Gas Wars Flare Up in Bolivia

Federico Fuentes May 25, 2005

p6 gas warsLeft with no more cards to play, Bolivian President Carlos Mesa succumbed to passing the country’s controversial new gas bill on May 17. With Bolivia’s poor once again hitting the streets, clamoring for the nationalization of gas, many believe it will be game over for Mesa.

Attempting to stop the passage of the new gas bill through parliament over the past eight months, Mesa earlier threatened to resign three times and to push forward elections by two years. He also called for numerous national meetings between government, business and the social movements. However on May 5, when the house of deputies modified and approved the bill that was passed by the senate in March, it was left on the table for Mesa to sign.

The new law imposes a 32 percent royalty tax on top of an exploration tax of 18 percent. This falls short of the proposed 50 percent for royalties alone that half of Bolivians supported in the June 2004 gas referendum. The house of deputies also watered down an article forcing all current deals onto new contracts in line with some of the new rules, before passing the bill on May 5.

The social movements decided to boycott a national summit with government and business leaders set for May 16, the day before Mesa’s deadline to sign the bill. Instead, they initiated two marches, from El Alto and Caracollo near Cochabamba, which have become the two organizing centers for Bolivia’s powerful protest movement. Claiming it would be “suicide” to support the bill, Mesa passed it on to the right-wing president of the parliament, Hormando Vaca Diez, to sign, hoping to quell public protest.


The latest protest marked a radicalization, adding two further demands to the push for nationalizing the gas – for Mesa to resign and for parliament to be shut down. Chanting “Mesa, traitor, we want your resignation,” more than 100,000 residents from El Alto marched down the hill to La Paz on May 16, creating a human snake for the entire six kilometers between the edge of El Alto and downtown La Paz. Initiated by the recently formed Commission for the Defense of El Alto’s Dignity, which brings together FEJUVE (the body that unites around 600 neighborhood committees), COR de El Alto (the Regional Workers Central of El Alto) and El Alto’s federation of trade unions, the rally was also joined by the COB (Bolivian Workers Central).

Reaching La Paz, the protesters headed for Plaza Murillo, where the presidential palace is located. Protesters and police clashed and tear gas, rubber bullets and rocks left several injured on both sides.

Two days later, 1,000 miners from El Alto along with the COB returned, determined to shut down parliament, as clashes once again ensued. Parliament was suspended and the next sitting date set for May 31, although the venue is uncertain. Meanwhile, numerous road blockades were established along main arterial roads from La Paz, and teachers entered the second day of their three-day strike. On May 20, teachers and university students joined miners and the COB in street protests in La Paz, as El Alto staged a 24-hour general strike.

The powerful Movement Towards Socialism (MAS), led by cocalero (coca farmer) organizer Evo Morales, began a 190km march from Caracollo to La Paz on May 16, aiming to reach the capital by May 23. Under the banner “unity of the Bolivian people for our hydrocarbons, a Constituent Assembly and autonomy for all sectors,” the march brought together some 3,000 cocaleros, peasants, indigenous Aymara organizations and workers from trade unions associated with MAS, with many more expected to join.


At the heart of the controversy surrounding the new bill is who should control Bolivia’s gas reserves – the second largest in South America. Between 1996, when Bolivia’s previous gas bill was passed, and 2002, neoliberal presidents Gonzalo Sanchez de Lozada and Jorge Quiroga signed 76 contracts favoring 12 transnationals, including Enron, Shell and British Petroleum. The corporations bought the gas at well below market value and sold it back to Bolivians at 12 times the price.

The bill followed a tumultuous 19 months after a popular uprising ousted president Lozada in October 2003. This “Gas War” between the gas transnationals, the IMF, the World Bank and U.S. and Spanish governments on one side, and Bolivia’s poor, indigenous and working-class population on the other, has intensified in the poorest country in South America.

None of the key social forces are happy with the new bill. The gas transnationals and the U.S. government immediately announced their opposition. Even before the final bill was signed, Randal Quarles, the U.S. Treasury Department’s assistant secretary of international affairs, was quoted by Reuters on May 7 saying the U.S. was “worried” by the new law that would surely “inhibit foreign investment.” Many of the gas transnationals have begun or threatened legal proceedings against the government, regarding the new law as “confiscatory” and illegal as it threatens the profits guaranteed to them under the previous law.

This article is excerpted from the Green Left Weekly

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