Thursday, August 18, 2005

And Now Rumsfeld Jumps In

US Secretary of Defense Donald Rumsfeld is taking a tour of South America this week and yesterday in Paraguay he joined in the Bush administration’s steady drumbeat of blaming Fidel Castro and Hugo Chavez for the last five years of Bolivian political turmoil.

Here’s what Rumsfeld said, according to both the BBC and Reuters: "There is certainly evidence both Cuba and Venezuela have been involved in the situation in Bolivia in unhelpful ways." Both reports went on to note that Rumsfeld offered up no actual evidence to support his claim.

So now, from the man who helped sell us a quagmire in Iraq based on invented claims of weapons of mass destruction, we have the warning that what is really going on in Bolivia is political division imported from abroad. Rumsfeld, who famously told us, “death has a tendency to encourage a depressing view of war," is actually quite right that Bolivia’s political instability is, in good part, a product of foreign influence. He just has the sources of that influence wrong.

If the US is concerned about foreign sources of Bolivian political conflict, here are some better candidates to look at:

The Bechtel Corporation: Bechtel took over the public water system in Cochabamba in 2000 and raised water rates for the poor so high that the entire city shut itself down in a general strike for a week, forcing a major Bush corporate ally (Bechtel along with Halliburton was also the winner of one of those no-bid mega contracts to rebuild Iraq) out of the country. The water revolt also lit the fuse of every social rebellion since, because the people won. Here’s our report.

The World Bank: It was the World Bank that forced water privatization onto Bolivia to begin with, by making it a condition of all further water development assistance and debt relief as well. The Bank is just around the corner from the White House and shouldn’t be hard for Rumsfeld to find. Here’s our report.

The International Monetary Fund: In February 2003 the IMF ordered Bolivia to reduce its budget deficit by a draconian amount, as a condition of further aid (and the IMF blessing that controls virtually all foreign aid), despite repeated warnings that the taxes required would spark a public rebellion. Those predictions turned out to be utterly on the mark and 34 people died as a result of the violent, totally avoidable conflicts, the IMF’s policies set off. Here’s our report.

Foreign Oil Companies: Shell, Enron, Petrobras, Repsol, British Gas and British Petroleum are all among the ranks of foreign oil companies who negotiated behind-closed-doors sweetheart deals with the government of Gonzalo Sanchez de Lozada, giving them effective control over Bolivia’s vast gas and oil reserves. The illegal contracts (they were never approved by the Congress, as required by the Constitution) are a huge source of resentment and at the heart of the public uprisings here in October 2003 in which Goni was forced out (his departure was not because of his policies but because of his violent repression against those who protested those policies). The gas issue was also at the heat of the uprisings here in May and June that led President Carlos Mesa to call it quits.

The US’ Own War on Drugs: For more than a decade the US has poured dollars and DEA agents into Bolivia in a “war on drugs”. Among the results have been thousands of innocents tossed into jail without trial in the name of giving the US Embassy good arrest statistics to show off to Washington. The famed alternative development projects that were supposed to be the positive side of the US effort are mostly a handout to wealthy Bolivian businessman. I know of one specific case (leaked to me by a USAID subcontractor) in which one of the wealthiest men in the region got thousands from the US for a palm heart processing factory and never even paid the campesino farmers who were his suppliers. Here's one of our reports.

Let’s be clear. Does the left in Bolivia have ties and kinship with Cuba and Venezuela? Absolutely. Are the influences from those two countries the reason for Bolivian political upheaval? Absolutely not.

For half a decade Bolivians have been reacting to a set of economic policies imposed on them from abroad, an economic course that they never chose and which has failed quite miserably on the facts.

The hand of the US, directly and through its corporations and the multilateral institutions it controls (the World Bank and IMF) is really the outside influence here and it should come as no surprise to Rumsfeld that it has provoked a reaction.

In the debate over weapons of mass destruction in Iraq, Secretary Rumsfeld argued, “simply because you do not have evidence that something does exist does not mean that you have evidence that it doesn't exist." It was on that basis that Rumsfeld and Bush dragged the US into a war of choice in which more than 1,800 US servicemen and an estimated 25,000 Iraqis have died.

