Bolivia’s fragile government gained temporary breathing room in Sunday’s referendum over the nation’s natural gas and oil reserves, but the “yes” vote also strengthened the position of Evo Morales and his Movement Toward Socialism (MAS) which can revise the measure that will be sent to the legislature on August 7.
In the run-up to the July 18 vote, radical Indian and labor leaders threatened boycotts and the burning of ballot boxes against a referendum that left out the option of state nationalization. Nevertheless, the referendum also meant a continued rejection of the free-market policies championed by the former president, Gonzalo Sánchez de Lozada, the University of Chicago economist who was driven into exile last October after police killings of nearly one hundred Indians who protested his rule.
The referendum, the first in Bolivia’s history, included five questions. Voters supported the repeal of the existing privatization law, the “recuperation” of “ownership of all hydrocarbons at the wellhead,” refounding of Bolivia’s state oil company to “take part in all stages of the hydrocarbon production chain,” and exporting gas that promotes domestic industrialization, with fees and taxes up to 50 percent of the value of production, with revenues primarily going to education, healthcare, roads and jobs.
Progressive critics assert that some seventy existing contracts with multinational oil and gas companies remain intact, but these interests were not able to mount an effective campaign against the reforms that were being proposed. On the right, the sentiment of many in the Bolivian business class was reflected in an essay by an American Enterprise Institute pundit in the July 9 Wall Street Journal declaring that the referendum meant economic suicide. The AEI analysis correctly pointed out, however, that a “yes” vote would mean “that President Carlos Mesa will have bought himself enough legitimacy to remain in office until the end of his term in 2007,” which most observers believe was the real purpose of the referendum, conceived as it was after mass rioting paralyzed the country last October.
Early returns indicated an 80 percent majority in favor of repealing the existing hydrocarbons law pushed in the 1990s by the hated Sánchez de Lozada (or “Goni”), whose political consultants were the star liberal Democratic pollster Stanley Greenberg and former presidential campaign manager James Carville. The Washington-based Greenberg firm represents British Petroleum, one of the multinationals with billions invested in Bolivia. BP supported the referendum, along with the International Monetary Fund (IMF) and the World Bank, as did US Embassy officials, because the possible alternative–an Indian-led revolution–was even worse.