Evo Says the US Government is Trying to Kill Him

As Presidential declarations go, this one is certainly sure to get attention. A formal statement posted this afternoon on the official Web site of the Bolivian President charges that the US government is engaged in a plot to kill President Evo Morales.

Here’s a quick (and rough) partial translation:

The President Denounces the United States’
Organization of Teams to Follow Him and Kill Him

President Evo Morales denounced that the US organized teams to follow him and kill him, without achieving its objective and assured that the denouncements of conspiracy [to stage a coup against Morales] made by his colleague Hugo Chavez are “not a lie.”

The US Embassy rigorously denied anything of the sort.

I can see the Evo-bashers getting ready to feed on this one. To be honest, it does feel a little flaky even to me. To be clear, the US government has had its hand in more than one assassination (and failed attempts) of a number of country leaders in recent history – Allende in Chile, Diem in Vietnam, etc. But for all kinds of reasons it seems pretty unlikely that George Bush has issued an order to kill against Evo. If Morales has some clear evidence he’d better start showing it, I suspect.

Here’s what all this says to me:

1. The diplomatic caution that Morales seemed to be cultivating (especially toward the US) in his first couple of months in office seems to have been completely tossed to the wind. Contrast this statement, for example, with the initial careful treading over the revocation of Senator Leonilda Zurita's US visa in February.

2. It seems clear that Morales’ press operation is completely focused on its Bolivian audience and completely oblivious to how Morales is starting to look abroad.

3. The Bolivia government/US government relationship, always on shaky ground, has nose-dived quickly, dramatically, and unexpectedly – and on issues of images and rhetoric more than on real substance.

Is all this the result of things Hugo Chavez has been whispering into Morales’ ear? Is this Evo coming out of the closet with deep anti-Yankee sentiments? Is Morales political rhetoric aimed at the Bolivian people creating the unplanned byproduct of making him look more radical than he is to audiences abroad (i.e. he didn’t actually “nationalize” gas, he ordered renegotiation of the private contracts)?

It is true, as the saying goes, “Sometimes the paranoid are right.” But on this one I just have a hard time the US is looking to get back into (well, there was Che) the assassination business in Bolivia. I also doubt Pat Robertson has gone freelance.

Expect this headline to make the rounds everywhere Thursday.

The Evo and Hugo Show

One of the interesting things about having lived in and written about Bolivia for eight years is watching the foreign press that parachute in for a week or two, declare themselves Bolivia experts, and start publishing. Some get Bolivia and the story remarkably well and some don’t get it very well at all. And most, time has shown, tune into to whatever current angle on Bolivia is in vogue in the other foreign press.

And the story that is in vogue this week is the “Evo-Hugo Show”, the combination political/psychological analysis of the relationship between Bolivian President Evo Morales and Venezuelan President Hugo Chavez and what it means for Bolivia. That story is going to get even bigger over the weekend as Chavez returns to Bolivia, this time to join Morales in the coca-growing Chapare region before massive crowds of coca farmers.

What is the truth about the Morales-Chavez alliance?

On the one hand there are the conspiracy theories. Chavez is engaged in a not-so-secret plan to dominate South American politics and make the continent a “Bolivarian” beachhead of anti-US politics in the sole superpower’s political backyard (or “neighborhood” as President George Bush tagged it this week).

According to this theory, Chavez sent money and agents into Bolivia to help make Evo Morales president last December. He did this in cahoots was that wily old Communist, Fidel Castro who, according to a senior US Pentagon official, actually had agents in Bolivia that were activated to promote the protests over the Carlos Mesa gas law a year ago. Now Chavez is consolidating that power and he was the secret force behind Morales’ “gas nationalization” decree May 1.

Yesterday the Wall Street Journal added its reporting voice to the conspiracy theory, in a piece written by José De Córdoba and David Luhnow. According to the WSJ, Morales, “has aligned his country so closely with Venezuela's Hugo Chávez that it is sometimes difficult to tell where one government begins and the other ends.” The lead evidence presented:

During an April 25 session with India's Jindal Steel & Power Ltd., two Venezuelan experts whispered into the ears of their Bolivian counterparts and passed them notes, says Juan Mogrovejo, a representative of Jindal Steel who attended the meetings. Then the Bolivians hardened their terms, demanding that the length of the contract be cut to 20 years from 40. "The proposed contract changed radically," Mr. Mogrovejo says. Other companies have also expressed dismay at the new terms.

In other words, Venezuelan economic experts evidently came in and helped the new Bolivian government negotiate a better deal for the Bolivian people. That is worrisome – for foreign corporations who had hoped to keep negotiating really exploitive deals that took Bolivians for a ride. It is too bad Venezuelan experts like these weren’t at the table, along with Bolivian officials who cared, when the Bechtel water takeover deal was negotiated in 1999, or during the gas negotiations a decade ago. Bolivia would have more money in its treasury and close to a hundred people killed in protests against those deals might still be alive.

It is too bad that IMF and World Bank officials didn’t see their role in “economic assistance” as including helping Bolivia get the best deals possible in their foreign negotiations. Really, it is pretty hard to see the evil in the WSJ’s worrisome example of Venezuelan meddling.

The charge that Venezuela masterminded Morales “gas nationalization” decree is just plain silly. That demand came from the Bolivian people back when Chavez was still a young soldier in the Venezuelan army and it was the central campaign pledge by Morales in last year’s campaign. It is also a move that was endorsed by Economic Nobel Laureate Joseph Stiglitz in a visit to Bolivia this past week.

Silly as well as the WSJ’s description of, “Bolivia's decision to kick out foreign energy companies this month and nationalize its natural-gas reserves.” The decree clearly did not kick out the foreign energy companies, which is why they are still here. It basically said that the government intends to renegotiate all the contracts, aiming to get better terms for the Bolivian people. If the companies made such a declaration aimed at the government, the WSJ would probably have called it sensible capitalism.