As he tours South America, once again weaving a tale of, “we don’t have proof but we think it is the case,” what new plan does the Bush administration have in mind and who will pay the price this time?

65 Comments:

Blogger Boli-Nica said...

Geez, again with the selective indignation, over-simplification, and spin.

Anytime there is over 10,000 Cuban government personel in one country, that constitutes a threat.

As far as the root causes of Bolivia's crisis. That is not the issue, the issue is someone is financing and helping radical sectors who are leading and giving direction to the "mass movements", and they have ousted a democratically elected president, caused hundreds of millions of dollars in economic losses, and cost the country billions in lost investment revenue.

Schultz also simplifies and distorts some of the other facets of the erradication program, which has helped many SMALL farmers with cultivating alternative crops. As a result, the Chapare region is also producing millions of dollars worth of produce for internal consumption.
Have there been abuses. YES. But those go both ways, while some big growers have got money, some MAS-connected, alleged dope dealer also got $$$.
In the end, if these alternative crop programs were such failures, why have the MAS-backed Cocaleros attacked and burned program centers?

And while we are at it, why did Morales suddenly pop up, when erradication was seriously threatening to shut down the Bolivian coca paste trade?

2:37 PM  
Blogger Dan said...

Excellent post, Democracy Center.

I find it pretty disturbing that it is the Secretary of Defense (read: Secretary of War) touring and commenting on these things to begin with. Of course, in South America the distinction of roles of the military and civilian areas of U.S. government has long been undiscernable. One example is the now discontinued Operation Snowcap, in which Green Berets worked hand in hand with the DEA in the Andean coca-producing regions. But under the Bush administration, the lines have blurred at home, too. Rumsfeld's comments were problematic in and of themselves, but sending the head of our armed forces to make such comments seems to me just so much more saber rattling from a government drunk on unjust war.

A question about other comments here: Rumsfeld and Jim Shultz are both talking about the influence of both Venezuela and Cuba in Bolivia.
Boli-nica, are you still talking about Cuba's influence in Venezuela? The comment you've posted to this blog entry implies that there are 10,000 employees of the Cuban government in Bolivia. That's astounding. I don't think that's what you meant, though, is it?

And if you are referring to Venezuela, aside from being irrelevant here, your point is confusing. Are the Cubans in Venezuela against Chavez's will? If not, the "threat" is to your ideas of what Venezuela should look like. Even when comparing to Rumsfeld's and your take on Bolivia, the foreign presence is different: Cubans are in Venezuela cooperating with the democratically elected government there (and Cuba is hardly the power that Venezuela is, so we can assume such collaboration is truly desired, not strongarmed the way so much U.S. "cooperation" in foreign countries is); Cubans and Venezuelans are allegedly in Bolivia collaborating with opponents of democratically elected governments. Apples and oranges, again.

And how can one make accusations about selective indignation in one breath, and in the next breath say that the foreign causes of Bolivia's crisis, which Jim has just outlined so well, are "not the issue?" The Democracy Center has placed Rumsfeld's comments in a very helpful context - without even denying the likely links between the Bolivian left and other leftist leaders in the region - and to simply dismiss the reality Jim's post outlines is intellectually reckless.

3:24 PM  
Anonymous Anonymous said...

It is only to be hoped that such intellectually reckless garbage will not again win the day in December, and much less in May- if a Constitutent Assembly is actually held then.

Those who are so eager to cry wolf (or rather, Barbudo and Populist) will have no problem letting the true wolves tear apart our country and consolidate forever the yoke of Northern power.

Thanks, Jim, keep telling the truth.

5:53 PM  
Blogger Boli-Nica said...

