On Monday, May Day, Bolivia’s populist, liberal president Evo Morales announced his plan to nationalize the nation’s energy sector. This action was the fulfillment of his electoral pledge to assert control over Bolivia’s vast natural gas reserves to help divert money to the nation’s impoverished, predominantly indigenous citizens. Latin America’s recent left-wing tilt has not gone unnoticed by the world. Lula, Chavez, Kirchner, Morales, and in the future certainly Humala or Garcia in Peru and possibly Lopez Obrador in Mexico have come to create a formidable block that oppose typical neoliberal policies. However, rifts among this group are bound to occur as national interests eventually outweigh liberal camaraderie.
Bolivia’s action is a direct blow to Brazil oil-giant Petrobras which controls 45% of Bolivia’s natural gas which amounts to nearly one billion dollars of investment. No doubt, Brazil has taken this act as a stab in the back from a country with whom it counted as a partner rather than an adversary.
As the BBC’s Robert Plummer writes:
Now the mood in Brazil is one of betrayal and humiliation. Mr. Gabrielli has described the decree as “unfriendly” and declared that Petrobras will review its activity in Bolivia. Lula promptly called an emergency cabinet meeting to examine the move. And an unnamed close adviser to Lula was quoted in the Brazilian press as saying that the government had been “caught with its pants down” over the military’s seizure of facilities including Petrobras’ refinery in the eastern city of Santa Cruz.
While Lula heralded in Latin America’s shift to the left which brought a definitive end to any lingering (and misguided) hope of resurrecting the Washington Consensus policies, his approach was much more understated. Rather than infuriate the business community, he drew them end and devised ways that they might work together. Most notably in his Fome Zero (Zero Hunger) plan to end hunger in Brazil, he invited his nation’s largest companies to be partners in the national program (most notably Embraer, Petrobras, and CVRD). Additionally a business group has formed Associacao Apoio Fome Zero Empresarial whose sole goal is to integrate the government’s efforts with those of private industry. They realize that the one way to foster true economic prosperity and a robust economy is to alleviate hunger. This, in turn, is beneficial to both the public and private sectors.
While success is still far off for Fome Zero, by working with the business community rather than actively opposing them Brazil under Lula has, indeed, prospered economically. In contrast, Morales’ abrupt, unilateral actions will clearly alienate any companies who would have been willing to work with him to reduce Bolivia’s overwhelming poverty. These actions may prove popular in the short term among a populous thirsty for change; however, ultimately such unilateral action will be counterproductive. Herein lies the rift between the pragmatic leftists, Lula, Kirchner, Lopez Obrador, and their more radical brethren Chavez and Morales. Who will win the ideological debate among the politicians and people of Latin America is yet to be seen.
Published Date: May 03, 2006