On the other side of the coin in the Evo-Hugo debate are the cheerleaders of that alliance. They say that Chavez and his oil money are helping Bolivia stand up to the US and foreign corporations, just as Venezuelan loans to Argentina helped that country pay off its debts to the IMF and kiss the Fund goodbye. They see Chavez as a counterweight to a bellicose US government, setting a model of how oil revenue can finance health care, literacy and other basic services for the poor. They deny the charges that Chavez is involved in any scheme to centralize his power in Venezuela and continue as President for many years to come. They welcome the close embrace between he and Morales.

It is a debate, interestingly enough, that seems to be much hotter among foreigners looking at Bolivia and trying to analyze events here than it is among Bolivians who actually live, day to day, with the course of those events. I have yet to hear the “Chavez” issue raised by any of the many regular Bolivians that I speak with about the news every day – the lady who sells me eggs, the driver on my bus (the Trufi #5), the guy who tends bar where my daughter waits tables.

Here’s what I hear from them:

What about the people who aren’t indigenous, but aren’t rich either? What place do we have in Morales’ vision for Bolivia?

I think it is good that Evo issued the decree on gas, but let’s see what really comes out in these negotiations, no?

I just hope we stop having so many blockades and strikes. I need to work. We all need to work.

The Bolivians one hears stressing out about Chavez’ influence here are mainly opposition politicians trying to make hay out of it. The man Morales beat nearly two to one last December, Tuto Quiroga, told the WSJ, "We have become a colony of Venezuela." Aside from being the kind of wild exaggeration that one expects to hear on Fox news, it is also important to note, that whatever influence in Bolivian politics Venezuela is establishing, it is pale beyond words to the nearly outright control of economic policy that the US-dominated IMF and World Bank have had here for two decades.

The issue of any foreign nation wielding too much power in Bolivia is always a legitimate issue, especially in a country that has had its borders, its minerals and its national destiny raided and determined by foreign powers for half a millennium. But the debate on this topic seems to be less about whether there is foreign influence than about who is in and who is out. The US government and its media champions are understandably uncomfortable with the decline of US influence in Latin America and the rise of a counterweight with cash.

So now get ready for the photos, the headlines, and the official horror from some quarters as Chavez and Morales stand this weekend before throngs of coca farmers. It is, to be sure, the diplomatic equivalent of flipping up a large bi-national middle finger at the superpower to the north. Is it smart diplomacy for Morales and Bolivia? I doubt it. His Vice President, Alvaro Garcia Linera, and I had a conversation about this just before he took office. Chavez likes to piss off the US government for sport, it often seems. Bolivia had no interest in following suit. Its diplomatic moves, Alvaro said, would be made like moves on a chessboard, thought out clearly in advance for all the implications involved.

On the other hand, Bolivia, much to the dismay of some, is in fact a sovereign state and it can associate with any other nation and leader it cares to without a permission slip from Washington, or the Wall Street Journal for that matter.

Let us just hope, for Bolivia’s sake, that Morales is deepening that association for reasons that are strategic, solid and well thought out, and not just following Chavez into the arena of pissing people off for sport.

A Travel Warning for Visitors to Bolivia: Beware the Fake Tourist Police

Given how many foreign visitors to Bolivia read this Blog, I think it is important to offer the following travel warning. I also know two people personally who have fallen victim to this scam recently. Beware of the fake “tourist police”.

Below is a portion of a recent US State Department travel advisory. The gist is this. In both La Paz and Cochabamba there is a scam underway in which would-be robbers pretend to be “tourist police” to get unsuspecting visitors into a car and take them to fake police stations where they can be robbed. In virtually every case people caught in this trap are released safely. However, earlier this year, an Austrian couple was not so fortunate and was killed.

To be clear, Bolivia is a friendly place and generally among the safest countries you can travel in Latin America. But, beware, if someone approaches you on the street claiming to be tourist police – don’t fall for it. In Cochabamba there are two tourist policemen for the whole city and they never leave their office (apparently they mainly take reports about fake tourist police).

If it happens to you, just do what I did years ago when they approached me. Just turn and walk away (okay, well I also yelled "F@#% You" at them too, but that was my call). Do not get in the car with them.

State Department Travel Warning

According to press reports, criminals using the “false police” method focus on foreigners in areas frequented by tourists including bus terminals and tourist markets such as Sagarnaga Street in La Paz. The perpetrators will identify a potential victim and have an accomplice typically driving a white taxi offer taxi services to the potential victim. A few blocks after the potential victim boards the taxi another accomplice, pretending to be a recently arrived tourist, boards the taxi with the potential victim. With all the accomplices then in place, the “false police” stop the taxi, “search” the passengers, and rob the victim. As part of this scam, the false police may take the victim to a “false police” station. Read the full warning here.

Another News Quiz: Morales or Bush?

Please read the following statements below from today’s New York Times. Are they from:

A. An article by Bogotá-based correspondent Juan Forero about Bolivian President Evo Morales.

B. An article by Washington reporter Carl Hulse, about US President George Bush.

"[Recent events] fit the [Bush/Morales] administration's pattern of asserting broad executive authority, sometimes at the expense of the legislative and judicial branches.”

"This administration," [political scientist] said, "has very systematically and from the beginning acted in a way to interpret its executive powers as broadly as possible and to interpret the power of Congress as narrowly as possible as compared to the executive."

President Bush Frets About Bolivian Democracy

President Bush made some rare public comments about Bolivia yesterday, expressing his deep concern about the state of democracy here. Reuters reports that, in response to a question from a Chicago audience, about Bolivia and Venezuela, Bush declared, "Let me just put it bluntly, I'm concerned about the erosion of democracy in the countries you mentioned."

The AFP report of Bush comments shows him going even farther:

"I am going to continue to remind our hemisphere that respect for property rights and human rights is essential for all countries in order for there to be prosperity and peace," said the President. "I'm going to remind people that the United States stands against corruption at all levels of government," adding, "the United States expects the same from other countries in the neighborhood." And, in a jab at Venezuelan President Hugo Chavez, Bush added, “I'm going to remind our people that meddling in other elections to achieve a short-term objective is not in the interests of the neighborhood,"

Well, let’s just examine these comments for a moment in the context of something President Bush always has a hard time grappling with: reality.