For Dan, and any other fellow traveller, who sees Castro and Chavez as new revolutionary heroes.

i. Rumsfeld says "there is certainly evidence both Cuba and Venezuela have been involved in the situation in Bolivia in unhelpful ways."


ii There are 10,000 (estimates run as high as 50,000) Cuban gov't types in Venezuela, which is a solid base for Cuba to project its power towards the rest of South America, where it already has longtime espionage and clandestine networks to work with.

iii. Chavez has been increasingly vocal, and active.
iv. Colombian intelligence officials have gone on record as saying that Chavez is feeding money to MAS. Bolivian officials expelled a Venezuelan military attache for giving money to MAS.

v. What Rumsfeld is saying is not that far off base, and is entirely plausible. Venezuela, with the cooperation of Cuban intelligence and/or military advisors, based out of Venezuela is helping MAS.

vi. But Schultz, completely avoids the topic of Venezuela and Cuban complicity in fanning the fires in Bolivia, and instead concentrates on the US's purported "complicity" with such things as multinationals investing in Bolivia's oil and gas industry. That is truly apples and oranges.

If you really want to see what I think about Cubans and Venezuelans in Bolivia go here:

http://bolicarreras.blogspot.com/2005/08/bolivia-rummy-gets-tough-with-chavez.html

and here:

http://bolicarreras.blogspot.com/2005/08/is-chavez-fidels-new-sugar-daddy.html

5:57 PM  
Blogger Dan said...

Boli-nica, I'm afraid if you insist on addressing your comments to people who "see Castro and Chavez as new revolutionary heroes" (you must be referring to a different Dan, because that sure doesn't describe me), your going to have a hard time finding people to continue reading through all of your roman numerals. Your comments are disappointing in a world that demands nuance.

6:51 PM  
Anonymous japaza said...

For newbies to this blog, go here first:

http://www.publiushpundits.com/?p=1308

and/or here

http://bolicarreras.blogspot.com/2005/07/
ngos-shenanigans-what-is-behind-bolivia_06.html

Dan, I think Boli-nica has a better understanding of what is going on than you. First of all, if you personally don't believe in Fidel and Chavez, you do swallow everything Jim writes with childish innocence, and he surely idolizes these two bastards.

Then, the fact that there are 10,000 Cuban guys in Venezuela, showing Chavez how to deal with opposition does constitute a threat for South America. Why? Because we know Chavez has unlimited resources (oil) to finance extremist guerrilla groups (FARC) and political parties (MAS), and, even more worrying, we know he will not hesitate in doing so.

While we are at it, it should also be interesting to note that this Democracy Center, which really is concerned in overthrowing legitimate governments in Bolivia, really takes care in picking up its writings. While it reports about the problems of buying bleach in Bolivia, with this ludicrous sense of urgency, there is not a single word on Evo Morales' trip to Venezuela.

SO, what do you expect from this blog, really? Just a pseudo-intellectual leftist who will fly back to the US, regardless of Bush & co., in case things go awry. You won't gain any interesting insight by reading Jim's crap.

KEEP THE GOOD WORK, BOLI-NICA!

4:09 AM  
Anonymous Anonymous said...

Anyone who visits the links boli-nica (or his alter-ego japaza) has provided will realize the level of vanished credibility, one look at those insult ridden postings and you will conclude two things; you wasted your time and their postings here do not warrant a response. Nice way of self advertising, it just doesn't work for everyone.

Excellent Posting Mr Shultz, we need to put this out there. Please continue your work.

10:50 AM  
Blogger Boli-Nica said...

Yeah Dan, your comments really have that special "nuance".

And you don't have blatant double standards..... Please.

So Rumsfeld is all "saber rattling" since he is "drunk on unjust war". Mind you all he has done is say the Cubans and Venezuelans are trying to destabilize Bolivia.

But, compared to Rumsfeld, in your view the Communist dictator of Cuba sending thousands of apparat members to South America is benevolent.

when comparing to Rumsfeld's and your take on Bolivia, the foreign presence is different: Cubans are in Venezuela cooperating with the democratically elected government there (and Cuba is hardly the power that Venezuela is, so we can assume such collaboration is truly desired, not strongarmed the way so much U.S. "cooperation" in foreign countries is);

That is astonishing!!!! You ascribe the worse motives to the U.S., and on the other hand come close to glorifying the blatant interventionism of a outside party to the area.

