Today's News Roundup: January 31 2005

Mining Minister Claims Mutún Bidding Unconstitutional

The newly appointed minister of mines an metallurgy, Walter Villarroel, yesterday announced that the Mutún bidding process would be reviewed. Claims that the process has been unconstitutional and that the industrialization of the reserve should be controlled by the bankrupt state mining corporation COMIBOL Foreign companies that may be affected include Mittal Steel Group, Shandong Luneng Mining Group, Jindall Steel & Power, The Techint Group, SIDERAR. More from Los Tiempos (SP)

Should YPFB become a private company?

More of a mixed ownership society, following the Petrobras example, or so proposes Armando Álvarez, General Manager of the Bolivian Stock Exchange (BVV). The proposal arrives more from a financial than operating point of view. The primary objective being that YPFB, the Bolivian oil and gas state corporation, could be listed in the exchange and access capital through that mean. More from El Diario.

Petrobras Begins Talks With Bolivia Government

Brazil's state-run oil company Petroleo Brasileiro SA, or Petrobras, has begun talks with Bolivia's new government about the future of its operations. Jorge Alvarado, the new president of Bolivia's state-energy firm Yacimientos Petroliferos y Fiscales Bolivianos, was quoted in Brazilian papers Friday as saying Bolivia would nationalize refineries operating in the country, starting with two refineries owned by Petrobras that are estimated to be worth US$150 million (euro122 million). Foreign oil firms have invested US$3.5 billion in Bolivia since 1996. More from Dow Jones Newswires, Via AP.

More Trouble for Transredes

Energy transporter Transredes, has been granted a one week time frame to pay a 12 million bolivianos fine ($US 1.5 million) trailing back to the 2001 oil spill incident in the Desaguadero river. The fine responds to the severe ecological damage caused to the area. Similarly more fines are expected in response to the recent incidents in El Salao and Pojo in Santa Cruz, Transredes is owned by Prisma Energy, a division of Shell, and Bolivian pension fund managers Futuro the Bolivia and Prevision BBVA. From La Prensa.

Tag: Bolivia,Bolivian Oil,news,investment.

A Spurious “Victory” for Nationalization

Since the start of the Morales presidency commentators and investors alike have been looking very carefully at any developments within the Bolivian oil and gas sector, obsessing over supossed omens of imminent expropriation. President Morales’ campaign promises of “nationalization” received a boost when he appointed journalist and notorious globalization oponent Andrés Solíz Rada, as minister of hydrocarbons. Solíz Rada, whose ideas regarding energy policy are well documented in a number of books and articles [1] , has been a staunch proponent of nationalization.

Surprisingly enough, not even a week after being appointed minister, Solíz Rada is already causing controversy. This past Friday reporters had a field day with his declarations that “a major victory” had been won over Repsol [NYSE:REP], the Spanish energy company, heralding the “beginning of the nationalization process”. Solíz Rada claims that Repsol incurred “massive accounting fraud” by “subscribing Bolivia’s oil and gas reserves as its own in the New York Stock Exchange”.[2] The Bolivian press seems to have taken these claims at face value, ignoring the solid fact that Repsol's filings to the Securities and Exchange Commission or its statements in its Annual Report regarding oil or gas reserves don’t constitute a claim of ownership whatsoever.

Further, the press has misinterpret recent movements in the NYSE (Repsol’s stock had dropped 4.79 percent or $US 1.34 at the market’s closing on Friday) attributing the movement solenly the Bolivian announcement.

In reality, the drop in Repsol’s stock responds to a number of other factors:

Repsol has indeed, restated a percentage of its reserves, which it never “claimed as its own” given that as is the case everywhere from Libya to Venezuela to the United States, the resources are national property, under concession to a private company. But the restatement obeys more of a move towards complying with US-GAAP and IASB accounting standards rather than a response to the Bolivian situation alone.

The company hasn’t given up “authority” over any reserves (which it holds as a concessionary) it has simply reclassified reserves from proved to probable in Bolivia (52%), Argentina (41%), Venezuela and Trinidad y Tobago (7%). Together these reserves amount to 25 percent of Repsol’s global reserves. [3]

The shift responds to two factors:

• That the Securities and Exchange Commission’s definition of proved reserves entails the following: geologic certainty that the reserves exist and are recoverable under current methods, that there is a firm contract for their recovery and sale and finally that the resources will be recovered during the concession period. Repsol honestly recognized that some of its reserves througout Latin America did not have one ore more of these features and decided to restate.

• That conditions in some countries have changed making many of its fields no longer profitable under current conditions (in Bolivia this refers to the new hydrocarbons law and directly affects the Yapacaní fields). Repsol has also relocated close to $US 400 million to its Argentinian offshore explorations.
  

Finally, Repsol’s debt structure has been worrisome for a number of years now, and this is starting to have consequences as various research firms, including Fitch and Standard & Poors, have consistently downgraded the company’s debt instruments.

As you can see Solíz Rada’s declarations fall short of accuracy, there has been no “victory” over Repsol or recognition of fault by the firm; and regarding Repsol's share price and returns -which can be safely sustained by current oil prices- believe it or not the stock market doesn’t float around an oil minister’s allegations.