On Democracy:

In Bolivia, that weak democracy, the President was elected last December with a 2-1 margin of victory. Mr. Bush famously took office after losing the popular vote and winning the Supreme Court Vote.

In Bolivia, the President recently kept his campaign pledge to initiate national recovery of Bolivia’s gas and oil reserves. In the US Mr. Bush isn’t doing so well on his pledges to be “a uniter not a divider” and to exercise fiscal constraint with the public purse.

On Human Rights:

In Bolivia, since Mr. Bush took office, more than 7,000 people have been arrested under a US-sponsored anti-drug law that puts people in jail without possibility of bail, even if they have never been found guilty of any crime. Bolivian prosecutors – until the new Bolivian government suspended the practice a month ago – have long received a salary bonus from the US embassy greater than their Bolivian civil servant salaries. To keep arrest figures high and climbing and to justify those US bonuses, those prosecutors have put innocents in jail by the thousands.

To my knowledge the new Bolivian government does not operate a torture center in Cuba, has not presided over the deaths of more than 25,000 Iraqis, and has not been admonished by the UN, the International Red Cross or other institutions for serious violations of human rights. President Bush cannot make similar claims.

On Meddling

I suspect if given the choice between the kind of “meddling” that Mr. Chavez has done in Bolivia (offering public support) versus the meddling recipe favored by Mr. Bush in Iraq (bombings, torture and 25,000 dead), my guess is Bolivians would opt for the first.

I think there have been times in US history when we were a nation that offered a moral example to others, even if we carried heavy faults at the same time. On democracy, justice, anti-corruption, human rights, and a host of other values, the Bush administration has pretty much destroyed whatever moral position the US once had in the world.

If I were asked to offer a translation of Mr. Bush’s comments, the most straightforward would be this one: Do what I say and not what I do.

Deciphering the Evo Code

In the media (Bolivian and foreign), in the social movements, in diplomatic circles, in corporate board rooms, the game has become the same one – trying to figure out what Evo Morales is really about and what he really plans for Bolivia. Here’s my current contribution to that newest of Bolivian parlor games – Deciphering the Evo Code.

Radical or Moderate?

At a superficial level, the debate since Morales landslide election last December has centered on the question, “How radical is he?” In the run up to his inauguration many reporters made hay about his quote (taken out of context) about being the US' “worst nightmare”. The Council on Foreign Relations in Washington used it as the title for my post-inauguration talk there in January (they meant Evo, not me).

On taking office, Morales suddenly seemed to take moderation pills. The US government’s representative at the inauguration told me the next day on the plane to the US that he had been surprised by the cordial hand offered by Morales and the new government. My Bolivian government sources told me the same thing about the US. Two weeks later George Bush was on the phone chatting up Morales (and according to one person privy to the chat, Bush was quite surprised to hear that Morales was a "socialist”).

Then on May 1 Morales issued his gas “nationalization” decree, sent Bolivian troops into oil fields controlled by foreign corporations, ramped up his rhetoric, and for a week seemed joined at the hip with Venezuelan President Hugo Chavez, the man who likes to call President Bush (accurately, I would argue) “Mr. Dangerous.”

So what is it Evo, radical or moderate? Are these mood swings? Is this the slow revealing of true colors previously hidden for electoral and diplomatic purposes? Here is another take on it. Evo Morales is a politician and, in terms of political skills, he is pretty good at the game, for now at least.

Nationalization Light

First, let’s have a look at that gas decree. In the next couple of days The Democracy Center will present a full analysis, offered up by one of our able gas researchers, Gretchen Gordon. Meanwhile, the fact remains that the decree itself is a far less radical step than what the foreign press has made it out to be (ie. a full-scale government takeover of foreign oil interests in the country. That astute student of global economics, Enrique the taxi driver in my neighborhood, summed it up pretty well. “It isn’t nationalization. If it were nationalization the foreign companies would have been tossed out of the country.”

That’s right Enrique. You want to know what nationalization looks like, look at the 2000 Cochabamba water revolt. Bechtel comes; Bechtel gets kicked out. No lingering relations, no prolonged negotiation, no compensation. The water and the facilities involved return to public hands (and Bechtel is forced to back away from its outrageous demand for a $50 million goodbye kiss). That is what nationalization looks like.

Morales decree is limited to five companies that were all created originally with Bolivian public funds and later sold off a majority controlling interest to foreign corporations, at bargain prices and terms that were indefensible, then and now. What Morales has proposed is not to takeover the companies, but through buy-backs, negotiation and other arrangements, to bump up the Bolivian government’s shares until the government has a 51% controlling interest. Some key parts of Morales’ decree are also just temporary, pending the six-month period in which the government and the companies are supposed to renegotiate the terms of the deal.

If Morales had applied the same scheme to Bechtel, it would still be here collecting fees from water users, just in partnership with the government.

Politically, however, it is an astute move. Bolivians who don’t follow the detail too close saw Morales as a strong President, standing up to foreign oil interests and keeping a campaign pledge. For Bolivians who do follow the details, Morales looks sufficiently cautious. Enrique says he thinks that the six months of negotiations is smart, “We don’t want all of the foreign oil companies suing us.” For Morales critics on the left, who now have the challenge of explaining the decree’s details and how it doesn’t really do what people think, their voices will be marginalized. I can hear it now, “Oh those people will never be satisfied.”

Changing Political Structures vs. Meeting Basic Needs

I think that the other real political challenge ahead for Morales is this one – how to balance the investment of his political capital on structural political change vs. meeting people's immediate needs. Political and social movement leaders are very focused on the July 2 elections for Constituent Assembly, the body that will “rewrite Bolivia’s constitution”. Here as well the watering down is easy to spot. Vice President Alvaro Garcia Linera, before he became a candidate, used to talk and write at length about an assembly elected by the people, not political parties.

Nevertheless, under the convening legislation backed by MAS, it is the political parties that will dominate the July 2 elections. MAS’ efforts to thwart possible competition from the social movements was clear. Political parties qualified for the July 2 ballot automatically. Citizen groups needed to collect 15,000 voter signatures in a few weeks, in a process that involved collecting thumbprints and identify card numbers for each voter. The main potential social movement competitors failed to make the ballot, including an effort by the leaders of the water revolt in Cochabamba.

