Sunday, May 04, 2008

Bolivia's richest region votes for autonomy

Santa Cruz, Bolivia's richest region, has voted on a referendum to demand greater autonomy from the country's central government.

More details from Reuters:

"SANTA CRUZ, Bolivia (Reuters) - Bolivia's richest region of Santa Cruz voted overwhelmingly for autonomy on Sunday in a vote widely seen as a rejection of President Evo Morales' leftist reforms, exit polls showed.

The vote was the first of four referendums on greater autonomy from central government being planned by Bolivia's eastern lowland provinces, deepening a divide between Morales' supporters and the conservative opposition.

According to the pollster Focaliza cited by local television, Santa Cruz residents voted 86 percent in favour of autonomy and 14 percent against. The result had been widely expected because Morales backers vowed to boycott the polls and the exit polls did not estimate turnout."

While Evo Morales has rejected the referendum's legitimacy, Reuters notes that the vote could force his government to negotiate with Santa Cruz and other pro-autonomy regions.

What is the motivation behind Santa Cruz's vote for autonomy? A desire for manage its own finances and secure greater control of the area's natural resources, which includes rich farmland and large reserves of natural gas.

"The historically unstable country's eastern areas are home to vast natural gas reserves, the second-largest in South America and a key supply source for Brazil and Argentina.

Santa Cruz also has rich farmland and its population has grown fast over the past 40 years, with Bolivians from the highlands seeking a better life due to its growing economy. It is now home to a quarter of Bolivia's some 9 million people.

Morales, a close ally of Venezuela's leftist President Hugo Chavez, sees the referendum as a bid to destabilize his government, engineered by conservative rivals who oppose his efforts to break up large land holdings and empower the poor, indigenous majority."

You would not expect the regional landowners to be too excited about the government's plans to expropriate their ranches for land redistribution schemes, now would you?

But, as the New York Times reports, some of these land tracts may have been acquired in the past by force or other "illegal means". Brazilian landowners of large land tracts have been the target of past proposals for land redistribution schemes.

And as Bloomberg points out, Morales has big plans for the country's energy sector as well. Of course, investment in the country's industry has dropped off a bit since his intentions became known.

"Morales's efforts to re-take control of the country's energy industry, which include forcing foreign companies to renegotiate their contracts, have led to lower investment amid energy shortages in neighboring Argentina, Brazil and Chile.

Investment in exploration and production in Bolivia's oil and gas industry fell to $149 million last year from $650 million in 2002, the lowest since 1996, according to the Santa Cruz-based Hydrocarbons Chamber. The chamber's members include Petroleo Brasileiro SA, Total SA, and BG Group Plc.

On May 1, Bolivia's national Labor Day holiday, Morales decreed the government was taking majority control of four energy companies and the country's biggest telecommunications provider. The government said it would pay $43.1 million for the energy companies after two years of negotiations failed. "

"Resource nationalism" strikes again.

For more background, see also:

"Despite Bolivian Gas Nationalization..." - Financial Sense Online.

"Brazililans fear takeover of farms in Bolivia" - New York Times.

"Bolivia unveils plan to distribute land to poor" - Swissinfo.ch