Bolivia: ‘nationalisation’ isn’t what it seems

Latin America is afflicted by the same loss of meaning in political life as we in the West are.

Josie Appleton

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Topics Politics

Last week the Bolivian president, Evo Morales, sent the army to occupy foreign-owned gas companies. In the UK Guardian, Roger Burbach opined that this was a president ‘dramatically reshaping his country’s destiny’, proof that there was a ‘radical bloc of nations in Latin America that are no longer subservient to the US’. The New York Times traced the inspiration for Morales’ actions back further still, to Bolivia’s humiliation at the hands of its neighbours in conflicts over natural resources in the nineteenth and twentieth centuries (among others, it lost its coastline to Chile in the 1880s, and a chunk to Paraguay in the 1930s Chaco war).

Morales himself used the language of the past. ‘The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources’, he said. But it is the overproduction of historic symbols that suggests that something new is going on.

The seizures occurred on 1 May, international worker’s day, on the hundredth day of Morales’ office. He presented the takeovers as the third and final wave of nationalisation: ‘The Spanish, the North Americans, the Europeans looted the tin, the silver and the natural resources. We should recognise that in 1937, under the leadership of the armed forces, petroleum was nationalised for the first time, the second nationalisation was carried out in 1969 with the intellectual Marcelo Quiroga Santa Cruz, and his struggle continues today.’ According to the Bolivian newspaper La Prensa, Morales is now planning to follow the third nationalisation up with a ‘second land reform’.

Bolivia’s nationalisation shows just how definitively times have changed. Some say the West has given up on left-wing politics because we are all happy with what we have: when everybody has iPods who needs barricades? Bolivia gives the lie to this analysis. Here is an impoverished country with a restive population demanding improvements to their lives. Yet Latin America too is afflicted by gesture and personality politics, and is struggling for words to express people’s aspirations.

The first thing that was odd about Morales’ May Day actions is that nobody knew what they meant. He announced the nationalisation of 15 foreign-owned companies and sent soldiers and tanks on to those companies’ lawns to unfurl Bolivian flags – yet the response to this dramatic gesture was a quiet puzzlement. Experts were scrambled to explain. ‘No one’s talking about nationalisation in terms of grabbing assets’, said John Crabtree of Oxford University. ‘In the case of Morales [the word is] being used ambiguously, I think’, said Crabtree, speculating that the Bolivian president was merely seeking a renegotiation of contracts with foreign companies.

Nationalisation was a strategy beloved of Latin American populist leaders, such as 1930s Mexican president Lázaro Cárdenas or 1970s Chilean president Salvador Allende. Foreign companies were booted out, with or without compensation, which often resulted in reprisals as international capital bit back (Mexican oil was boycotted by the USA, and Chile got its CIA-backed Pinochet coup). Yet in Bolivia, neither left nor right is playing their usual part.

Morales didn’t really punish foreign capital. As one Brazilian noted on the World Socialist Website, the fact that companies were being given 180 days to renegotiate their contracts meant that Morales could well cut a deal (safely after the Bolivian elections). Certainly, the presidents of Brazil and Argentina (the two countries with the largest gas company assets in Bolivia) emerged smiling from a meeting with Morales and Venezuela’s firebrand president Hugo Chavez. After the 180-day period, natural resources would formally lie in the hands of the Bolivia state gas company, YPFB, but foreign companies would be free to operate and draw profits as before.

The new temporary terms, from 50 per cent to 82 per cent tax, sound severe, but this can be seen as a regularisation of gas prices: Bolivia had signed a lot of its gas deals at a time when prices were low, and now prices have gone up. One Bolivian paper reported the Chilean view that La Paz was now merely charging Brazilia and Buenos Aires the ‘market price’. The head of YPFB, Jorge Alvarado, has noted that even on those terms foreign firms will still be making a profit of 20 to 25 per cent.

But foreign capital is also proving more quiescent than in the past. Many claim that there is an American plot to dominate Latin America on a par with the CIA-backed coups in the Cold War, but the USA has actually resigned itself to a hands-off role. A sign of its declining influence comes in the fact that this year, for the first time, the USA failed to get its chosen nominee for the Summit of the Americas. The USA has sought negotiation rather than confrontation: the US ambassador to Bolivia offered the olive branch to Morales when he entered office, emerging from one March meeting saying: ‘we have a constructive dialogue with the government of Bolivia over a wide range of themes and mutual interests.’

Gas companies are prepared to tolerate Bolivian tanks on their lawns, banners reading ‘Nationalised: the property of Bolivians’ hanging over their property, and to pass their production through the Bolivian state oil company. The Enron-Shell consortium reportedly announced its ‘respect for the sovereign decision of the Bolivian government’, and Brazilian President Luiz Inácio Lula da Silva defended the ‘rights of self-determination of nations and of the poor people of Bolivia’.