Many, both here and abroad, fear that the Assembly could turn into, instead of a citizen-led process to remake the political structure, a MAS-dominated effort to solidify political power through structural changes in the political process. That, according to one US official I spoke with, has been enough to send more and more upper class Bolivians into the US Embassy in search of visas and in preparation for a potential exodus.

I think, for Morales and MAS, the danger of an exodus is far less real than the danger of focusing too much on changing political structures and too little on changing what matters to people’s daily lives. The risk Morales faces is the echo chamber of politics. To be sure, the people around him on a daily basis care a good deal about how the rules of the political game get rewritten. It is the game they play everyday and have to keep winning to hold power. That is true in any nation.

However, for people like Enrique the taxi driver, Lourdes who owns the store around the corner, and most of the Bolivians I deal with in regular life every day, what really matters is not politics but more basic things like: Do we have water? Is my kid’s school getting any better? What about the long lines at the public health hospital? Are there going to be more jobs?

The game of politics is seductive. It has to be a heady thing to issue a decree and then be in the foreign press non-stop for a week, and to rush off to Europe and duel with European heads of state (and a few Latin American neighbors as well). It is easy to fall into the planning and plotting of restructuring political power.

But soon enough the people will ask about water and health care and their kids’ schools, and the new government had better be able to show that it is committed and able to deliver those goods, as well as foreign attention and executive decrees.

Da Vinci Code for a Dollar

[Readers: We are in the final editing of a series of analyses regarding the new gas decree. Meanwhile, in honor of Friday afternoon, a treatise on the serious topic of movie going in Bolivia.]

Across the US today millions of people are going to fork over $9.75 for the honor of seeing the first day showing of the wannabe box office blockbuster, The Da Vinci Code. My older kids and I saw it here last night in Cochabamba, $1.90 a piece. If we’d waited for 2-1 night on Monday we’d have seen it for a dollar.

I like to go to the movies in Cochabamba. I like it for lots of reasons that made me not like to go to the movies when I lived in California. There is, of course, that it is cheap. A senior citizen going to a Tuesday matinee who has a relative working at the theater can’t even get into a first run flick for a buck. I mean really, in the US, don’t you ever feel foolish paying, to go to a movie, an amount that television preachers say can feed a family of five in Africa for 10 months? [Okay, perhaps I am exaggerating bit for effect.]

Also, taking my kids to the movies in San Francisco was such an undertaking. If we took the bus we had to leave an hour early to avoid being late. If we drove I had to find somewhere to park that two-ton rose-tope colored Toyota. Here, where we don’t own a car, the bus ride is a predictable 30 min., half that if I am late and grab a cheap cab. And move lines. We don’t have them, not even for The Da Vinci Code. Walk up, buy a ticket, follow the guy with the flashlight, sit down. Pretty simple.

Then there is the matter of food. In the US most theaters boast huge signs warning against bringing in ANY refreshments from the outside. I think some have installed popcorn detectors that you have to walk through now. When we were dating, my wife impressed me with her ability to sneak in beer in her deep coat pockets – a trick I think she learned in her native Buffalo NY.

Not in Cochabamba. There are dozens of women who make their living selling popcorn, fried banana chips, Coke, candy and all manner of things right at the cinema door. You can be munching on any of it even as you hand your ticket to the fellow at the red curtain.

Now, we don’t have a lot of movie theaters here in Cochabamba. Actually, we have three. There is the classic Cine Astor, where I once brought thirty small children from our orphanage many years ago to sit in the balcony and see their first film – a poorly dubbed version of The Lion King. The problem with the Astor is that the camera operator needs new glasses. I have yet to see a movie there in full focus. There is the fancy new cinema at the IC Norte supermarket. With two screens and padded seats it is like a quick trip to a small US cinema. But it isn’t for me. Too sterile. They even have a supposed “no outside refreshments rule” there but I never take them seriously. When I have gone there I always sneak in something.

Nope, for me it is the venerable Cine Avaroa on Calle 25 de Mayo. Biggest screen in the country, it occasionally proclaims. It might be the oldest too. Lots of room, films always in focus, and just a block away from the stands where, at night, you can buy a reasonably good take away pique macho for 80 cents US. The gray haired woman who sells tickets and the bald headed old fellow who takes them at the door have been in those same seats for a decade I think. You have to love a movie theater where you get quizzed about why you haven’t been there in a while. I confess, I have, on occasion, snuck away from work to catch the 3:30 matinee.

Now you need to know, having three movie theaters (four screens total) doesn’t mean we have four movies to pick from. Nope, in Cochabamba, more often than not, all the theaters have the same movie showing. This week and probably next, if you want to see something other than The Da Vinci Code you are probably out of luck – at the cinema at least. You can always walk over to the vast selection of bootleg DVDs over by the post office and take your pick of any for the equivalent of $1.10.

The illegal market is so brisk that movies usually show up here even before they reach the cinemas. The best quality copies are the ones that periodically display the words “For Academy Viewing Only, Not for Resale” on the bottom. I like the bad copies though. My daughter picked up one that was about a talking VW and midway through it, in the slightly blurred foreground, you could see a guy get up from his seat to go to the bathroom or snack bar. This one was videotaped on the sly in the theater.

Truth be told, I am waiting for our youngest, Mariana, to hit the age where she will, as her older siblings before her, think it is really cool to go to the movies with Daddy. I figure I need to wait till she’s five.

Oh yes, as for The Da Vinci Code:

1. Do not fork over $9.75 to see it. If you must go, then go to a multiplex where they don’t carefully guard the theater entrances and make it your free second film after seeing something better.

2. I agree with the NY Times review. What is up with Tom Hanks’ hair?

3. It is lucky that Ron Howard had those code-breaking special effects left over from (the better acted) A Beautiful Mind.

3. I think that the one change from the book that was a good addition was the arrival of Jesus at the end of the movie with a new Sermon from the Mount. “Blessed are those who read books without any significant meaning.” I hear that was Dan Brown's idea.

