The four memos in this series on Bolivian oil and gas policy and the challenges facing the nation is part of an ongoing project of the Andean Information Network and Erika Weinthal from the Nicholas School of the Environment and Earth Sciences at Duke University examining Bolivia’s efforts to confront the “resource curse.”

Part I: Background on Bolivian Oil and Gas Policy, Current Conflicts, and Challenges
Part II: Political Conflict over Gas and Oil Tax Distribution
Part III.  Increased Gas and Oil Revenues from Nationalization Benefit Various Projects
Part IV.  Accountability and Sustainability

Popular protests in Bolivia demanding greater benefits for the population from the country’s vast natural gas reserves contributed to the resignation of two presidents, the election of President Evo Morales, and the nationalization of the country’s oil and gas industry.  Rather than expropriation, the nationalization consisted of higher taxes on petroleum companies and renegotiated contracts.  As a result of the new policy and high gas prices, the Bolivian government’s income from the country’s oil and gas industry has increased dramatically, nine fold  between 2002 and 2007.  

The new funds present an opportunity to Bolivia, the poorest country in South America, to use this income for social and economic development to benefit the population.  But the revenues also present numerous challenges: developing a shared vision for the use of the revenues, determining an equitable distribution of resources, engaging the population and civil society in decision-making, investing resources wisely, and ensuring transparency and accountability – challenges which other resource rich countries have faced and failed.

Response to the Human Rights Foundation: 

Don’t mistake lynching and other forms of vigilante violence for community justice.

The report contains a basic error that invalidates its conclusions: The HRF report mistakes lynching and other forms of vigilante violence for community justice.

Bolivia’s Constitutional Assembly held a sixteen hour session December 8 and 9 in Oruro, and, according to the assembly members present and the Morales administration, approved the new constitution before the December 14 deadline.  However, opposition governors of Santa Cruz, Beni, Pando, Tarija, and Cochabamba and opposition and pro-Sucre assembly members have declared the new charter illegal, because they interpret it as an attempt to consolidate power in the executive, and refuse to recognize it.  Moreover, the opposition departments will unveil their own “Autonomy Statutes” from December 13-15.  In La Paz, President Morales and assembly members will celebrate the approval of the new constitution.  These events will likely incur further conflicts unless the opposition and government begin to dialogue.

While President Morales’s statements have been uncharacteristically restrained, the opposition governors seem to be moving away from their normally diplomatic stance.  The governor of Santa Cruz made a doomsday statement saying, “Today we live a time of decision, our children’s present and future is at stake; we are in a historical moment that could mean the destruction of our homes, our jobs, and above all our very existence as free citizens…I call…on all free Bolivians in the country and in the world to organize and to protest and to take up the resistance in order to defend their rights and the consolidation of departmental autonomy.”¹  

In the fall of 2003, Gonzalo Sánchez de Lozada, then president of Bolivia, ordered the deployment of soldiers to suppress large protests against the export of Bolivian gas.  Over several days from mid-September through mid-October, the troops fired into crowds in the city of El Alto, near La Paz, and allegedly used snipers to shoot at civilian protesters.  Sixty-seven people were killed, including several children, and hundreds of others were injured.  Two days later, Sánchez de Lozada and two of his ministers fled to the United States, where they remain.

On September 26, 2007, with the help of human rights attorneys from Harvard University and the Center for Constitutional Rights, a group of 10 families of victims of the “Black October” killings filed a U.S. civil lawsuit against Sánchez de Lozada and former Defense Minister Carlos Sánchez Berzaín for their role in the deaths. According to the Center for Constitutional Rights, evidence indicates that they ordered Bolivian security forces to use deadly force to suppress the protests.

Bolivia’s Constitutional Assembly has struggled to complete its mandate, to rewrite the nation’s constitution and ‘refound’ Bolivia, since its inauguration on August 6, 2006 due to a string of protests and clashes on various issues.  In early September, violent and sustained protests in Sucre over the location of Bolivia’s capital pressured the Assembly to take a one month recess until October 8.  The break was extended for two additional weeks, postponing the next full meeting of the assembly to October 22. 

During the recess, some committees have been working, but the real compromises and negotiations are taking place within the framework of the multi-party commission called the “political council.”  The council, with representatives including Assembly members and legislators from fourteen of the sixteen political parties participating in the Assembly, has been meeting with Vice President Alvaro Garcia Linera acting as its moderator.  The council’s purpose is to seek out compromises on the most contentious issues within the Assembly, including the structure of the state, autonomy and the location of the capital.