Even worse that this outside party, is an active proponent of an ideology whose tenets are unquestionably an absolute failure as economics, and leads to single party dictatorship politically.

11:06 AM  
Blogger Boli-Nica said...

By the way Dan, you seized on one point of my argument, but completely ignored my points challenging Schultz on his over-simplified and distorted comments on the erradication program. There is a lot to criticize about the U.S. Coca erradication program, but hearsay accusations about a sweetheart deal, is not the strongest point to challenge an entire program. If anything should be challenged, it should be the little flexibility in terms that the U.S. offered to Bolivia's government by the U.S. when it was trying to negotitiate with the Evo people.

11:18 AM  
Anonymous The_Bolivian_Osprey said...

Dan,

A world that demands nuance? Aargh!

The stench of such easy jargon pollutes the blog.

The retreat to nuance is a tired ploy: more often than not used as easy cover for blurred vision, foggy intellect, or just laziness.

Precise argument and clear thought are preferrable to an appeal to the morass of nuance.

1:33 PM  
Anonymous Javier F. said...

Why should we care so much about who influences whom? …I do care on what ACTIONS are executed by one over a nation I do care, Bolivia.

For all I care, Chavez and Fidel can give all the coaching and money they want to Evo. They have their on ideology and under democracy they have the right to have it and fight for it. What I wouldn’t approve is that money (don’t care the source) is used to pay individuals to go and do revolts…protest before your ideologies is ok (Bush’s nightmare at his Texan farm), but getting paid to protest (worse: block streets) for other’s interests…complete wrong. But of course, this has not been proven, is simple speculation, therefore is just information without evidence, and everyone should digested the best way they want it

For all I care, Americans can give all the coaching, money, aid, etc to the Bolivian population…they have their motivations for it, thank you for all the help. Do they finance bad things to happen in Bolivia??

Let see all the evils….world bank…did they forced us Bolivians to borrow money? Does Fidel borrows money from them? …don’t think so! We Bolivians decided to borrow money.

We Bolivians decided to deal with IMF…we are suckers of “aid”…and like any where, who loans money has power to condition how to get his money back.

We Bolivians decided to deal with Bechtel and the other many oil companies…didn’t we??

Hold on! Who is “we”?

Of course, my representatives….those that I elect with my vote to do all this evil.

Wait, I did not vote for Goni to do things I don’t like.

When I vote, there are many I wouldn’t vote for…but then I find out, my vote was negotiated in such a way that, yes, the one I didn’t want is in bed with my choice!!

Ok, so then the system is wrong…another debate right.

Of course, to vote….I need to get informed.…hence, I read this blog.

But then I found things like “The illegal contracts (they were never approved by the Congress, as required by the Constitution)”…why are we judging and saying this contracts are illegal??? The issues is on debate…many experts say they are illegal, many say they are not…this is even going to go to international courts…we all know, the interpretation of this just popup absed on political cooking.

Ok, well…I can be ok with written communication inclined towards one position…but lets differentiate opinion, from facts….Better say…”those contracts, that I think are illegal,…”

Saludos Javier F.

2:45 PM  
Anonymous Paul V said...

A more in depth version of the article is posted here, as well as at PetroleumWorld.

3:25 PM  
Anonymous Anonymous said...

Javier, I believe it is a fact that the Bolivian constitution was violated by the contracts.

Specifically, the contracts are based on Decreto Supremo (Presidential Decree) 24806 of August 4, 1997 ('coincidentally' two days before Goni left office) and the 1996 Hydrocarbon Law.

The aforementioned law afirmed the Constitution's decree that the land and everything beneath it, and especially hydrocarbons and minerals, are the exclusive property and domain of the state. They can be exploited through joint-venture contracts following the 1990 Law of Investments.

