FOCUS ON BOLIVIA
30.01.2006
 
NEW GOVERNMENT
 
·         During his historical and emotional inauguration, Evo Morales outlined the following priorities for his government: nationalisation and industrialisation of gas, constituent assembly and greater autonomy, support for coca growing but opposition to narcotrafficking, the nationalisation of government (such as reducing dependence on foreign aid for salaries in public administration), road-building, land redistribution of unused land, government austerity by cutting salaries and campaigns against corruption, education and health campaigns with Venezuelan and Cuban help, working with Chile to resolve “historical problems” (reference to the loss of access to sea)
·         The day after his inauguration as President, Evo Morales announced his new cabinet which included a mixture of academics, social movement and union leaders, lawyers and a leading businessman – some of whom had worked in public administration but none of whom had held a similar post in the past.
·         Prominent amongst his appointments were Abel Mamani (leader of Fejuve, the El Alto residents association that led protests against the privatised water company, Suez in January and gas protests in May/June 2005) who will lead the first Ministry for Water, David Choquehuanca (democracy activist and campesino adviser) who will be the first Indigenous person to lead the Foreign Ministry, Carlos Villegas (university professor who helped design MAS’s hydrocarbons policy) who becomes Minister for Sustainable Development, Andres Soliz Rada (a long-time campaigner for nationalisation) who becomes Hydrocarbons Minister, Casimira Rodríguez who was once a household worker and helped design a law to improve conditions for domestic workers and becomes Justice Minister, Felipe Caceres, a coca-grower and former mayor in coca-growing Chapare who was appointed deputy minister for social defence and will be responsible for developing Bolivia's policies on coca including campaigning to get it withdrawn from the UN list for illicit substances and exploring options to industrialise its use
·         Some in FEJUVE came out against Abel Mamani who is currently under investigation for conduct as leader in El Alto, whilst Mining Minister and former miners leader, Wálter Villarroel was also criticised by union members. Others came out against Walker San Miguel, appointed as Minister for Defence for his role in the capitalisation (privatisation) of airlines during ex-President Gonzalo Sanchez de Lozada's administration and his previous activism within an opposition party, MNR.
·         Later he appointed human rights activist Sacha Llorenti as Ambassador to the US who was former head of the Permanent Assembly on Human Rights and who has been leading the campaign to extradite ex-President Gonzalo Sanchez de Lozada for responsibility for 67 deaths in protests in October 2003. He was charged with continuing this work as Ambassador and for leading discussions over the Free Trade Agreement with the US. The appointment was criticised by other parties who said Llorenti was known for being critical of the US and having a hostile position on free trade.
·         Congress was re-inaugurated with only 17 out of 157 legislators retaining their seats which means that 90% of Congress is new. With support from two senators from the parties UN and MNR, MAS secured presidency of both Congress (Edmundo Novillo) and of the Senate (Santos Ramirez).
·         Evo Morales announced that he would be cutting his salary by 57% to about $1875 dollars from a previous salary of $4362 dollars a month in a country where the minimum wage is about $56 dollars a month . Other salaries will also have to be cut because law states that no public official can have a higher salary than the President. The savings for the State could equal 1,3 millones de bolivianos a month (₤92,000)
 
HYDROCARBONS
 
·         Former Minister of the Presidency, José Galindo admitted that they had been under heavy pressure from the petrol and gas companies to lower taxes and had to negotiate carefully to prevent posibilities of legal action and the flight of foreign investment.
·         The new president of the state-owned company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Jorge Alvarado (geologist), said that the main foreign oil companies operating in Bolivia, Brazil's Petrobras, as well as France's Total and Repsol, are willing to sign new contracts based on the existing hydrocarbons law. He committed to rebuilding YPFB to serve all Bolivians with involvement in the whole production chain and with a focus on industrialisation. New hydrocarbons Minister, Andres Soliz Rada announced that a law would soon be sent to Congress with suggested changes to the existing law including registering reserves as State property and fixing internal and export sale/purchase prices for hydrocarbons
·         It was also reported that Spanish transnational Repsol has decided not to proceed with the legal process it initiated that could see Bolivia being sued for lost profits under the World Bank hosted International Centre for Settlemetn of Investment disputes. Repsol announced a decrease in production, investments and profits and froze $476 million of investments, after the company's stocks dropped due in part to it lowering its declared reserves by 25% and due to “uncertainty in the hydrocarbons sector”
·         BG Group PLC said it will continue to defer major investments in Bolivia due to rising uncertainty in the country's oil and gas laws. Reserves contribute 2 pct of the group's annual production. BG hopes to engage in 'constructive' discussions with Evo Morales. BP said it was unperturbed by changes, given that it only has a very small business in Bolivia. BP produces about 15,000 barrels of oil equivalent per day in the country, as against its overall output of over 4 mln bpd. 'It's not material for the group,' a company spokesman said.
·         The capitalised firm, Chaco (with BP and Amoco involvement) effectively admitted involvement in contraband after making a late payment of $1.063.860.10 dollars to customs and citing it as under Bolivian law as “effective recompense.” The payment was made as Customs was about to initiate legal action following revelations that Chaco had exported 30 million barrels without authorisation. The next steps by Bolivian customs was not known and there was some debate as to whether it could account as “effective recompense” Capitalised firm Andina (with Repsol involvement) is also under investigation for contraband. Both firms along with Transredes are thought likely to be subject to increased State control by means of the State buying up a majority of shares in the capitalised firms.
·         Venezuela's state energy firm, PDVSA announced it was opening offices in La Paz at the same time as an agreement was signed by President Chavez and Morales for cooperation between PDVSA and Bolivia's state firm YPBF to develop projects for infrastructure, processing and refining of gas and petroleum. Morales also indicated that Bolivia would form part of a “mega gas pipeline” of 7000 kilometres linking Venezuela with Brazil and Argentina.
·         Local government in Santa Cruz said it was initiating a legal process against Transredes for their responsibility in a gas explosion in El Salao, 45 km east of Santa Cruz which left several injured and 30 families homeless
 

