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BOLIVIA
Gas referendum favors government
José Antonio Aruquipa
8/12/2004
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Differing interpretations over results could fuel divisions.

Demetrio Choque, an 83-year-old farmer now living in a poor community in La Paz, went to the polls on July 18 to exercise his right as a citizen and vote in the Bolivia’s referendum on how best to use its hydrocarbon reserves.

Casting his ballot, however, was a problem. Choque is illiterate, so the five questions crafted by President Carlos Mesa’s administration meant nothing to him.

"I didn’t understand, so I marked ‘No’ after each question," Choque said.

Despite the "no" vote cast by Choque and thousands of other spoiled ballots by people who want full nationalization of Bolivia’s hydrocarbon reserves, the five ballot questions were overwhelmingly approved by voters.

"Unmistakable power"

While the government promoted the referendum as an "historic conquest" of Bolivians and a chance for the country to move toward true participatory democracy — as well as define a new hydrocarbon policy — the vote helped Mesa consolidate his nine-month administration.

Mesa came to power in the wake of the "gas wars" in September and October 2003, which led to the downfall of his predecessor, Gonzalo Sánchez de Lozada, on Oct. 17.

Mesa, who had never held office before, ran as vice president with Sánchez de Lozada in 2002. Sánchez de Lozada was elected twice to the presidency, serving a four-year term in the last decade (1994-97) and trying to repeat again in 2002, but lasting only 15 months. Sánchez de Lozada was forced to flee because of gas, and Mesa’s political future depends on it.

Bolivia, where 4.7 million of its 8.3 million people live in poverty, possesses the second largest natural gas deposits in South America after Venezuela. Gas fields in the southern department of Tarija hold at least 50 trillion cubic feet of natural gas.

During a press conference with foreign journalists on the eve of the referendum, Mesa said he hoped the referendum would give the administration "unmistakable power … The polls put the president’s popularity in the 70-percent range, but this is the vision of the polls. The referendum will give us a clear vision. If the answer is ‘Yes,’ it will give me a moral and effective power that I will use."

While the five questions did receive massive support from Bolivian voters, opponents say that Mesa should not sing victory. According to Juan de la Cruz, a leader of the Bolivian Workers Central, which called for a boycott of the referendum, only 50 percent of the electorate cast votes and, of those, nearly 20 percent spoiled their ballot.

The results will now be scrutinized by the eight political parties with seats in Congress, which have to craft new policy based on referendum’s questions.

According to Roberto Mustafá, president of the Confederation of Private Businesses of Bolivia, the danger lies in how the administration and political parties interpret the results of question two, "recuperating the ownership of hydrocarbons at the wellhead for the Bolivian state," which was approved by 92 percent of voters.

First signs of conflict

The first signs of conflict appeared immediately after the polls closed and the administration announced victory.

Rep. Evo Morales, leader of the left-center Movement to Socialism (MAS), the second most important bloc in Congress, said the response to question two was a "mandate and order" from Bolivians for the government to "nationalize by law" hydrocarbons.

He said the MAS, which supported Mesa in the referendum, would begin drafting a new Hydrocarbons Law that would "review contracts, annul those that failed to comply and rework contracts in light of new conditions."

Nevertheless, according to a first draft of the new law proposed by Mesa, the changes will only apply to future contracts to exploit gas and oil reserves. The government would like to avoid having to review contracts that have already been signed.

The country’s hydrocarbon reserves were awarded to transnational companies through 78 contracts signed under the Hydrocarbons Law, approved in 1996 during Sánchez de Lozada’s first term in office.

The law called for companies to pay the Bolivian state royalties on the equivalent of 18 percent of their profits. Most of the contracts were signed for 40 years.

The differences in interpreting the referendum’s results could cause "future conflict for the country," said political analyst Jorge Lazarte.

Opponents of the referendum claimed that the ballot questions were a "trick" by Mesa’s administration to gain popular support for the government while continuing the policy of exporting gas without touching the benefits reaped by private companies.

"Carlos Mesa is finished and wants to save his government with this referendum, trying to sell gas the same way Gonzalo Sánchez de Lozada wanted to sell it," said Rep. Germán Choque Condori.

Manfred Reyes Villa, head of the conservative New Republican Force (NFR) that was a partner in the Sánchez de Lozada government, said "whether ‘Yes’ or ‘No’ wins, the referendum is going to divide Bolivians further."

Mesa said opponents of the government’s policy are increasingly isolated and out of touch. He said that with the referendum "Bolivia has given to the world a message that it is not a country at risk of collapsing with its future mortgaged."

He added that "we are no longer talking about polls, but the votes of citizens, this is the message that the world had to hear."

For analyst Cayetano Llobet, the referendum did send a clear message.

"This referendum is like a vote for Carlos Mesa. Nationalization is not going to happen. Mesa has won a vote that will allow him to negotiate on better footing with the petroleum companies," said Llobet.


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President Carlos Mesa now has to translate a victory at the ballot box into a new hydrocarbon policy. (Photo: José Antonio Aruquipa)
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