ADDENDUM: As it was expected, Repsol’s stock picked up again today [Jan 30], (only 0.15% with maybe a little more after hours) but already in the recovering process; the worst announcements have already been made, and now the market should respond positevely to Repsol’s attempts to move on (betting on the Peruvian LNG, it’s partnerships with Petrobras and it’s offshore operations in Argentina). Meanwhile, Bolivia losses investment for a sensible project that its needed now more than ever, even though the Tarija projects are expected to kick in only by 2009.

Further Reading:
Repsol's Annual Report for 2004, or Reporte Anual Consolidado para el 2004.
El Deber “Ley del gas provoca caída de las reservas de Repsol” 27 Ene 2006

Notes:
1.- El imperio en Bolivia. EEUU, el 21060 y el poder judicial (Cbba: 2002), El Gas en el Destino Nacional (La Paz: 1984) Some articles are available here.
2.- Soliz Rada, Repsol y el Asalto a las Reservas January, 29, 2006
3.- Webcast, Repsol Estimates Reserves Revision Conference Call, Jan 26, 2006.

Tag: Bolivia,Bolivian politics,Repsol,NYSE.

President Morales Inauguration: See it on Video

I wasn't able to watch the speech as it happened, however, I'm seeing it right now via NOTICIAS BOLIVIANAS. See it on your own, so far it feels like campaign talk all over again. I'll comment later, now go see the videos!

Tag: Bolivia,Evo Morales,politics,bolivian.

Markets Everywhere: The Presidential Chompa

In a story first brought to us by Los Tiempos, it appears that Evo's now trademark dim red, blue and white sweater (chompa in Spanish), with which he was seen in at least four different ocassions during his recent world tour is becoming a best seller in Bolivia's retail stores. Argentinian newspaper La Nación went as far as tracking down the manufacturer of the garmet (Punto Blanco) and interviewing its top managers.

Yahoo! Photos has a series of pictures acompaigning the Reuters story, pictured above the version by Punto Blanco, and below... the bootleg version.

The jersey -which is not pure alpaca as it's mixed with syntethic fibers- retails for 70 to 80 Bolivianos (about $US 10) and can be found in both Cochabamba and La Paz. Journalist Juan Carlos Salinas from notibolivia has more on the story:

Exportación

Punto Blanco no ha recibido aún pedidos del exterior, pero sí de gente que planea viajar a otros países y quieren lucir fuera de Bolivia la chompa de Evo, según explicó. Ante la posibilidad de exportar este producto, Valda detalló que la "capacidad de producción no falta" porque su fábrica está en condiciones de elaborar hasta mil suéteres por día.

Continue reading the original note.

Tag: Bolivia,Evo Morales,products,

Assessing the Value of [Bolivian] Blogs

One of my favorite mental exercises is assigning value to intrinsically invaluable things (call it asset valuation just for kicks if you will). We all do this in a subconscious level for pretty much everything in our lives, from the relationships we establish to the things we buy. So it occurred to me that the task would more challenging if I were to assign value to something like, say blogs -Bolivian blogs. Many see web logs only as means of self expression, and therefore absent of any value to persons other than the writer. I used to have this opinion, but immersing myself in the world of blogs has given me a different perspective. Off the top of my head I can name three value features of blogs, and Bolivian blogs in particular:

Let us start with the easy one:

• A Blog is valuable because of its monetary meaning; which originates from the expenses and opportunity costs incurred in creating it. Blogs, as any other product of the human imagination can be appraised and ostensibly traded.

Are Bolivian blogs, monetarily valuable? Definitely, the resources (time, energy, brainpower, hosting and domain costs, electricity, internet time) and opportunity costs used to create the blog entail expenses that ideally should be recuperated one way or another.

The final product is intellectual and proprietary (and authors often recognize this by seeking Creative Commons protections). In many cases returns are sought in a more material way, either by selling advertisement or by promoting services or products than the less material but equally compensating sense of recognition.

Bolivian blogs also provide knowledge, and are a potential source of information for the mass media. Just browse through the Google searches that lead to your blog; in my case I have been visited by people typing “banco bisa abierto angulo internacional” or “Apex Silver Evo Morales” pretty obscure associations unless you are seeking specific information about a financial entity in Panama funding an acquisition in Bolivia or what Evo Morales thinks about your company. However, I say potential news source because blogs have no editor and bloggers are not reporters, and any serious journalist would take this facts into consideration.

Bloggers’ opinions provide a source of quasi-primary research and consumer information for a well adjusted marketing firm that knows where to look. Certain types of blogs offer a glimpse of what is fashionable or what trends dominate a segment of society. This data can serve several commercial purposes, and in the case of Bolivia, provides access to a demographic that is generally educated, urban, and wealthy or aspires for wealth. Blogs can also be a tool for self-promotion, were lawyers, writers or musicians can effectively reach potential employers in a personal level everyday, every time. Similarly, bloggers can openly or succinctly offer their professional services. If the blog belongs to a non-profit organization –as is the case with several Bolivian blogs- it can also serve as a means of seeking funding or international exposure.

