Ciao!

What authority is Morales claiming for this decree? I followed several of the links you and Eduardo posted, and also seached the Gob. de Bolivia website, but could not find a statement of what the decree really says about legal standing and process, nor the decree itself.

The word "decree" can mean a lot of things.

REGARDING BOLIVIA'S NATIONALIZATION OF GAS. BEFORE YOU JUDGE EVO MORALES CONSIDER THAT THE BOLIVIAN PEOPLE ELECTED HIM TO NATIONALIZE THE NATIONAL RESOURCES. HE IS DOING WHAT ANY OTHER PRESIDENT OR COUNTRY DOES, THAT IS TO PROTECT ITS NATIONAL INTERESTS. I APPLAUD HIM FOR DOING WHAT HE SAID, EVEN IF HE IS WRONG, AT LEAST HE IS KEEPING HIS WORD. LET ME ASK YOU THIS QUESTION: AREN'T THE U.S CONGRESS AND GEORGE BUSH LOOKING OUT FOR THE BEST INTERESTS OF THE UNITED STATES WHEN THEY REFUSED, YES SIR, THEY REFUSED TO ALLOW THE SALE TO CHINA OF GNOCOL THE LARGEST CALIFORNIA BASED PETROLEUM COMPANY?
TOO MANY PEOPLE WRONGLY BELIVE THAT WHEN YOU LOOK OUT FOR THE INTERESTS OF YOUR COUNTRY YOU ARE A COMMUNIST. CAN I SAY THAT THE U.S. CONGRESS ARE COMMUNISTS BECAUSE THEY REFUSED TO ALLOW TO GIVE CONTROL OF A U.S OIL COMPANY TO A CHINESE COMPPANY, EVEN WHEN THEY OFFERED TO PAY MORE? IT IS MORE COMPLEX THAN THIS OF COURSE. YOU HAVE TO STUDY BOLIVIAN HISTORY AND ECONOMICS WRITTEN BY BOLIVIAN HISTORIANS OR ECONOMISTS IN A BOLIVIAN LIBRARY TO UNDERSTAND WHY IS IT THAT BOLIVIANS OR THE PRESIDENT WANT TO NATIONALIZE GAS RESOURCES. PUT YOURSELF IN THEIR SHOES WHEN THE AVERAGE DAILY WAGE FOR 8 HOURS OF WORK IS $5.00 DOLLARS. IT IS ALL ABOUT MONEY, BUSINESS IS ALL ABOUT MONEY. IF EVO IS GOING TO SHAKE OIL COMPANIES, WELL THAT IS WHAT INTERNATIONAL BUSINESSES DO MOST OF THE TIME TO FOREIGN AND POOR COUNTRIES, THOU THEY CALL IT LEGITIMATE BUSINESS PRACTICES. NO ETHICS AT ALL, THOU THEY ACT LIKE THEY PRACTICE BUSINESS ETHICS. BUT THE TRUTH IS BUSINESS AND ETHICS DO NOT GO HAND IN HAND, BUT PEOPLE AND SOCIETY FORCES BUSINESSES TO DO THIS. IF EVO MORALES OR BOLIVIANS DO NOT PUT THEIR FOOT DOWN, YOU CAN HAVE A NICE BOLIVIAN STATE CALLED FEUDALISMO DEMOCRATICO, WHERE THOSE WHO OWN THE GOLD MAKE THE RULES.

ROBERT JOAQUIN BEN YEHUDA

SHALOM,

I AM JEWISH BY THE WAY,
G-D BLESS YOU ALL

I imagine this was foreseeable.

These days, control of oil = (power + influence (100))

Joaquin:

First, please don't use all caps (they're hard to read).

As to your points. Look, I can understand why many Bolivians might want to nationalize hydrocarbons (I was born in Bolivia & am currently finishing a PhD in Bolivian politics here in the US). But I don't think Evo's actions are comparable w/ the recent US government's refusal to sell a major industry to Chinese interests. First, Evo has militarized oil fields, which is something Bush didn't do in California. Second, Evo has nationalized w/o prior notice investments that the Bolivian government was currently in the process of renogiating w/ (legal) foreign investors. Refusing to sell me bread is very very different from sellign it to me, then using a stick to take it back from me because you no longer like the price of the original sale.