D.S. 24806 contradicts both the law and constitution in giving explicit property of hydrocarbons en 'boca de pozo', at the mouth of the well, to the foreign oil companies. This is simply illegal because neither the reserves nor any extension of Bolivian soil near them can be granted as property to a foreign entity.

The contracts may or may not conform fully to the 1990 Investment Law, the Hydrocarbon law, and other clauses of the Constituion. However, as they were negotiated, drawn up, and signed under the 'legal' framework established by an illegal Presidential Decree, they are not, well, legal.

Congress was not needed to approve these contracts explicitly. And it did not, indeed it could not, approve of the inconstitutional D.S. 24806.

This is the reasoning, not opinion, just fact, that led the Constitutional Tribunal to declare D.S. 24806 (and by proxy any contract based on it) illegal.

(in spanish)
http://www.tribunalconstitucional.gov.bo/resolucion8422.html

As far as the role of the Tribunal Constitucional, I believe this is a very interesting subject. It has mostly embraced reactionary tendencies with regards to the Constituent Assembly that would be expected since it was created and chosen by the first Goni administration. However, I sometimes wonder if good old Goni didn't intend all along to screw the petroleras by giving them illegal concessions.

All that being said, I appreciate where you are coming from, that is why I read this blog too.

4:09 PM  
Anonymous Anonymous said...

It should also be said that ex-President Mesa abrogated D.S. 24806 for this very reason.

However, as with other issues, he did not have the balls to make his deletion retroactive.

4:11 PM  
Blogger Boli-Nica said...


D.S. 24806 contradicts both the law and constitution in giving explicit property of hydrocarbons en 'boca de pozo', at the mouth of the well, to the foreign oil companies. This is simply illegal because neither the reserves nor any extension of Bolivian soil near them can be granted as property to a foreign entity.


Not so fast.The way this was set up was, all the oil and gas entities operating in the country are "Bolivian", their facilities are owned by companies, in which the Bolivian pension fund owns half the shares.

So, to some extent it does fall within the law.

And even the original law contained an "out" clause, permitting foreign companies in. The right to exploit these resources, could be done through "limited life, concessions and contracts, to mixed partnerships of joint operation or to private persons, in accordance with the law."

in the new law:

"The principal of a shared production contract, operation or association is obligated to give the State the totality of the hydrocarbons produced in the contractual terms that were established by it ”

That means that the government does own the whole thing at the well, but does have the authority to enter into contracts for joint ventures, where it can assign a percentage of the production away, while "taking" its ownership share of the resources that it contracted for.
Under that view, royalties are what it "takes" back from the contracts. Under the new royalty regime, all that happens is that the contracts "migrate" to fulfill the new legally approved percentages.

5:02 PM  
Blogger Boli-Nica said...

Oops, I forgot to include the excellent article where I got the info from:

http://www.petroleumworldbolivia.com/editobolivia081805.htm

5:03 PM  
Anonymous La Mama said...

oh you boys Bol-Nica and Japaza, why do you complain so much? I see how much you love this blog, my gosh you must spend hours working on all your little comments.

admit it, you think you might actually have found a place where ten or twelve people will actually read your writings (or at least skim the really long boring ones).

If you really didn't love the blog you wouldn't spend half your day reading it.

a little advice from someone older. Think about getting jobs or girlfriends. Really, either is a better use of your time, don't you think? Maybe go outside once in while too.

But do keep your comments going. I think all the self-righteous ranting is funny. just don't take yourselves so seriously. The fate of the world is really not going to be much affected by what you post here.

Have a nice weekend everyone.

5:42 PM  
Anonymous Anonymous said...

In any case, PROPERTY of the land or the hydrocarbons under it cannot be granted to a foreign OR domestic entity, it must remain always under exclusive ownership of the state.

However, I did misread as the link I posted was to the lone dissident on the T.C. The D.S. 24806 was actually declared constitutional, by the argument that the contracts are joint-ventures between the state and another entity and they expire after 40 years, thus the property of the hydrocarbons is not ceded to another party 'forever', and indeed only once above ground is the oil/gas theirs. I find this argument specious at best, since the value is clearly in the gas and oil and the 'boca de pozo' distinction is really a joke.

