Royal Dutch Shell Plc  .com Rotating Header Image Oil Radicalism in South America

By Alan Mota   
Published 2007-04-23 11:15 (KST)    
Bolivia, the most impoverished country in South America, is a very dependent country. Dependent on foreign investments, on its tiny elite of millionaires, but also dependent on Evo Morales — the current president — and the nation of peasants of native descent he represents. But above all things, Bolivia is heavily dependent on its natural gas reserves, the only reason why the country wasn’t forsaken by Western capitalism after a pro-Hugo Chavez president was elected.

Morales, the pro-Chavez president in question, was elected on a landslide by the majority of poor, suffering Bolivians who were tired of presidential coups, and the appalling economic disparity of the country. He won in great part for his nationalist speech against the exploitations of Western (i.e. American) capitalism and the predatory oil and gas companies that were raiding the country’s resources.

One of his first acts upon being elected was to raise the share of the government on the gas profits from the oil companies, such as Brazil’s Petrobras, France’s Total and British Petroleum. The companies pushed back, but they ended up agreeing to Morales’ terms, the terms being that, from that moment on, the Bolivian state oil company — Yacimientos Petroliferos de Bolivia (YPFB) — would own the gas reserves of the country, and allow the foreigners to explore it under concessions.

With this done, after a tough negotiation, the main livelihood for Bolivia seemed secure, secure enough for Morales to relax and move on to the next points on his agenda — a new constitution, for example. The peasants were happy, the elite — well, they tolerated it and the foreign companies would remain profitable on Bolivian soil.

However, the situation doesn’t seem to be so calm after all.

Many people, part of them employees of the foreign oil companies, part of them peasants of native descent just like Morales, seem to have taken his nationalist speech too seriously and keep making constant protests around or inside these companies’ properties, striking, invading their gas fields, and closing their operations temporarily.

Morales’ followers seem to be taking his speeches one step forward, right after he managed to tame the foreigners and the Bolivian elite and build a somewhat calm situation in the country. What seems to be the biggest and most harmful of these protests took place recently, when a week of protests made YPFB cut down on their gas supplies to Argentina by 75 percent, and to Brazil by 10 percent.

The main protests took place on a plant run by a Royal Dutch Shell subsidiary and in a gas field owned by Petrobras. On the San Alberto field — the one from Petrobras — the protesters were announcing their intention to “seize control of the plant,” as protest leader Delio Aguera said.

This caused strong tensions between Brazil, Bolivia and Argentina. Luis Inacio Lula da Silva — the president of Brazil, who personally supported Morales during his presidential campaign and flew to Bolivia for the ceremony after he went to office — came to the point of threatening taking legal action against Bolivia in an international court if Morales didn’t tame the protests. Argentina also had serious complaints to make, for having to stop its own gas exports to Chile because of the incident.

At some point, there was only one thing to be done, one deeply un-Morales-like, one that basically went against his own political upbringing: Call the cops.

The president ordered Bolivian police and military forces to disperse the protesters — in San Alberto they were more than 500 — and take over the fields, guaranteeing the companies’ ownership over their plants and allowing business to go back to usual. Morales did that indeed, and announced that now the gas distribution would be going back to normal levels by April 21, at noon.

Still, he couldn’t quite convince his peers. This past Friday the Brazilian government published a contingency plan for a possible “abrupt reduction on gas supply,” in other words, a Bolivian backstabbing, that would involve Petrobras — a company owned mostly by the state, but with public shares — shifting its focus towards other countries to get gas from, such as far-away Algeria in northern Africa.

So, at the end of the day, Morales did to the protesters what so many times the Bolivian government did to him. But the question here is: “So what?”

Apart from the irony of being on the other side of the table now, Morales doesn’t — and shouldn’t — have to worry about a moral dilemma in this situation. After getting into office he finally understood that revolutions take time nowadays. And that Bolivia is really very dependent on gas and at the same time not capable of exploring it without a little help from his Western oil and gas friends. And in this situation not even Chavez can save him; PDVSA, the Venezuelan state-owned oil company, is too busy with its own oil fields, and hasn’t really invested in Bolivia so far.

It’s still sad that he had to send in the “dispersion crew,” something that must have caused a bad impression among Morales’ supporters. But difficult decisions have to be made; it’s part of being a president. And at some point he probably asked himself the question, “If I side with the peasants on this one, what would happen?”

First of all, Brazil wouldn’t be happy. And it would be terrible news for Bolivia, as the Petrobras subsidiary in Bolivia is the biggest company in the country right now.

Furthermore, Lula, the true leader of South America, the one that meets with George Bush and the European leaders, the one that still supports Morales and is willing to put the oil CEO’s at ease when asked if they should trust Bolivia or not, would lose trust in him once and for all, leaving Morales virtually alone in the international community, because lining up with Chavez might be good to get some investment and wave the socialist flag. But when it comes to business with the Western capitalists, the Venezuelan self-proclaimed hero wouldn’t do him much good, and Morales probably knows it.

Second, he would be backstabbing the oil companies; the message would basically be “We don’t want you here.” The problem is that Morales might not want them in Bolivia but he needs them in Bolivia. Therefore, he can’t afford any Chavez-like rantings on foreign capitalism — not for now. Because once he delivers this message, the oil companies might as well be gone for good, and not come back until Morales and his allies lose an election.

And even if that happened, there would still be major suspicion towards Bolivia, scaring off investors and development, something that Morales wouldn’t want for his supporters, mostly peasants, who would suffer the most from a recession.

Morales, therefore, played the political game of the “Western capitalist devils.” And that was perhaps his best decision so far. Because no matter how determined and supported by the people you are; sometimes you just can’t fight against the giants. Especially when you’re the most impoverished country in South America.
©2007 OhmyNews and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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