia might well galvanize South America into genuine reform, modernization, and regional integration.
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