Though I was wrong in the basis for my argument, nonetheless, the contracts are FACTUALLY illegal since the T.C. has since declared that only Congress can approve such contracts.

5:47 PM  
Blogger Editor said...

Rumsfeld's credibility on "bad guys" has never been good.

Look at his friends.

http://www.fantompowa.net/Flame/rumsfeld_saddam.jpg

7:30 PM  
Anonymous Paul V said...

I'd like to get back to this article for a minute, as it brings up a number of conflicting points.

First off, Schultz' claim that Rumsfled "joined in the Bush administration’s steady drumbeat of blaming Fidel Castro and Hugo Chavez for the last five years of Bolivian political turmoil" seems to be a bit overstated. The article states:

"Very clearly in the past year we've seen a return of an aggressive Cuban foreign policy," said one US defense official, who spoke to reporters traveling with Rumsfeld on condition of anonymity.

"The Cubans are back with a big game," he said.

The officials said Cubahas reactivated its underground networks throughout the region, particularly in Bolivia where the government collapsed in June in the face of mass protests led by Evo Morales, a coca grower and leader of the leftist Movement Toward Socialism.
...
"A guy [Chavez] who seemed like a comical figure a year ago is turning into a real strategic menace," the official said, also speaking on condition he not be identified.


So the Bush administration seems to be allowing that significant Cuban and Venezuelan involvement in Bolivia has been limited to only the past year, not the past five years.


The article is less clear on who is playing the dominant role. On the one hand, it is the Cubans:

"The evidence suggests that Bolivia really is more of a Cuban project so to speak," the official said.

"To the degree that subversive activity is going on and they're trying to wield political influence, it is really the Cubans. Venezuela is certainly providing funding and some morale support," he said.


But then it says:

"We see [Chavez] trying to strangle pluralistic institutions of the country at home and then abroad, we see him moving aggressively in Bolivia, other places, with the Cubans," [a defense official] said.

However, moving aggressively might mean financial and moral support only, according to deputy assistant secretary Roger Pardo-Maurer as quoted in the George Gedda AP article:

"There is no question" that Venezuelan President Hugo Chavez is "providing money and moral support" for opposition forces in Bolivia, who are led by a populist congressman, Evo Morales. While Chavez provides the resources for the Bolivian opposition, Cuban President Fidel Castro provides the direction and organization, Pardo-Maurer said.

and reiterated with

Venezuela is certainly providing funding and some morale support," he said.

in the Defesa@Net article.

Yet in the Gedda article Pardo-Maurer said Cuba and Venezuela have targeted many other countries in the hemisphere besides Bolivia. "There are subversive projects going on everywhere else," and they seem to be primarily financed and organized by Venezuela, he said.

This is reiterated in the Defesa@Net article:

"We see him trying to strangle pluralistic institutions of the country at home and then abroad, we see him moving aggressively in Bolivia, other places, with the Cubans," [a US defense official] said.


Interestingly, the officials said Cubahas reactivated its underground networks throughout the region. Reactivated what underground network? And how large a network? And how large a network in Bolivia? It seems unlikely that a large Cuban network has been laying dormant in Bolivia until just last year.


Attending the session, which lasted some 90 minutes, were key members of Duarte's team, including the defense minister and the chief of defense.

BTW, what is the difference between a Paraguayan "defense minister" and a "chief of defense"?


It's a concern to all the neighbors. There is an enormous indigenous population that stretches all up the Andes -- Ecuador, Peru even in Paraguay," the official said.

Why is the "indigenous population" such a concern? Because they are an oppressed majority? Because they are ignorant fools with a vote? Because they are militant disruptive bastards? Is Cuban and Venezuelan influence limited to just the "indigenous population"? Did the indigenous populations of Cuba and Venezueala incite the revolutions in those countries?


I don't have the answers to all these questions. But I do know one thing for certain. The U.S. Department of Defense speaks with forked tongue.

10:47 AM  
Anonymous Javier F. said...