4. For code breakers, here’s my last word:

Osimsin Eebttt Si I Pheo Lssmiiopeb

A News Quiz for our Readers

Dear Readers:

Here’s a little something new that I though was worth a post. We bring you a small news quiz. Please read the excerpt below from this week's news and at the end, pick who you think wrote it by posting a comment:

For some time now I have been thinking, how one can justify the undeniable contradictions that exist in the international arena...Can one be a follower of Jesus Christ (peace be upon him), the great Messenger of God, but at the same time, have countries attacked. At what price? If prophet Abraham, Isaac, Jacob, Ishmael, Joseph or Jesus Christ (peace be upon him) were with us today, how would they have judged such behavior?

a. The President of the National Council of Churches in a public letter on the war in Iraq.

b. Former Vice-President Al Gore in a speech to a national convention of Methodist clergy.

c. President Mahmoud Ahmadinejad of Iran in a letter to President Bush.

d. Republican Representative Henry Brown Jr. of South Carolina in comments directed at President Bush inserted this week into the Congressional record.

e. None of the above.

Bolivia, Gas and the Media: In the Eye of the Beholder

It is safe to say that Bolivia has rarely been in the international press as much as it has been since President Morales’ May 1 decree calling for “nationalization” of the country’s oil and gas. News outlets big and small have jumped on the story and continue to give it daily coverage.

That is good news and bad news.

It is good news because it is indeed an important story, for Bolivia, for Latin America and for all energy using nations – which pretty much means everybody. It is bad news because not all the coverage has been accurate or insightful. The Democracy Center is working on a review of the recent news coverage – good, bad, and ugly – that we hope to have posted early next week. Meanwhile, I thought these two news stories that came out today illustrate how much subjectivity is involved in how this story is being reported, a reminder to be careful about believing everything you read on this issue.

Today’s topic: Are Bolivia and Brazil in the midst of a diplomatic meltdown over the Morales decree on gas (as we have noted earlier, Brazil’s national gas company, Petrobras, is the major foreign corporate player in Bolivia’s energy sector)?

Here’s how AP reported it this morning:

Brazil-Bolivia Relations Continue South

SAO PAULO, Brazil - Relations between Brazil and Bolivia sank to their lowest point in a century Friday, as the two sparred over Bolivia's nationalization of its energy sector and threats to seize Bolivian land held by Brazilian farmers. [Read the rest of the article here.]

And here is how Reuters reported the story this morning, on CNN’s Web site:

Brazil, Bolivia Ease Energy Tension

VIENNA, Austria (Reuters) -- The presidents of Brazil and Bolivia met on Saturday and toned down a row caused by Bolivia's decision to nationalize its energy sector, a key source of gas used in Brazil. [Read the rest of the article here.]

I am not criticizing either of these articles, but simply drawing attention that getting to the facts is no simple thing.

Gas and Bolivia: Nationalization = Negotiation

Since I arrived back in Bolivia early Monday morning I have gotten a flurry of media calls and emails asking for comment on President Morales’s dramatic May Day move to “nationalize’ Bolivia’s gas and oil. Reporters have been quite taken by images of Bolivian soldiers occupying gas fields and the rhetoric of the government declaring the nation’s gas and oil reserves to be sovereign property of the people.

To be sure, all this is a dramatic development in the ongoing saga of Bolivia’s #1 public policy issue. Friends and readers, it was intended to be dramatic. But let us not lose track of the big picture: At the end of the day Bolivia will develop its gas and oil through some kind of partnership between the Bolivian government and foreign oil companies. That’s just a fact. What is going on is a very high stakes negotiation over what those partnerships will look like. I don’t think you can properly analyze the events in the news unless you keep that in mind. Nationalization = Negotiation.

Nothing exemplifies that more than the twin headlines yesterday and today in the Cochabamba daily, Los Tiempos. Both days the paper led with the dialogue over gas between Bolivia and Brazil. Brazil’s s state-owned oil company, Petrobras, is the major player in Bolivia’s energy market, far more than any of the US, UK, or Spanish interests.

Yesterday the morning headline was based on the revelation that during Brazil-Bolivia-Argentina-Venezuela summit last week, Brazilian President Luiz Inacio “Lula” Da Silva supposedly told Higo Chavez and Evo Moreles, his Venezuelan and Bolivian counterparts, that Brazil was getting plenty tired of Venezuela’s deepening involvement in the Bolivia gas issue. Today’s headline reveals that Brazilian and Bolivian officials met all day yesterday to look at how to reshuffle the two nation’s gas and oil deals to reflect the terms of Morales’ nationalization decree last week.

Understanding what is going on here is as simple as our memories of our kindergarten sandbox.

If you don’t play they way I want you can’t play with my toys.

If you don’t play the way I want I won’t play with you at all.

Turn it into a negotiation with billions of dollars of oil and gas reserves at stake and it turns into:

Either be a partner in developing our gas and oil on our terms or we will just turn to other investors.

Either give us the control and profits we want or we will cutback on our investment.

Morales sends in the troops for a symbolic takeover of oil fields. Repsol, Petrobras and others announce cutbacks in their Bolivian investment. One is a flipside of the other. Of course the companies play that card. That is what corporations always do. Taco Bell threatened to move its corporate headquarters from California to Texas if California didn’t give them a tax break, a bluff lawmakers almost fell for. It is how the game is played. The job of governments is to sort out when the threat is real and when it is just a negotiating ploy.

It is also worth noting that Morale’s nationalization dramatics last week were probably designed more for his domestic audience, not a foreign one. How all those images would play in the foreign press (with the effect of making Morales seem more radical than he is) was, I suspect, a secondary concern if it was one at all.

Both sides are playing hardball and ought to. The stakes in this reshuffling of the cards on gas in Bolivia are enormous. A few modifications here and there in tax rates and the like translates into many millions of dollars.

In the end though, both sides – Bolivia and the foreign corporations – need the other and know they need the other. The corporations don’t want to walk away from the second largest oil and gas reserves in South America and Bolivia still needs investors and partners.

