POLITICS-BOLIVIA:
It’s All about the Gas
Revenues
By Franz Chávez
LA PAZ (IPS) - Revenues
from Bolivia’s sales of
natural gas, which have
ballooned in the last
few years, are now at
the centre of the tense
political polarisation
threatening to tear the
country apart and are a
main motivation in the
opposition’s attempt to
undermine the leftwing
government of Evo
Morales.
Gas revenues soared from
188 million dollars in
late 2001 to 1.57
billion dollars in 2007,
after the Morales
administration forced
foreign oil companies to
renegotiate the terms of
their contracts, thus
increasing the royalties
and taxes paid by the
companies.
The revenues now
represent one-seventh of
Bolivia’s gross domestic
product (GDP) of 11
billion dollars, and
have become the main
source of income for the
governments of the
country’s nine
provinces.
In 2007, the government
distributed 737 million
dollars in natural gas
taxes to the nine
provinces, according to
figures provided to IPS
by the Energy Ministry.
That figure was 446
million dollars higher
than the first
distribution of the new
direct hydrocarbons tax
(IDH), in 2005, when the
then government of
interim president
Eduardo Rodríguez
created the tax aimed at
transferring money to
the provincial
governments.
Today the pie to be
carved up is enormous.
Senator Fernando
Rodríguez of the
rightwing opposition
Podemos coalition told
IPS that the total gas
revenues taken in by the
state will easily reach
four billion dollars
this year, based on
natural gas exports to
Brazil and Argentina and
domestic fuel sales.
The seemingly
unstoppable rise in the
international price of
oil has also boosted the
country’s gas income,
despite the fact that
gas sales to Brazil and
Argentina have declined
due to growing domestic
demand for gas in
Bolivia, even though
this country has the
largest natural gas
reserves in South
America -- 47 trillion
cubic feet -- after
Venezuela’s.
Rodríguez said that
under the current law on
the distribution of
natural gas revenues,
440 million dollars
should go to the
gas-producing regions of
Santa Cruz, Tarija,
Chuquisaca and Tarija,
and 160 million to the
remaining five
provinces.
But the huge windfall
profits prompted Morales
to divert a substantial
portion of the transfers
to the provinces into a
universal pension fund
for people over 60,
which expanded the
number of eligible
elderly people from
489,000 to 676,000,
providing them with the
equivalent of 27 dollars
a month.
A source with the
provincial government of
Tarija, the country’s
most natural gas-rich
province, told IPS that
this year, the transfers
to the provincial
governments will be 260
million dollars less
than in 2007, as a
result of the pension
programme.
José Antonio Aruquipa of
Podemos, a member of the
constituent assembly
that is rewriting
Bolivia’s constitution,
told IPS that the
movement for autonomy in
the provinces of Santa
Cruz, Beni, Pando and
Tarija is fuelled by the
aim of gaining greater
provincial control over
gas revenues. "Without
the IDH, autonomy is a
vehicle without
gasoline," he said.
Bolivia, South America’s
poorest country, is
basically divided
between the western
highlands, home to the
impoverished indigenous
majority, and the much
wealthier eastern
provinces, which account
for most of the
country's natural gas
production, industry,
agribusiness and GDP.
The population of
eastern Bolivia tends to
be of more European
(mainly Spanish) and
mixed-race descent.
The rightwing opposition
argues that the national
government only needs
200 million dollars,
rather than the 260
million dollars that it
currently retains from
the natural gas revenues
for the pension for the
elderly.
When the new pension,
known as the Renta
Dignidad, went into
effect in January this
year, Morales argued
that the country’s
natural gas income
should benefit the
entire population.
For most of the
recipients, the Renta
Dignidad is the only
pension income that they
receive, as they worked
in the informal sector
of the economy and are
not eligible for social
security. Nearly 60
percent of elderly
people in Bolivia live
on less than one dollar
a day.
The provinces that have
passed autonomy statutes
that run counter to the
constitution have
designed a political
strategy, backed by
Podemos, aimed at
recuperating the natural
gas income that they
accuse Morales of
"confiscating" -- even
though many of the
elderly benefited by the
universal pension live
in those provinces.
In the eastern city of
Santa Cruz, the radical
rightwing president of
the Santa Cruz Civic
Committee, Branko
Marinkovic, announced
street marches and
hunger strikes in the
pro-autonomy provinces
to demand the return of
the funds collected by
means of the IDH.
The new political battle
is being waged just
ahead of an Aug. 10
recall referendum for
Morales, Vice President
Álvaro García Linera and
the country’s provincial
governors. The polls
indicate that both the
president and vice
president stand a good
chance of being
confirmed in office.
However, a top judge,
Constitutional Court
magistrate Silvia Salame,
recently ordered the
suspension of the recall
referendum.
In the tussle over
natural gas revenues,
Morales announced that
the pension scheme would
be put to a public
referendum, so that
voters could decide
whether a portion of the
IDH transfers to the
provinces should go
towards the universal
monthly pension for the
elderly.
In the coca-growing
region of Chapare in the
central province of
Cochabamba, rural union
leader Julio Salazar
questioned the
credentials of the
rightwing opposition
governors in their
defence of keeping the
IDH gas revenues
entirely for the
provinces.
He pointed out to IPS
that most of them were
allies of president
Gonzalo Sánchez de
Lozada (1993-1997 and
2002-2003), who was
overthrown in his second
term by a popular
uprising against a plan
for foreign oil
companies to export
natural gas at low
prices to the United
States and Mexico.
Salazar accused the
governors of promoting
the 1990s privatisation
of natural gas,
overturned since May
2006 by Morales’
renationalisation
process, which has
generated much greater
resources for the state.
"The social movements
are seeking dignity for
the country, so we can
stop being beggars,"
said the rural leader.
Tarija Senator Roberto
Ruiz of Podemos is
demanding compliance
with the hydrocarbons
law that was amended in
2005, and which earmarks
14 percent of natural
gas revenues for the
provinces.
He complained to IPS
that as a result of
decrees, which have less
authority than national
laws, the share of
revenues taken in by the
provinces has decreased.
Ruiz also criticised the
government’s failure to
live up to the terms of
the agreement for
exporting natural gas to
Argentina.
According to government
figures, the growth in
domestic demand for
natural gas has brought
exports to Argentina
down to one million
cubic metres a day,
instead of the 7.7
million agreed in a deal
between the two
countries. Brazil,
meanwhile, purchases 32
million cubic metres a
day of gas from Bolivia.
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