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Analysis: Crunch time for Bolivian gas

By CARMEN GENTILE, UPI Energy Correspondent   |   Jan. 9, 2008 at 9:59 AM   |   Comments

MIAMI, Jan. 9 (UPI) -- Bolivian President Evo Morales faces an uphill battle to keep his nation whole as several eastern provinces, which hold the country's lucrative gas reserves, are balking at his constitutional reform proposals.

Among the proposals being put forward by Morales -- Bolivia's first indigenous leader -- is a more equal distribution of the country's revenue from natural gas by giving the central government greater control of the Bolivian economy.

The proposal, in part, prompted four of Bolivia's nine provinces -- Beni, Pando, Terija and Santa Cruz -- to issue a statement of autonomy last month ahead of key meetings among provincial leaders and Morales that began Monday.

"The people want us to stay together," Morales said Tuesday. "Let's work together to resolve our differences."

That could prove more challenging than Morales and his allies are willing to admit, however, since the dispute over the gas issue in Bolivia has already, at least in part, led to the ousting of two presidents in the last few years.

In 2003 President Gonzalo Sanchez de Lozada suggested Bolivia sell its natural gas to its neighbor and long-standing rival Chile. The announcement spurred widespread violence that left dozens dead.

Bolivia's historical animosity toward Chile, according to Larry Birns, director of the Council on Hemispheric Relations, "is of course part of the eternal flame of Bolivian foreign policy."

During the protests, Goni, as de Lozada was called, attempted to pull Bolivia back from the brink by calling for a national referendum on the gas issue. The move proved too little, too late, as it was rejected by the opposition and former allies, who quickly abandoned the president.

Goni assured the nation the gas deal would be a boon to the country, but Bolivian protesters were skeptical, believing rampant corruption would prevent any benefits from trickling down to the majority. In 2004 Bolivians voted in a national referendum to forbid the sale of their gas to Chile.

The gas issue was also eventually the undoing of his successor, Carlos Mesa.

In June 2005 the Bolivian leader faced a round of violent protests over how the gas revenue was being spent. Mesa eventually stepped down, opening the door for Morales' eventual victory and decision to nationalize the gas industry.

Now it appears that even Morales' support among Bolivia's poor indigenous majority can't keep the nation from fracturing further.

A national referendum is scheduled for this year on whether the constitutional reforms, including the gas revenue distribution proposal, should go into effect.

If defeated, it could open the door to another referendum already being plotted by Morales opponents: a vote on whether he should remain in office.

The Bolivian president must in the coming days discover an agreeable middle ground for the culturally and economically divided eastern and western provinces on the gas issue or face the very real possibly that his administration will face a fate similar to his predecessors.

--

(e-mail: energy@upi.com)

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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