My point is that Evo could've handled this very differently. All he's done (in my opinion), is anger foreign investors. And though you might think ethics & business don't mix (I think they do/should), business & rationality certainly should. The move was all posturing & no long-term planning. Plus, I suspect that (along w/ other recent Evo/MAS shenanigans) this move will simply turn into a cash cow for Evo & his friends (cf. Venezuela).

I think that Evo has done the best thing for his people!
Why don't you go to work for your country? It has so much need of professional and prepared persons!

Well, I disagree on whether Evo did what's best for Bolivia in the long run. Please read my post carefully, you'll notice that my argument (and it's an argument, rather than a slogan) is that by militarizing the fields & taking this unilateral step, all that he's gained is a symbolic gesture at the cost of angering much-needed foreign investors, who'll now press his government very hard. Bolivia is not Kuwait, it's an extremely underdeveloped, poor country. It can't afford to exploit the gas reserves -- especially if foreign investment dries up in response -- or risk losing customers to other gas exporters because of instability (Brazil & Argentina were already considering buying their gas from other sources for that very reason).

I also know the history of the YPFB, the most corrupt & inefficient bureaucracy in Bolivia, and am afraid that this is a disaster waiting to happen. But I could very well be wrong.

As for "why don't I go live in Bolivia" blah, blah, blah. Well, I don't think many Bolivians seem to want people who tell them the harsh realities of the world. The reality is that Bolivia needs free trade agreements, in part because it will never have access to the sea from Chile (or anywhere else). Simple solutions don't work. They might work in Venezuela, which had a higher level of development (though that's starting to collapse after a decade of Chavez rule), a sea coast, and well-developed oil & gas reserves. But not in a landlocked country that imports much of its food & relies on foreign economic assistance for almost half its GDP.

Certainly an interesting development for Bolivia. Not sure how well it's going to go--but it could be more successful than you think, particularly if Chavez decides to lend Morales the money to run the current NG operations, launch new NG operations, and handle other Bolivian obligations (foreign debt, etc).

As for the foreign companies, with energy prices the way they are--the current energy companies may walk away from the deal Morales is forcing on them, but new companies will be more than happy to be a minority partner with the state company. There is just too much demand for NG these days for any company to walk away from Bolivia's reserves.

I'm guessing that once Morales sets up the terms of minority partnerships for these companies, Bolivia will have all the technical expertise it needs. The troops guarding the NG fiels is just theater for Morales supporters who think a guy with a gun can protect a NG pipeline.

Although you give this experiment only 3 months, I would have to disagree with that guess. I think we're entering a new period of energy politics, where the energy exporting countries are going to demand and seize more power for themselves, because they can see just how helpless the energy importing countries are in the face of high energy prices and increasing demand. This type of situation is probably going to become the norm rather than the exception.

You might be right, Patrick. But I just do see it happening for Bolivia. Countries like Venezuela or Iran might be able to pull somethin like this off. But not a country as internally fractured, economically & technically underdeveloped, landlocked, and absolutely dependent on foreign aid. I really do believe this is a fiasco. A few syndicalist leaders will no doubt get rich, but the country won't really improve much.

The real problem is that we're already seeing rich countries moving away (or trying to move away) from hydrocarbons. Once they develop better alternate fuels, what then for countries like Bolivia? This is the time to secure foreign investment & get better integrated into the world economy. Not turn into a 1960s rentier state w/ little prospects for ten years down the horizon.

Also, I don't see how Venezuela can't continue to subsidize Chavez' ideological pals. Venvezuela *used to* have a solid economy, but it's no regional superpower (like Brazil), capable of subsidizing both Cuba & Bolivia. Plus, it's not in Venezuela's economic interest to help Bolivia develop its gas for Bolivia. Why trade dependence on Repsol for dependence on PDVSA?

55% of the natural gas that Brazil currently consumes is imported from Bolivia at below-market prices.

So, I don't think any "threats" that Brazil may leave the country and purchase their gas from somewhere else are just not credible.

While Evo's move is being framed in socialist/communist terms, isn't this the basis of capitalism, i.e. getting the highest price for what you want to sell?

Read a little deeper past many of the headlines that our out there. Petrobas stock fell 1% this morning and quickly regained its loss. The reason? Less than 2% of their total business transactions involve the Bolivian market. Plus, if they were to suddenly lose ALL investment in Bolivia, that would account for barely more than 1% of their total business investment. [One need not add the point that they have already recouped their investment many times.]