CONSTITUENT ASSEMBLY/AUTONOMY
 
·         Morales announced that the Pre-Constituent and Autonomy council, charged with preparing for elections for the assembly and referendum on autonomy on 2nd July would be re-organised so that social sectors would have more “relevant participation” and to improve on its ability to deliver. MAS denied claims it was trying to impose MAS hegemony on the assembly. The assembly will be inaugurated on 6 August 2006.
·         The number of constituent members and nature of elections are still to be resolved. The pre-constituent assembly suggested no more than 130 assembly members in order to be manageable. It is hoped the law will be passed in February to allow elections on 2 July.
·         The Pre-Constituent and Pre-Autonomy council has been split into two working groups up to now. The Pre-constituent assembly suggested all proposals in the assembly should be consistent with existing constitution. The Pre-Autonomy Council said autonomy involved transparent transfer of power in areas of administration, policy and the economy, which recognised the unity and indivisibility of the State. Departamental autonomy needed to be compatible with municipal and indigenous autonomy, and include principles of solidarity including a national compensation fund which would ensure balance between more and less developed departments.
·         Minister for the Presidency, Juan Ramon de la Quintana said land would be administered nationally based on a State-wide vision not a regional one after Ruben Costas, the new Prefect for Santa Cruz said the prefecture should be responsible for administering land and forest reserves. Quintana committed to redistributing idle land to those who need it, “not expropriation for expropriation’s sake”
·         The Assembly for Guarani along with other civic groups said they would be pushing for a new department, Chaco to be created in the next constituent assembly which would include land from Santa Cruz, Tarija and Chuquisaca
 
 
OTHER NEWS

·         John Danilovich, President of the US Millennium Challenge Account (a US aid programme tied to the UN millennium development goals) which received an application for $600 million dollars from the last Bolivian government, said it would follow Evo Morales Government and its policies “very closely” before approving any grants.
·         David Greenlee, US ambassador in a meeting with Vice President Garcia Linera emphasised that the US wanted to maintain “good relations” with the new Bolivian Government. Evo Morales said he wanted to discuss an effective alliance with the US against narco-trafficking without threats or conditions.
·         A projected bank for productive development with interest rates of 5% for small businesses was greeted with concern by other micro-finance lending institutions but urged on by the federation for small businesses.
·         The World Bank said it didn’t view the rise of left governments such as Morales in Latin America with concern but with “much hope” that they can succeed in redistributing wealth more fairly but said it couldn’t be done in a way that threatened “economy stability” They also admitted that the new hydrocarbons law had played an important part in reducing Bolivia’s fiscal deficit but said Bolivia needed “clear rules” to attract foreign investment. It stressed that one way Bolivia could grow would be through increasing exports in areas such as textiles and jewellery. The Bank said that the process for cancelling Bolivia’s debt owed to the World Bank on 1 July 2006 was “well advanced”
·         Ex head of the Army, Antezana admitted that Bolivia had sent 41 and not 28 missiles to the US for deactivation in a growing scandal which has involved contradictory statements and obfuscation by former government and military leaders that MAS made a feature of their campaign.
·         Morales and Chavez signed a deal that would guarantee additional exports of 200 million tonnes of soya to Venezuela.
·         Evo Morales declared a national emergency and appealed for international aid after serious flooding destroyed key roads, isolated various rural communities and destroyed crops in various parts of Bolivia directly affecting 17500 inhabitants
·         The Catholic church called for more effective land distribution after a report revealed that 80% of small-scale farmers share just 3% of land compared to 20% of large landowners controlling 97%.  The Agrarian Reform Law in six of its ten years has only succeeded in achieving 22% of its supposed work of redistribution. According to a report by Minister of Agriculture in 2000, 95% of large land plots are not used for agriculture.