On September 26, the Center for Constitutional Rights filed civil lawsuits against Gonzalo Sánchez de Lozada, former president of Bolivia, and his ex-minister Carlos Sánchez Berzaín on behalf of ten families of victims of the Black October massacre in 2003.¹  The suits charge the two men with extrajudicial killings and crimes against humanity, and will seek monetary compensation for the affected families.  The case represents another opportunity for justice and to provide closure for all Bolivians.

This US civil suit is separate from the Bolivian government’s criminal trial of responsibilities.  The Bolivian attorney general’s office is preparing to submit a request to extradite Sánchez de Lozada and Carlos Sánchez Berzaín, as well as another ex-minister, Jorge Berindoague from the US, where they have lived since October 2003.  

Click here to read this joint AIN-WOLA memo.  

On April 25, 2007, the Office of National Drug Control Policy (ONDCP) released U.S. estimates of coca cultivation and cocaine production in Bolivia for 2006. In the preceding months, U.S. officials had repeatedly warned of soaring coca cultivation in Bolivia in what was President Evo Morales’ first year in office. Indeed, the State Department’s latest International Narcotics Control Strategy Report (INCSR), released on March 1, 2007, asserted that initial U.S. estimates had shown cultivation “increases in most parts of the country,” and that [c]ocalero activism and the [Bolivian] government’s desire to avoid violent confrontation have contributed to the rise in coca cultivation.”

Coming in the wake of numerous U.S. references to rising coca cultivation in Bolivia, it is noteworthy that ONDCP reported that coca cultivation in 2006 was “statistically unchanged as compared to the 2005 estimate” and that “[c]ocaine potential production remained unchanged …from 2005 to 2006.”¹

U.S. funding decisions on Bolivia, especially tied to drug control programs, have long shaped policy within South America’s poorest nation. In the past, the threat of funding cuts as a result of “decertification,” a decision by the U.S. government that the nation had “failed demonstrably” to reach anti-drug goals unilaterally determined in Washington,  led successive Bolivian administrations to accept policy impositions often to the detriment of its internal political stability.

US officials continue to cling to eradication figures and old yardsticks to evaluate Bolivia’s new approach to coca cultivation and drug control.

The 2007 International Narcotics Control Strategy Report (INCSR)¹ criticizes the Morales administration for an increase in coca production and in drug trafficking in Bolivia.  Although official U.S. figures have not been released, it is probable that coca production has indeed gone up.  Data presented in the report, though, contradicts the assertion that this increase has pushed up potential cocaine production.  Although the report acknowledges progress in interdiction, meeting the eradication quota, a determination to fight corruption and continued bilateral collaboration, the Bolivia section contains a series of internal contradictions and misrepresents the reality of coca and cocaine in the country. 

The memos in this packet assess the Morales administration’s first year and key policy issues, including drug control, the constitutional assembly, the economy, trade relations, land reform,
gas nationalization, debt relief, and Bolivia’s role in the South American Community of Nations. They were produced by members of the Bolivia Working Group, composed of NGOs interested in U.S.-
Bolivian relations. The Working Group is sponsored by the Latin America Working Group (LAWG) and coordinated by the Washington Office on Latin America (WOLA).

Contents:

“Bolivian Drug Control Policy” - Coletta Youngers, Washington Office on Latin America; John Walsh, Washington Office on Latin America; Kathryn Ledebur, Andean Information Network
“A Bold and Difficult First Year” - Chris Krueger, Bolivia Ground
“Bolivia’s Constitutional Assembly: Essential for a Peaceful Transition and National Unity” - Kathryn Ledebur, Andean Information Network
“Bolivia’s Economy: The First Year” - Mark Weisbrot, Center for Economic and Policy Research
“U.S.-Bolivia Trade Relations: Opportunities for Exploring Equitable and Sustainable Alternatives” - Sarah Anderson, Institute for Policy Studies
“Bolivia’s Land Reform Legislation” - Douglas Hertzler, Andean Information Network; Kathryn Ledebur, Andean Information Network
“Bolivia’s Nationalization of Oil and Gas: Understanding the Process and Creating Opportunities” - Nadia Martinez, Institute for Policy Studies;
“Bolivia’s Economic Opportunity: Debt Cancellation from the International Community” - Debayani Kar, Jubilee USA Network
“South American Community of Nations (SCN)” - Tom Loudon, Alliance for Responsible Trade

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