Bolivia is just beginning to act like any country around the world. Previously is was (primarily) US-centric politicians that made decisions in favor of foreign countries and their own pocketbooks. Now Evo and gov't has prioritized BOlivian interests. How that can be seen as radical, I still do not know.

Look, I'm well aware that Bolivia isn't get a fair deal out of the gas exports. That's not the issue. The question I raised was about tactics. Bolivia is dirt poor. That's the reality. It doesn't matter that it has sizeable gas reserves underground -- the country is dirt poor. So that puts it at the mercy of international markets & donors. Will Bolivia's move hurt Petrobras (or any other company) badly? No. But will it result in negative consequences? Yes! And that's the point. A country that depends for its continued survival on economic aid (not loans, just aid) can't afford to bite the hand that feeds it. Even if it's an unfair relationship. Starving to death on principle isn't very comforting to those starving to death. Especially if their leaders get to use what's left of the country's economic resources for themselves while other people do the starving.

My main point is that Evo has NOT acted in Bolivia's long-term interests. This move is, in my opinion, short sighted. If anything, he's now acting in Venezuela's interests. And I fail to see how acting in their interest is better than acting in Brazil's interests.

I can offer no comment pro or con to the current dialogue that I find very interesting since in a few short months I hope to make Bolivia my home (again after 20 years in the USA) The imbalanced distribution of wealth (poverty) is so very evident by just a glimpse of any city there. The haves have so much and certainly are not willing to lose it, and the havenots have not been educated in a manner that will help them enter 'society' on equal footing and be able to sustain an active role in national determination. Bolivia does need educated leadership at all levels of government.

180 days for negotiating the new terms is a long time. Isn't this maybe more of a negotiating tactic than anything else?

I do agree that the tactics were not helpful for Bolivia. Businesses and international NGOs always get skittish whenever a "populist" leader gets elected on promises of bringing power to the people. This nationalization will certainly not have scores of companies banging down doors to do business in Bolivia--every sector of the economy will probably feel a little pain over this as other international companies rethink their plans in Bolivia.

However, if things are as bad as you say with utter poverty everywhere and Bolivia ranking as the poorest country in SA--why not let Morales try something new? If he screws up and the whole economy collapses, well (not to be insensitive) it didn't have very far to fall did it?

What I'm trying to say is desperate times call for desperate measures. When the US suffered its great depression, there was an unprecendented increase in federal power over all areas of the economy--the amount of government intervention in the markets unleashed by FDR's New Deal far surpasses this most recent move by Morales--and much of the New Deal was passed in just the first 100 days of FDR's term as well.

So let's give Morales some time to try and get Bolivia a better deal.

By the way, nice article about "rentier states" -very apropriate.

See, I think things *CAN* get worse. Imagine how bad the economic situation is for poor people in Bolivia. Now imagine that international donors decide to suspend economic aid or debt relief. And that investors start to pull out (including domestic investors, who start sending their money to foreign banks). W/o that income flow, the government won't be able to provide basic services or even pay public salaries. Then imagine that the price of food doubles (not skyrockets, just doubles), because Bolivia imports much of its food. That's how bad things can get -- and just for starters.

Now imagine that the economy takes a slump in Tarija and the department votes for autonomy and then elects a local government that will privatize "their" resources, even in violation of the central government law. Or Santa Cruz. Or Chaco (if it becomes a department). That's really how bad things could get.

FDR's policies could work because the whold world was in a depression. But also because the US was an economically developed country. Heck, the move could even work (one can argue whether it is actually working or not) in Venezuela. But not in Bolivia.

I don't think people realize how dependent Bolivia has been on economic aid. And the gas fields, even at say 80% ownership, won't provide billions to subsidize a revolution as we're seeing in Venezuela. I give him 6 months, due to the length of negotiations and their subsequent consequences.

The only victims here are the left-leaning governments of Brazil and Argentina (irony?), Repsol and of course the people of Bolivia.

Evo is an idealist and unqualified, but the "oligarchy" needed a rude awakening that something needed to change in Bolivian politics.

I'm wondering why everyone is so surprised, he said since day one he would nationalize the industry even before he was elected president.

His "alliance" with Castro and Chavez makes him appear like a little boy being brainwashed by others who have their own interests in mind.