I believe, that despite the drama of the nationalization decree last week, the essential policy questions to watch for remain the same that they have been:

1. Who controls the volume of production and the price, foreign oil companies or Bolivia?

2. How will Bolivia and the companies involved share the profits – through taxes, royalties, etc.?

3. What is the appropriate role for the Bolivian government’s oil company (YPFB)?

4. How will Bolivia invest the funds it gets from gas and oil to benefit the people of Bolivia in the best way?

5. How will indigenous rights and the environment be protected?

6. How will all these arrangements be made transparent and enforceable so that what it says on paper becomes what actually happens in reality.

The debate over gas and oil in Bolivia, as dramatic and important as it is, remains what it has been from the start – a negotiation over what a new approach will look like, one in which the Bolivian people receive the control and benefits they expect from a key national resource under their feet.

A Visit to Catholicism Ground Zero

[A note to readers: I know that many of you are especially interested right now in news and analysis about President Morales’ move to “nationalize” Bolivia’s gas and oil. We’ll have plenty of that this week. A special caution to journalists -- before you write stories about how radical a move this is on Bolivia’s part, wait for the details. You’ll find that the decree issued last week is as much bluster as it is radical. Meanwhile, I offer this posting from Rome, where I have been visiting this week on the tail end of a work trip to Italy.]

This posting begins with a bit of personal disclosure. I am not a Catholic. I am not even a Christian of any other stripe. If you need a label go with this one: Jew who never practiced Judaism but once briefly flirted with a Methodist church in San Francisco because I helped start a homeless shelter there. Any impulse toward Christianity got quite beaten out of me, however, by the experience of serving as President of a Bolivian orphanage that also happened to be financed by US Christians.

I am, however, surrounded by Catholics, even in my house. My teenage daughter made the decision to go through confirmation when I took her to see Guadalupe in Mexico a few years ago, telling me proudly, “I have Catholic blood, just like Mommy. You don’t.” Of course my supposedly Catholic wife only goes to mass in Bolivia about once a year, which according to one analysis I heard makes her a Protestant.

In any event, all this personal digression aside, on Saturday I paid a visit to “ground zero “ of global Catholicism and I thought I’d offer up a special report.

Catholicism’s Ground Zero

When I am in Washington, riding the subway, I can always tell when we are getting near the Pentagon. The number of passengers in military uniforms shoots up dramatically. In Rome, as you near the Vatican, you get the same effect, except it is all about nuns and priests.

The Vatican seems to especially be on Rome’s mind this week, amidst a flurry of huge posters promoting the anticipated opening of the movie version of the DiVinci Code. Bookstores here have stacks of the novel piled up, in half a dozen languages, along with some knockoff versions. My favorite of the latter was one I spotted called, The Asti-Spimanti Code. I love publishing.

The first thing you need to know about visiting the Vatican is that it is a lot about waiting in line – really long lines that wind around the block – and at the end there is neither wine nor wafer awaiting you. Just the first of many opportunities that the Vatican offers to fork over large sums of money to see the inside. Entrance to the Vatican Museum, $16. The museum has more ancient relics than it can handle – Egyptian mummies, Roman statues, and paintings of all types (all types with Jesus in them). A friend of mine euphemistically noted that the Vatican has received many “presents” over the years, the kind of presents that participation in conquest tends to deliver.

Today was some sort of special anniversary for the Swiss Guards that are the official army/police force of the world’s tiniest nation-state. Actually I freaked a bit while in line, worrying that at the end I might get rejected for lack of a passport (which I failed to bring with me). No problem – all you need is the $16. In any event, the guards have very snappy uniforms with blue and gold vertical stripes and seemed happy to be having their 500th birthday party.

The Vatican is also very, very good at merchandizing. I think maybe the Disney people picked up a few tips here. At every little corner there is an opportunity to buy everything from art replicas, to special rosaries, to jewel encrusted crosses that sell for many hundreds of dollars. I don’t recall any references to jewel encrusted crucifixes in any parts of the bible I have read (The version I bought years back was used, purchased at a Haight Street bookstore, and the words “In the beginning” had been crossed out and replaced with “Once upon a time” in purple ink.). They must be in there though, somewhere.

The rock star, of course, of any visit to the Vatican is the Sistine Chapel. There is a really long line for that. But it is worth it. To get there you walk down a long and narrow stairway as a loud recording repeats itself over and over again in six languages, “No photographs please and no taking of video, and please be silent while in the chapel.” To be honest, it reminded me a lot of the experience of entering, with an equally packed crowd, the Haunted Mansion at Disneyland. There the repeated announcement (just in English) warns, “There are no windows and no doors so you have to find a way out!”

I spent my half hour in the Sistine Chapel sitting on a long wooden bench, stretching my neck backwards to fully study the masterpiece of ceiling that Michelangelo delivered up centuries ago working on his back. At the very center is the image we have all seen reprinted a hundred times, a gray-bearded and surprisingly buff God reaching out to touch the fingertip of an equally buff (and naked to prove it) “man”. If God really did create us in his own image and the paintings here are right, God really wants us to do a lot, I mean a lot, of working out.

As I stared respectfully up at the ceiling I noticed out the corner of my eye that not everyone was taking the “no photos” rule” too seriously, and periodically the voice level would rise enough to provoke the grouchy Italian guards to yell (interestingly, almost exclusively in English) SILENCE!

That was, apparently, not enough so the Vatican guards brought in the big guns. Suddenly out of the semi-silence a giant BING-BONG echoes through the chapel. The guards once again yelled, SILENCE, but this time so that we would all be attentive to a recorded announcement that came booming from some kind of hidden speakers behind Michelangelo’s masterpiece – in a voice so loud it was easy to imagine it was God himself. In six languages God told us once again to PLEASE BE SILENT IN THE CHAPEL. Interestingly, when God speaks in English she is a woman with a British accent, just like all the CNN anchors. The German God is a man. I am pretty sure that the Japanese God added in there somewhere a warning that those who were not appropriately silent would be struck by lightening. But my Japanese isn’t very good so I could easily be wrong on that.

