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Bolivia polarizes over controversial oil & gas bid

The oil and gas issue is the key factor in the political crisis this South American country has encountered since October, 2003.
The Congress validated a mandatory referendum over the control of gas reserves exploitation, but union leaders insist they would boycott the initiative and threat the embattled authorities with social unrest if finally approved.

Bolivia, South American poorest country, faces a turning point in its recent history plenty of turmoil and social unrest, as the Congress validated on Tuesday a mandatory referendum over the control of gas exploitation scheduled for July 18th. The bid has been supported by the centrist government and the powerful leftist farmer party –Movement toward Socialism-, but it is being fiercely resisted by right-wing forces, unions and indigenous groups.

The Bolivian July 18th referendum asks voters if they are in agreement with five measures. They are:
- The revocation of the current Hydrocarbons Law.
- The recovery of all well-head property rights over hydrocarbons by the Bolivian State.
- The re-establishment of YPFB (national oil company) as a State entity controlling the production of hydrocarbons.
- The use of Bolivia's gas to recover “useful and sovereign” access to the Pacific.
- The domestic industrialization of Bolivia's gas for internal development with up to 50% charges to private companies for rights to exploit the gas.

Despite the bill clearly improves current pro-multinational monopolies law, the Central Obrero de Bolivia (COB), country's main workers union, has rejected the questions arguing that they represent an attempt to facilitate the passage of a new Hydrocarbons Law to replace the discredited existing Hydrocarbons Law. Opponents argue that whatever the result in the first two questions, the multinationals will still retain the rights granted by former conservative president Gonzalo Sanchez de Lozada, who had to resign amid a popular rebellion against his draconian pro-market policies.

The COB argues that the referendum does not contemplate a question over the complete nationalization of gas reserves, and has launched a campaign to collect a million signatures –one eight out of Bolivia’s total population of 8 million- to drive back the referendum. Here, radical workers –miners, most of them- count with the help of a combative faction of the farmers’ movement led by indigenous chief Felipe Quispe.

Quispe threatened authorities with pickets and an “organized boycott” to frustrate the electoral process, which would also include the incineration of ballots all over the country. The government replied it would secure peace by deploying security forces.

Referendum’s question four hits a very sensitive issue in current South American agenda: the access of Bolivia to a coastline in the Pacific Ocean, which this country lost in a war against Chile in the 1870’s. Bolivia stands firm on its claim for sovereignty over the strip, but only through diplomatic methods. As Chile lacks of gas fluid, Bolivia’s intention is to try to use this resource to bring Chile back to talks.

Bolivia’s government faces a huge risk on July 15 referendum. If population says no, then President Mesa will lose its grounds, opening the gates for new insurrection from farmers and workers most radical forces. If Mesa’s gets a close victory, he will have to negotiate with them under huge pressure from below. Only an appalling triumph in the referendum can secure an easy transition for him.

Hernan Etchaleco