This is a time of pragmatic and shifting alliances. Many talk about a new ‘radical bloc’, composed of Venezuela, Bolivia and Cuba, as if this were a pseudo-Soviet alliance. These countries are certainly building trade and relationships of economic cooperation, with Venezuela investing in Bolivian social projects and them all sorting out favourable trade deals; and Chavez and Morales have both used virulent anti-American rhetoric (Chavez called Bush ‘a monkey’ and ‘Mr Danger’, and Morales pledged to be America’s ‘worst nightmare’). But America is the biggest foreign donor to Bolivia and the biggest customer for Venezuelan oil. In reality, this is a time of contradictory alliances, which are formed and reformed by the week. The Brazilian and Bolivian presidents shake hands and smile while Bolivian soldiers occupy the Brazilian state oil company.

The words and symbols of politics are chucked about liberally, leaving little trace. Political rhetoric seems to exist on a different plane to political action. ‘Nationalisation’ once meant a major shift in capital ownership, the state direction of industry and the incorporation of mass unions: now it means, well, a fudging of power and discussions about new terms, but we’ll have to wait 180 days to find out for sure. Tanks on lawns and national flags unveiled on gas companies would have once sparked major diplomatic incidents, or wars that meant the loss or gain of territory: now everybody carries on as if nothing was happening, with the receptionist at one occupied refinery saying that the soldiers are ‘guarding things…. Making sure everything’s in order. That’s all we know’.

Political language has become more extravagant as it has been emptied out. Contrast Fidel Castro’s tight-lipped aloofness towards the USA – after decades of economic embargos and hostilities that at one stage approached nuclear war – with Hugo Chavez’s fiery rudeness, while his country continues doing business with America. Political rhetoric is a kind of sop to the people, seen as necessary to maintain stability in a disgruntled continent: ambassadors maintain relations behind the scenes while the president blows off steam in the streets.

Democratic and revolutionary rhetoric flies around, too. Every political imitative is prefixed with ‘the people’s’, as if this were Bolshevik Russia circa 1919. Chavez, Morales and Castro dubbed their exchange of goods and social assistance ‘the people’s trade agreement’. The operations chief for the Bolivian state energy company, Nelson Cabrera, said: ‘In this decree is the hope of the people.’ Morales announced that oil and gas were now ‘under the control of the Bolivian people’.

But many people feel little ownership of the decree. At first some Bolivians were heartened by the announcement, with one commenting: ‘For the first 100 days of his rule, Evo didn’t do the things he said he would. But this was much better. Now everyone is behind him again.’ Morales’ popularity ratings have gone up, and a strike planned for last week was called off. But now the Bolivian papers are anxious. Many led on reports about other country’s response to nationalisation, with one reporting a Brazilian official’s comment that if Bolivia lost Brazilian business it was tantamount to killing ‘the hen that laid the golden egg’. Another columnist in La Razon newspaper put the term ‘nationalisation’ in inverted commas. Many just said they hoped it would all turn out okay.

There is nothing to be mourned in the passing of old-style populism and nationalisation. Nationalisation was never a panacea for Latin American countries’ problems: it often resulted in a drop in production and leaky corrupt industries, which did little to relieve countries’ woes. Populists were pragmatists too: they would attempt to force down wages if the economy stalled, calling on people to make sacrifices ‘for the nation’. The strategy of nationalisation had proved to be moribund 20 years ago, so why be enamoured with its pale after-image now?

These old frameworks just cloud our vision and prevent us from seeing the challenges and tasks of our own period. Some in the West look to Latin America as a kind of comfort blanket, with poverty and revolution and all that, and they can just pitch in on the side of the good guys. Latin America is certainly restive: people have desires for a better life that go unanswered, and the elite has proven inept and decrepit. But the sobering fact is that all these fiery words ring hollow, and that Latin Americans too are struggling for ways ahead. Few believe that the terms ‘left’ and ‘right’ can help us understand the machinations for the Labour Party leadership or the Tory Party leader’s bicycling, dog-sleighing efforts here in the UK. Yet many talk about Latin America as if the Cold War was still on.

A genuine solidarity would be to realise that, when it comes to the problems of politics, Latin Americans are in the same boat as Europeans and Americans. The challenge of ridding ourselves of delusions, and attempting to develop a new politics that can adequately express our aspirations, is one that applies in Bolivia just much as in Britain.

(1) Morales is taking Bolivia out of the shadow of the US, Guardian, 8 May 2006

(2) History Helps Explain Bolivia’s New Boldness, New York Times, 7 May 2006

(3) Morales’s nationalization in Bolivia: Who got stabbed?, World Socialist Website

(4) Gobierno alista el lanzamiento de la segunda reforma agraria, 8 May 2006

(5) Bolivia orders troops to seize gas and oil supplies, Guardian, 2 May 2006

(6) Morales’s nationalization in Bolivia: Who got stabbed?, World Socialist Website

(7) En Chile ven con esperanza la nacionalización boliviana, La Razón, 8 May 2006

(8) Q&A: Bolivia’s gas takeover, BBC News, 3 May 2006

(9) Morales’s nationalization in Bolivia: Who got stabbed?, World Socialist Website

(10) How Morales took on the oil giants – and won his people back, Guardian, 6 May 2006

(11) How Morales won his people back, Mail and Globe, 6 May 2006

(12) Brasil cree que Bolivia sin acuerdos tendrá graves problemas, La Jordada, 9 May 2006

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Topics Politics

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