It struck me during my time in Europe this week that Europeans spend a good deal of energy having a good look at what Europe used to be. Americans seem most preoccupied these days about proclaiming to the world what we pretend to be now. People in Bolivia basically just aim to get through the day and are happy when the trufi bus runs reasonably on time.

I am glad to be going home.

The Oil Company Spin Machine Shifts into High Gear

The curse of traveling (I am in Europe until Monday): CNN. During the run up to the Iraq War and during its early stages, CNN was a cheerleader for the Bush administration and too busy to ask any of the questions the media failed to ask – thousands of lives ago.

Watching CNN this week was a chance to see the oil company spin machine in high gear, and much of it aimed at Bolivia and Evo Morales' decree “nationalizing” oil and gas reserves (see Blog posting below).

There was the CEO of Shell, explaining the ridiculousness of calls for a windfall profits tax in the face of the exorbitant profits that Shell and other oil companies have been making as prices at the US pump soar over $3 per gallon. We use that money to invest, the dapper executive explained. And his views on the wave of nationalizations of oil and gas, including Bolivia's. Dell, they need us. They need our technologies and management.

So let us get this straight. Bolivia needs to turn over ownership of its gas and oil reserves to the likes of Shell in order to get access to their drills and refineries, and their high-paid executives. Too bad CN didn't have it together to ask if that was the same technological genius that Shell's subsidiary, Transredes, demonstrated in January 2000 when - after years of ignoring warnings that their pipelines were a disater waiting the happen - disaster happened. Millions of acres of indiginous farmland were destroyed along the Disaguadero River, leaving behind a trail of contaminated water, useless land, at least one dead child, and sheep born with birth defects like a cyclops eye and 25 centimeter tounge.

Shell – Technology for a Better Future.

Then CNN brought on Thomas Friedman of the New York Times to act as if he had just invented some new miracle theory that high oil prices and climbing revenues for oil producing countries also means increased corruption and conflict. People have been writing about “the resource curse” for years. I guess Friedman just decided it was worth using to advance his writing career a little more. He argued that countries like Venezuela were using oil revenues to finance “bread and circuses” for their people. Well Thomas, that and free medical and dental clinics along with subsidized food stores. What silliness on Venezuela's part, no?

Is he arguing that the people of Venezuela and Bolivia will really be better off when oil prices go down and the money declines, or if they give oil companies a bigger share? Hmmm, do you think there might be an option out there where the poor nations that produce oil and gas get to have the money and also become more democratic? But, that wouldn't make such an interesting op-ed for Friedman, would it?

Make what you will of the Bolivia decree this week but one thing is clear, the message. If it is under our ground it is ours and if foreign companies want a pice of the action they had better be prepared for real negotiations, not giveaways behind closed doors.

Morales “Nationalizes” Bolivia’s Gas – But the Devil Still Remains in the Details

At first glance the “gas nationalization”decree on Monday from President Evo Morales looks like a far more radical turn than many in Bolivia predicted. For months, since his January inauguration, Morales has surprised everyone from US government officials to members of his own political base by his apparent moderation (sparking notably different reactions). He cajoled coca growers to hold the line on new production. He refused to takeover the struggling LAB airline, despite massive protests by workers and their supporters. He tear gassed former friends.

Then, on May 1, International Day of the Worker (the closest thing the international left has to its own holiday) Morales issued a sweeping executive decree putting control of the nation’s oil and gas reserves firmly in the hands of the state gas company, YPFB. Then, to punctuate the move with some powerful symbolism the President sent in the the army to occupy 56 major oil fields and installations – a photo-op loved by the Bolivian left and which was seized upon by the international press as evidence that Morales has shed his sheep's clothing for something more along the lines of a Hugo Chavez costume.

Many Bolivians are rejoicing, others are worried, the companies are issuing warnings, and journalists (Bolivian and foreign) are working overtime to sort out what the decree really means.

And what does the new gas decree really mean? On its face it means that the state-owned gas company will have control, not only over getting the gas and oil out of the ground, but also will take charge of setting the volume of production and the price Bolivia is willing to sell it for on the market. It signals the new government's intent to ratchet up Bolivia’s share of oil and gas profits from the 50% (mas o menos) that was supposed to result from last year’s “moderate” gas reform law, to 82%. The Bolivian government will also take over control of the “privatization” shares held by the nation’s semi-private pension funds, a move aimed at getting control of a 51% controlling interest in companies currently held by the likes of Shell, Enron, Petrobras and others.

But, as always with the complicated gas issue, “the devil remains in the details”. Will this turn out to be what Morales' Vice-President, Alvaro Garcia Linera, once referred to as economic shock therapy from the left? Will it turn out to be a flurry of nationalist symbolism, coincidently at the official start of the campaigning for seats in he upcoming national Constituent Assembly to rewrite the constitution, in which Morales MAS party is seeking to amplify its political strength? Is it a new bargaining position by the Bolivian government, as it seeks to deal from a position of strength with foreign oil companies upon which it still depends for the investment required to actually get Bolivia's formidable oil and gas reserves out of the ground and to market?

It is also worth pondering this question. As a negotiating strategy (Bolivia has said it will renegotiate all contracts with foreign oil firms in the next six months), is tough rhetoric about nationalization a bad opening move?

We'll do our best to look for the answers to these questions in the days ahead – starting with this brief article below from Gretchen Gordon, a research associate at The Democracy Center who is part of a team leading our research on the gas and oil issue.

Jim Shultz

Bolivia’s Nationalization by Decree

by Gretchen Gordon

The smell of gas hangs strongly in the air as a crowd of flag-waving Bolivians celebrate outside the Petrobras Gualberto Villaroel oil and gas refinery.

A state worker clad in a tan work suit and hardhat props a wooden ladder against the front wall of the refinery just beneath the blue metal letters that read PETROBRAS, and ascends the ladder as the crowd looks on. He carries a laminated banner with the name, “Yacimientos Petroliferos Fiscales Bolivianos” or YPFB, Bolivia’s former state oil and gas company, essentially privatized in the mid-1990s through a process called “capitalization.”

