Bolivia Innovates: Boyle Mariotte Gas Law Restated
Bolivia Innovates: Boyle Mariotte Gas Law Restated
by Toni Solo
The July 18th referendum in Bolivia is likely to be a shortlived, temporary setback for radical opponents of the government of President Mesa. Their call for a mass boycott failed. The government was able to promote an effective propaganda campaign and could also rely on legal penalties obliging people to vote. In effect, public dissent against the referendum and for a boycott was criminalized.
Many older voters feared losing State pension rights had they refused to vote. Public servants such as teachers, especially in rural areas, might also have faced sanctions affecting their jobs. Such is democracy in Bolivia. But despite the upbeat public relations gloss laid on by government representatives, close up the sums look bad for President Mesa and augur deeper political crisis if he fails to acknowledge what they mean.
The electoral arithmetic.
At 40%, abstention was twice that in recent general elections despite the same compulsory nature of the vote. Of the 60% of the elegible electorate who voted, spoiled and null votes made up well over 20% of the result. The National Electoral Council has made a preliminary projection of 10-15% of "no" votes for three of the referendum's five questions and over 40% "no" votes for the other two.
At the very least, that means far fewer than 30% of elegible voters actually support the Mesa government's proposals. Once the final count is in from all the rural areas, Mesa's support is likely to look even bleaker. The National Electoral Council will announce the definitive results on August 4th.
Even if 30% did really support the five-point policy proposals presented in the referendum, around 40 - 50% are most likely supporters of the policy of the main opposition MAS party led by Evo Morales who oppose President Mesa but approved the referendum. Their position is much closer to the nationalization demanded by the radical opposition than it is to the government position. Morales has said, "We want nationalization without confiscation or appropriation, because we cannot embark on adventures."(Bolpress July20th 2004)
So in the end, despite his factitious triumphalism, President Mesa probably has the solid support of only 15 - 18 % of the electorate, almost certainly less, for his proposals which by his interpretation stop short of nationalization. His interpretation coincides with the view of the oil multinationals. Not surprisingly, since Mesa seems to see his job as representing their interests against the wishes of the Bolivian people. A very large majority in the country support nationalization. But that option was not allowed on to the referendum ballot,
Mesa faces hard parliamentary and public conflict before being able to secure the legislation he needs to put anything like his referendum proposals into law. Regardless, ready evidence of the Mesa administration's bad faith came quickly after the referendum. Even prior to any parliamentary debate on the now binding requirement to change the current give-away Hydrocarbons Law, he has authorized increased cheap gas exports to Argentina.
This cosy deal permits the Spanish oil company Repsol's Bolivian subsidiary to sell gas to Repsol's Argentinean subsidiary, freeing Repsol Argentina's production for sale to Chile. The benefit to Bolivia of that Argentinean transaction is just 18% of the value of the gas. Comparisons are difficult for non-specialist industry outsiders, but a rough comparison between European energy producers and Bolivia in terms of their general tax regimes is instructive. UK government tax rates on oil and gas run at 50% with additional supplementary rates introduced when the Treasury deems necessary. That is in addition to normal corporation tax at 30%. Norway's tax on oil and gas has run at 78%. The equivalent of corporation tax there is 28%.
Mesa : facilitating oil multinational extortion
For Mesa the Argentinean deal is sweet. It allows him to pose as an upholder of South American solidarity - Bolivia nobly helping its Argentinean brothers. He can also pose as a stalwart Bolivian patriot refusing to sell gas to the traditional enemy in Chile.
Under the table things look very different. Mesa is permitting the sale of gas cheap through the Spanish mulitnational Repsol so Repsol's Argentinean subsidiary can sell its gas dear to consumers in Argentina and Chile. That also permits Chile to export gas to meet commitments with energy strapped consumers in California. While Presidents Lagos of Chile and Kirchner of Argentina wring their hands about the "energy crisis" in their countries, Repsol dividend earners party.
Like all governments anxious to promote the usual raft of failed neo-liberal privatization and deregulation measures, for the Mesa administration presentation takes precedence over facts. President Mesa has tried to frighten Bolivians with bogeyman stories, that international capital and institutions will shun Bolivia if the country fails to support his plans. These admonitions are unlikely to cut much ice with the country's poor majority. Putting on a brave face, Mesa finds himself hard up against the reality of their miserable conditions of material life.
What have the oil multinationals or the World Bank or the IMF ever done for Bolivia's dispossessed? They have mired them in unjust debt and used Bolivia's poverty to pressure successive governments into selling off Bolivia's resources cheap. As far as radical opposition leader Felipe Quispe is concerned, "... the struggle is going to continue, we are not stopping there, we haven't lost the war, though it may be so that we have lost a battle." (Bolpress. July 20th 2004)
The Boyle Mariotte Law. PV=k
The foreign forces arraigned against the Bolivian majority promise no respite in their efforts to control the country's gas for foreign consumption with as little benefit to people in Bolivia as possible. The line up includes Brazil's President da Silva, President Kirchner of Argentina, the World Bank, the InterAmerican Development Bank, Corporación Andino de Fomento (the investment and financial arm of the Andean Community), and the International Monetary Fund. The World Bank has a powerful hold over the Mesa government which needs up to US$120 million in loans to cover budget deficits this year.
Bolivia's referendum is one more of the many examples of the imperial version of electoral democracy. The formula never varies : "do what we want, or else...." What President Mesa's bogus "triumph" amounts to is a political version of the Boyle Mariotte Law. When imperial pressure increases, the volume of Bolivian gas decreases.
It is unlikely the Bolivian people will let it stand. They have precious little to lose. Mesa's dilemma is that of all neo-liberal snake-oil mountebanks, from sell-out politicians like Carlos Menem, Sanchez de Lozada and, increasingly, Lula da Silva to imperial carpet-baggers like US Trade Representative Robert Zoellick.
Fixated on short term profit for the elites they represent, they fail to deliver their fancy promises and end up facing massive popular protest. Then they have three fundamental choices - give up and leave the scene, like Sanchez de Lozada, try to keep stringing people along like Lula de Silva, or send out the army and police to crush dissent like Pinochet. It's unlikely to be long before Bolivia discovers which one President Mesa turns out to be.
- Toni Solo is an acitivst based in Central America. Contact via www.tonisolo.net