That was exactly my point anonymous...you do have a good and logical way to understand these contracts are illegal, but at the same time, there are other experts in the issue that say they are legal, under the circunstances.

"Tribunal constitucional" said they have not been sign by congress...but currently those contracts, as far as i know, are still active and the petroleum companies want to negotiate friendly...but pretty much this will go to international courts.

Hey mama, let the kids vent, just filter the adjectives and passion and try to see if there is a good analysis supported by facts...who knows, maybe the next bolivian president (or other decision making) is reading and/or writting in this blog.

Saludos, Javier

1:06 AM  
Blogger Boli-Nica said...

Well this is interesting, Paraguay now says that 150 Cubans entered the country five months ago on "tourist visas" and no one knows their whereabouts!!!!

http://www.miami.com/mld/elnuevo/news/world/cuba/12405331.htm


Interestingly, the officials said Cubahas reactivated its underground networks throughout the region. Reactivated what underground network? And how large a network? And how large a network in Bolivia? It seems unlikely that a large Cuban network has been laying dormant in Bolivia until just last year.


Not necesarilly a "large network", but there have been Cuban agents -as well as collaborators- in Bolivia for years.
During the whole Che Guevara thing, Cuban intelligence was active in La Paz - some accuse them of actually selling Che out with the help of Bolivia's "mainline" CP. The officer who handed over Che's diaries to the Cubans was reputedly a Cuban agent, or was paid by the Cubans.

Don't underestimate Cuban intel, capabilities they are really good. They even had a mole inside the Pentagon's intelligence office - actually the top Cuba analyst at DIA. They were all over Mexico, at a time when both the CIA and the Cubans competed to recruit agents from within the PRI.

They have different types of agents - a network who serve the regime based on ideological sympathies, and can come from the overt Communist party, or who operate "covertly". Then you have other who have been bribed or blackmailed.

12:37 PM  
Blogger Boli-Nica said...

Just one last point on the contracts. These were declared "void" b/c they were not approved by the Congress. THIS view holds that Congress was supposed to ratify them, and did not. The contracts themselves might have been PROCEDURALLLY VOID, but not necessarily ILLEGAL per se, as the article strongly states. The Court did not decide on the merits of whether those rights could be assigned or not.

The other side of the coin, is that the legislature's own inaction for all those years, effectively "ratified" the contracts, and they were valid, until the new law passed the house.

That is what is going to hurt Bolivia in International Courts. Besides signing investment guarantees, Bolivia through YPFB acted with apparent authority to sign the contracts. The legislature did nothing to indicate otherwise for years. In reasonable reliance on these guarantees, and on certain contracted prices, the companies invested more than 3.5 billion dollars in the industry to exploit certain fields. Even if the contracts were somehow "void", inducing companies to come into the country to invest, having them invest, and then changing the rules is grounds for a finding against you.

In a sensible world, with sensible people, both sides would cut a deal. But the luddites and the know-nothings don't want anything to do with reality.

And I call B.S. on saying that it was all a Sweetheart deal. At the time, many people thought that Goni conned the Brazilians, who threw in a lot of government money to get the pipeline done.


And the 18 % royalty is the low end of total taxes paid, since there are VAT and financial transaction charges (among others) that will make the real rate of taxation higher, up to 25 percent according to some

2:57 PM  
Anonymous Anonymous said...

Javier,

I understand your point: a good case can be made for the 'international legality'-clearly they HAVE been operating de-facto for 8 years- of the contracts. It is very likely that we will get screwed in international court even though Constitutionaly, our highest court has declared them void until approved by los honorables. I confess I am not very interested in legality. To me it is nothing but a euphemism for oppression. However, in response to your original comment, I think you are reasonable enough to admit that Jim was correct to say that the contracts are, in FACT, illegal.

6:09 PM  
Anonymous Anonymous said...

here this guy is critizing american policy of democracy and war on drugs and all that bs but doesn't seem to critize the bolivan government which as far as i can tell doesn't do not much more than sitting around.

6:38 PM  
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