“Take down the placard!” someone yells from the crowd. “Throw the letters in the trash!” someone else shouts, making a rhyme with the Spanish words.

As the worker struggles a bit to secure the banner over the blue letters, someone in the crowd observes, “No, they’re not going to take it down, just cover it over.”

As the banner is secured, someone calls out, “Que viva Bolivia! Que Viva la nacionalizacion!”

“Que viva!” the crowd erupts in response.

It’s Monday, May 1st, not coincidentally International Workers Day, and the Bolivian government has just declared the nationalization of oil and gas by presidential decree.

Though the “nationalization” and “recovery” of Bolivia’s oil and gas resources has been the main political issue in the country for the last several years, the Supreme Decree 28701 read publicly by president Evo Morales Monday came as a surprise to Bolivians and foreign investors alike. During the government’s first 100 days, several policy options have been floated regarding the restructuring of the oil and gas sector, however no clear comprehensive policy has been put forward until now.

Nationalization by Decree

Under the main goal of recovering “the property, possession, and total and absolute control” of oil and gas resources for the state, Decree 28701 contains five principal measures:

- Declaration of the state the agent empowered to commercialize, set conditions, volumes and prices both for internal consumption, export, and industrialization, and to take “control and direction” of all aspects of oil and gas production and distribution.

-Establishment of a 180-day time period for the renegotiation of contracts to bring them in line with the oil and gas law 3058 passed last year.

-Recovery of 51% of the shares of five capitalized companies, carved out of the state company in 1996.

-Increase of the tax and royalty level from 50% to 82% for companies operating in Bolivia’s two largest gas fields (Petrobras, Repsol, and Total).

-An audit of investments and earnings for all other oil and gas companies operating in Bolivia to determine their future tax rate and terms of operation.

While the discourse of the day is powerful, punctuated by the imagery of the securing of the country’s 56 oil and gas fields and two refineries by the Bolivian military, the real extent and impact of the government’s policy are not yet clear.

The recent oil and gas debate in Bolivia has shown that the term “nationalization” is open to definition and interpretation. Since Morales’ landslide electoral victory and “democratic revolution” last December, the government has consistently maintained that their “nationalization” does not involve expropriation, as traditionally understood by the term.

The decree in fact does not confiscate private infrastructure or expel foreign companies as some in Bolivia have demanded. The plan to recover 51% shareholding of the capitalized oil and gas firms is seen by some as insufficient, due to the fact that the holdings of these companies were under 100% YPFB control prior to the privatization of the mid-1990s. Others criticize that the new restructuring is too similar to the oil and gas law passed during the Mesa administration, rejected by social movements as inadequate. Jaime Solares, the leader of Bolivia’s Labor Federation has criticized the decree as a “partial” nationalization and renewed the demand for the state to take “absolute control” through confiscation without compensation.

At the same time, many see the government’s plan as the key to much needed economic development and as a means of recovering state sovereignty in a country that historically has been managed in the interests of foreign capital. “The recovery of the oil and gas resources is what Bolivia is counting on to be able to develop,” explains Roberto Delis, an YPFB employee participating in the refinery “takeover.” “Now those resources are going to be returned so that they serve Bolivia.”

The potential increase in government revenues through the elevation of tax and royalty rates from 50% to 82% will be very significant for this impoverished nation, but is an unexpected move by a government which previously was exploring more cautious options. The figure of 82% is also highly symbolic in that it is the inverse of the 18% tax rate put in place during the privatization process in 1996. What the companies were putting in their pockets as recent as a year ago, will now be what Bolivia keeps for itself.

Many aspects of the decree, however, remain to be determined and its true impact will depend on the details of its implementation over the coming months. The mechanism for the recovery of majority shares in the capitalized companies remains unspecified, as does the treatment of the 54 fields not impacted by the tax rate increase. The government calls the decree “flexible and consensual.” However, they have made it clear that those companies unwilling to play by the new rules of the game will not be allowed to remain in Bolivia.

Domestic business interests have reacted with concern, though without marshalling a strong challenge. Many support the concept of recovering greater state control, but fear economic instability and warn against the possibility of costly international litigation by transnational companies. The response by foreign investors has been strong, though still not completely bellicose. Brazilian President Lula called the move “unfriendly” while Spain’s Zapatero expressed his “profound preoccupation.” Brazilian Petrobras and Spanish Repsol are two of Bolivia’s largest foreign investors. Many companies, however, are keeping their comments reserved.

Government Takeover?

From La Paz’s main plaza, in a skillfully orchestrated event weaving together the nationalistic historical memory of Bolivia’s previous two oil nationalizations with the class themes of International Workers Day, President Morales addresses a crowd of thousands urging Bolivians to come together to defend this new endeavor.

Meanwhile, back at the Gualberto Villaroel refinery outside Cochabamba, Saul Escalera, the director of Industrialization for YPFB, addresses the crowd from the bed of a red pickup truck. Escalera explains:

“We will now engage in a symbolic entrance of YPFB technicians in which we will give official notification [to Petrobras] that as of this moment this refinery will be administered by YPFB.”

Escalera asks the crowd to refrain from trying to enter the refinery, warning that such an action could jeopardize the nationalization process. As the group of around fifteen technicians and representatives pass through the front gates of the plant, a military band strikes up the national anthem as the crowd sings. Young soldiers proceed through the gates carrying a giant Bolivian flag.

Returning back through the front gates after several minutes, with little fanfare, Escalera notifies the crowd, “We have now recovered this refinery...You may now all return home.”

With the waning notes of a brass band, Bolivia’s “nationalization without expropriation” advances, as has Morales’ broader “democratic revolution,” without violence or disruption, and to the great surprise of most onlookers.

The question which remains is how much will this nationalization secure a profound change for Bolivia: how much of the old system will be dismantled, and how much, like refinery placards, will more pragmatically, merely be covered over.

Gretchen Gordon is a research associate with the Democracy Center in Cochabamba, Bolivia. She is co-writing a study on Bolivia and its efforts to take control of its gas and oil reserves.