This project focuses on the push by Bolivian social groups to nationalize the country's natural gas supply. President Carlos Mesa called a referendum which fell far short of complete nationalization, and ultimately lost his presidency. This resulted in the election of Evo Morales soon thereafter.
These newly-declassified cables show the frustration of US Embassy staff with the social groups, and with the nationalization drive in general. It also shows an ambassador well-aware of the potential for groups like Morales' to succeed, while also giving "legitimacy" to many of the grievances brought by these groups.
In 2004, the Government of Bolivia announced a referendum concerning the country’s natural gas resources. The referendum would allow Bolivia to reclaim ownership of natural gas at the well-head, revitalize the state gas company (YPFB), and increase the amount of taxes and royalties foreign companies would pay. The President, Carlos Mesa, was fighting for political survival, as opposition groups pressed for complete nationalization of natural gas resources.
According to newly-declassified State Department documents, Embassy officials initially thought the nationalization drive was actually an attempt to achieve lesser gains:
"...When we press our social sector interlocutors for an explanation of the logic behind their nationalization proposal, it becomes clear that they understand almost nothing about its complicated technical, economic, and legal dimensions, and even less about the realities of the gas industry itself. They also acknowledge (at least in private) that, in making this radical demand, they are principally trying to force the Government to yield on unrelated issues or, barring that, to fold its tents and call for new elections” [May 21, 2004].
The reasons for social unrest were quite clear to Ambassador David Greenlee, who in the same cable offered a strikingly-honest assessment of the political climate:
"...[The political system] disregards the interests of the vast majority: the working poor, the peasantry, and the unemployed. These facts give a compelling moral legitimacy to the country's culture of protest and social unrest, which (as a result) cannot be dismissed as mere radicalism and irresponsibility run amuck.”
Yet protests were rampant. As Greenlee mentioned in a May 18, 2004 cable:
"Thousands of Bolivian Workers Union (COB) representatives marched on downtown La Paz May 17. Following President Mesa's declaration that the upcoming referendum did not include a nationalization option, an unlikely coalition of actors has called for early elections to replace Mesa and for nationalizing Bolivia's gas reserves...Joined by a number of its affiliates, the COB is demanding that the Government forego the referendum in favor of directly nationalizing the nation's natural gas reserves..."
The referendum passed, but was not enough to satisfy opposition groups. As noted in an August 31, 2004 cable:
"The MAS-sponsored nation-wide August 30 march turned out to be massive in Cochabamba but less so in other parts of the country, including La Paz. In Cochabamba, the MAS's home turf, approximately ten thousand people marched peacefully in the late afternoon calling for the nationalization of Bolivia's gas reserves. One contact who witnessed the march told us that the vast majority of protestors were cocaleros...He also said that MAS leader Evo Morales had made fiery public remarks at the rally warning the Government to listen to ‘the voice of the people’ or risk future demonstrations on a much larger scale."
The following June, after more than a year of regular protests and street blockades, Mesa resigned. The success of the MAS and other groups was viewed with some apparent respect by the Ambassador:
"Bolivia's social sector actors have successfully dispatched two consecutive constitutional Presidents: Gonzalo Sanchez de Lozada in October 2003 and Carlos Mesa in June 2005. While some analysts believe these emergent forces represent a dangerous, radical and motivated minority foisting their narrow anarchic platorm on an unwilling public, in our view they also express a widespread and building popular frustration with Bolivia's social and political status quo...In defending their demand for nationalizing the gas sector, social sector leaders...display a thinly disguised ignorance of economic reality, but they make up for this with a full-blooded confidence that the economic status quo has failed to improve the lives of most Bolivians."
The documents also show the concern of US corporations as regards nationalization. Though all company names have been excised, several companies "are reportedly negotiating consensual agreements, while others are prepared to proceed with arbitration if necessary...The four major areas under discussion are taxes vs. royalties, commercialization, ownership, and the re-founding of the state petroleum company YPFB. MAS continues to insist on a 50% royalty, while the Executive branch and other political parties are proposing a combination of royalties and taxes which will total 50%..."
Additionally, “We do not doubt that serious legal challenges are coming from some companies, but these may take time to materialize. Therefore, we are being careful not to make statements which get ahead of the plans of the U.S. industry players."
The State Department documents are provided in their entirety at:
http://www.cod.edu/people/faculty/yearman/national
ization.htm
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