Sunday, August 3, 2008

Good News for Evo; Land and Gas Distribution in Bolivia

With a less than a week until the Aug. 10 referenda in which Bolivian President Evo Morales and eight of the nine state governors will face possible recall, Morales has some good news: His approval rating has reached 57%. He needs only 46.3% of the vote to stay in power. (Originally, the governors of the departments needed between 52% to 62.1% to stay in power, due to electoral law; the Bolivian Electoral Court ruled to put the bar at 50%, with the Morales administration's approval.)

The referenda are in response to the recent "autonomy" votes in four departments: Santa Cruz, Beni, Pando, and Tarija--the so-called "Half Moon" territory carved out of the resource-rich lands of eastern Bolivia. The Center for Economic and Policy Research has a Morales and his policy of land distribution and greater state control of the country's natural gas production. Among its findings: ownership of Bolivia's most valuable natural resources, arable land and hydrocarbon reserves, is inequitably distributed to the richer and non-indigenous population (in a country where 62% are classified as "indigenous").

Morales, an Aymara Indian himself, is also trying to gain greater control of the country's hydrocarbon industry, in which natural gas is the big product. Tarija, with 60% of the country's natural-gas production and 85% of its reserves, is only 20% indigenous. Add to this a land distribution where 0.63% of land owners own more than 66.4% of agriculture land--in the poorest country in South America--and the class divide between the rich and the poor becomes pronounced. (Also bear in mind that state diesel subsidies of $335 million a year are given to to the Half Moon states, along with 49.7 percent of hydrocarbon revenues--about $750 million--to the prefectures, municipalities, and universities, a staggering amount of money that the central government doesn't see (only 25% of hydrocarbon revenues goes to the Bolivian government).)

As the paper concludes:
In most developing countries, it is assumed that these valuable resources belong to the nation as a whole, not to the particular region in which happens to be underground. This is especially important for developing countries, since their development strategy – the means by which they can eliminate extreme poverty and reduce overall poverty – is based on using the rents from their mineral wealth to diversify away from hydrocarbons, as well as investing in economic and social infrastructure. Of course, this is even more important in a time of high energy prices. The Media Luna [Half Moon] states are advocating in another direction: in a country that already distributes its hydrocarbon revenues more than any in the world to provincial and local governments, they want even more to go to the provincial governments.

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