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Bolivia nationalises energy and telecom firms

©

Latest update : 2008-05-02

Bolivian President Evo Morales said the government was taking controlling stakes in the national telecom company and four energy companies, including foreign-owned concerns as part of a nationalization process. (Story: K.Yahiaoui, M-N Bauer)

Bolivia was Friday headed for a collision between leftwing President Evo Morales and the opposition-run province of Santa Cruz over a referendum on autonomy that many fear could spark widespread violence.
  
Santa Cruz's voters are expected Sunday to overwhelmingly approve statutes that would give their territory control over revenues from massive gas fields, and create a local security force.
  
But Morales has vowed to ignore the result, dismissing it as illegal and amounting to no more than an "opinion survey" by a province that he views as separatist.
  
As if in warning, on Thursday he sent police and soldiers into the city of Santa Cruz to secure offices there belonging to Entel, the country's main telecommunications company that had been a subsidiary of Telecom Italia.
  
Morales was bringing Entel and three foreign-owned energy companies in Bolivia into a sweeping nationalization program he started when he came to power in December 2005.
  
"Bolivia wants partners, not owners," the president -- an admirer of Venezuela's Hugo Chavez and Cuba's Fidel Castro -- said in a speech coinciding with the May 1 workers' holiday.
  
The energy companies taken over by the government were Chaco (controlled by British Petroleum), Transredes (Ashmore Energy) and CLHB, controlled by German and Peruvian firms.
  
Morales's recent moves railroading through changes to Bolivia's constitution to give himself more powers, and giving the poor, indigenous majority from which he hails a greater share of the country's wealth, triggered Santa Cruz's push for autonomy.
  
Three other provinces, also in the relatively better-off lowlands shared with Santa Cruz, are to hold their own votes on autonomy next month, and two others are thinking of following suit.
  
If all do so, Bolivia would effectively be split between the Andean highlands where the indigenous Indians mainly live, and the lowlands inhabited principally by European descendants.
  
That division has fuelled claims of racism on both sides. Morales -- who remains popular despite losing support in the east of the country -- has also portrayed his opponents as a white "elite" intent on protecting their privileges.
  
The government has additionally raised allegations that the United States was involved in supporting the "rebel" provinces.
  
Morales, in his speech, took a swipe at the United States, telling it "with all due respect" to get its troops out of Iraq if it wants to focus on its war on terror.
  
He was reacting to reports that the US State Department has deemed Bolivia to be on its way to becoming a state with potential terrorist activity.
  
"What is happening is that for a model, for a system such as unfettered and inhuman capitalism, social struggles for equality are 'terrorism'," he said, reaffirming his adherence to socialism.
  
For all the rhetoric, and the entrenched conflict between Morales and Santa Cruz's governor Ruben Costas, it was far from certain what would happen in Sunday's vote.
  
Although the country has repeatedly stepped back from a potentially ruinous confrontations in the past, violence over political divisions is not unknown.
  
In January 2007, in the town of Cochabamba, for example, three people died and hundreds were injured in clashes linked to social strife. Street blockades and demonstrations occur frequently.
  
Student-led demonstrations in the city of Sucre last December over Morales's reforms also descended into street brutality.
  
Brazil and Argentina, which have deals to access Bolivia's recently nationalised gas sector, have unsuccessfully attempted to negotiate a solution, as has the Organization of American States and Bolivia's Catholic Church.
  
 South America's poorest nation, Bolivia has a population of 9.5 million, nearly a quarter of which lives in Santa Cruz province.
  
The latest surveys suggested that as many as 70 percent of the province's 900,000 voters will cast their ballots in favor of the autonomy statutes.

Date created : 2008-05-02

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