The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Hydrocarbons are nationalized
– but no break with imperialism

May 8, 2006

On May 1, the new president of Bolivia, Evo Morales, announced the re-nationalization of the country’s most important resources – natural gas and oil. He stopped there – not taking over all facilities and assets completely.

Bolivia will negotiate with the foreign multinational companies that buy Bolivian gas; the Bolivian state will take a greater share than it currently owns. And just to make sure, the president sent in troops to occupy a number of hydrocarbon sites, especially in the important region of Santa Cruz.

This brash decision by Morales, who dares to step on the toes of big oil, deserves support. But the new president was pushed to take action by a massive mobilization calling for re-nationalization.

The re-nationalization of hydrocarbons, but not the facilities of the oil trusts, is the first point on Morales’ economic program. He explained in an interview last March that he did not intend “to confiscate or to expropriate the property of the oil companies. But they do not have the right to own the hydrocarbon sites that belong to us. Rather, it is our government that will control them. We are going to nationalize the hydrocarbons, but not the property of the oil companies.” And he invited any foreign companies that reject this nationalization to leave the country.

It is easy to see why Washington, the European Union and even some neighboring countries like Brazil, which buys half of Bolivia’s gas production, are unhappy with this latest move. The imperialist powers obviously prefer to rob Latin America as they please. This re-nationalization of hydrocarbons puts into question all the other privatizations the Bolivian government carried out over the last 10 years. Still, the oil and gas companies will be able to make sizeable profits under this new arrangement.

Up until 1997, Bolivia used enough of its hydrocarbon reserves to satisfy its domestic market and export small quantities of natural gas. From 1936 until 1996, the national enterprise Yacimientos Petroliferos Fiscales de Bolivia (YPFB) was responsible for its exploitation and commercialization. Apercentage of the operations went to the state to finance various budgets, especially in the provinces. The money collected was not used, however, to take control of new exploration below ground, an activity left to the foreign oil companies.

In 1996, a former president privatized most of the economy, including hydrocarbons. Beginning in 1997, a number of foreign multinational companies joined those already present in Bolivia, their appetites whetted by the discovery of new gas reserves. More than 20 large companies used their technological mastery to carve up Bolivian gas reserves. Among them were Total, British Gas, Chaco-Amoco (Dutch), Repsol (Spain), Shell and Exxon-Mobil, and Pluspetrol (Argentina).

Beginning in 2000, the Bolivian population was mobilized over the demand to take back their natural resources, including gas and water. A number of movements developed, including the MAS (Movement Toward Socialism), the party of Evo Morales, which has its social base among the growers of coca; the Bolivian Workers Center, the main union organization in the country; and the Neighborhood Federation of El Alto, a poor suburb in the capital, La Paz.

These social conflicts, sometimes bloody, had led to the downfall of two earlier presidents and to the election of Morales. A 2004 referendum affirmed that 70% of the Bolivian people were in favor of nationalizing hydrocarbons. This demand became the #1 point on the electoral platform of the MAS.

As is often the case in political parties, the MAS expressed the demand ambiguously in its program. There is a radical wing of the MAS that wants to go all the way to the complete expropriation of the foreign companies. The policy announced by Morales does not go that far.

Morales, elected in January with 54% of a very large turnout, has respected the wishes of his electorate. The decision to re-nationalize hydrocarbons will inevitably lead to a battle with the oil trusts and with a part of the privileged class linked to them.

By satisfying this demand, the government of Morales has at the same time strengthened its ties with the popular movements that elected him. By leaning on the population, Morales expects to gain enough strength to maneuver with the imperialists to lift some of the pressure they put on Bolivia. At the same time, he is not taking radical moves against the interests of these imperialist powers, nor putting into question their private ownership of the means of production – all of which makes it more difficult to improve the living conditions of the poorer classes.

The reason Morales made these moves was the popular mobilization pushing for them. The poor classes would do well to continue to pressure the new government to carry out its maneuvers against the oil trusts – but also to make sure that the poor classes are not forgotten during the redistribution of wealth that the Bolivian state is pretending to rule over once again.