According to Blogs de Bolivia's observations the majority of Bolivian blogs use free hosting services, enabling egalitarian access to the network.

Finally, blogs create networks and connectivity, both of which are highly valuable assets in a country like Bolivia, where only a fragment of the population has constant access to the internet. This connectivity adds to the value of the web log, and just as your cell-phone connection has a cost attached to it, your presence in this network has a cost and potential monetary value. All of the features I’ve pointed out above would “in the real world” either cost money or provide revenues, and therefore have a real and monetary value.

One of the most accessible frameworks to assess potential “dollar” value of blogs is based on the research of Tristan Louis; I have used this application to compute the potential monetary value of seven of the oldest and better known Bolivian blogs, as well as a few others for comparison purposes.

Oldest and most visited/linked blogs from Bolivia, all figures as of January 13, 2006 (listed by founding date):

• elforastero.blogalia.com/.- Founded circa: May 2002. Average unique monthly visits (Extreme Tracking) 11,272: Technorati measures: 199 links from 66 sites . By link-to-dollar ratio this blog is worth: $28,227.00

• almadadenoche.blogspot.com/.- Founded circa: February 2003. Average unique monthly visits: None publicly available. Technorati measures: 53 links from 20 sites. By link-to-dollar ratio this blog is worth: $11,290.80

• centellas.org/miguel/.- Founded circa: March 2003. Average unique monthly visits (CQ counter): 3,461 Technorati measures: 129 links from 34 sites. By link-to-dollar ratio this blog is worth: $19,194.36

• barrioflores.net/weblog.- Founded circa: September 2003. Average unique monthly visits (CQ counter): 1098. Technorati measures 136 links from 35 sites. By link-to-dollar ratio this blog is worth: $19,758.90

• mabb.blogspot.com/.- Founded circa: September 2003. Average unique monthly visits (Site Meter): 1422 Technorati measures: 197 links from 54 sites. By link-to-dollar ratio this blog is worth: $28,791.00

• rocko.blogia.com/.- Founded circa: May 2004. Average unique monthly visits (StatCounter): 2,888 Technorati measures: 20 links. By link-to-dollar ratio this blog is worth: $11,290.80

• democracyctr.org/blog/.- Founded circa: December 2004. Average unique monthly visits: None publicly available. Technorati measures 130 sites link to this blog: By link-to-dollar ratio this blog is worth: $25,988.89

And to prove the power of links and networks, look at the potential monetary value of this five month old blog:

• blogsbolivia.blogspot.com/.- Founded circa: September 2005. Average unique monthly visits (Extreme Tracking): 1200 Technorati measures: 57 sites link to this blog. By link-to-dollar ratio this blog is worth: $32,178.98.

Or this 13 month old blog/digest:

• cyber.law.harvard.edu/globalvoices/-/weblog/.- Founded circa: November 2004. Average unique monthly visits: None publicly available. Technorati measures: 1,790 sites link o this blog. By link-to-dollar ratio this blog is worth: $754,225.44

Or 2005’s Weblog Awards “Best Blog” Winner:

• www.dailykos.com/.- Founded circa: May 2002. Average monthly visits (SiteMeter): 14 million. Technorati measures: 10,872 sites link to this blog. By link-to-dollar ratio this blog is worth: $5,689,434.12

Websites like Blogs de Bolivia or Blogalaxia are dedicated to tracking Bolivian blogs, thereby sustaining a great deal of the networks connectivity; while sites like Mundo al Revés, represent an entrepreneurial effort to host Bolivian blogs.

Now to the more complicated valuations, where I “assign value” to the content of the blog, which can be a touchy subject, as my opinions are subjective and what to me is a “worthless” blog (very few of those) certainly has a value for other people and to its author.

• A Blog is valuable because of its political and propagandistic uses/potential.

Several Bolivian blogs publicly express the political tendencies of their authors, and as far as I know the better part of the full spectrum of political tendencies is present in the Bolivian blogosphere, where you find (my descriptions not theirs) representatives of the:

Right wing of fascist origin, “typical” conservative right wing (US definition) , right wing free marketers a sangre y fuego, pragmatic right wing, centrist, pragmatic left wing, “typical” left wing, left wing anti-globalizers, populist left wing. As well as representatives of fringe movement like indianismo; there is also a number of religious particularly evangelical blogs.

The existence of these blogs, other than serving their author’s particular goals, functions as means of furthering a particular political ideology. Though I don’t expect any bloggers posts to shift the weight of an election, they do contribute to informing voters and commentators. Such political orientations are recognized by others and also by the main stream media. With regards to the Bolivian blogosphere, emporiums of the right, such as PubliousPundit, will approach and link mostly to bloggers of a clear ideological position –which they approve of. The same holds true for the left, were blogs such as The Democracy Center’s Blog by Jim Shultz are a constant reference. In both cases the authors are identified by their ideologies and may benefit from interviews, articles or other types of air time in the traditional media.

One of the benefits of the internet is the availability of reaching vast sources of information, and readers/viewers generally tend to “consolidate” their news sources. By this I mean that readers tend to settle for a few channels, one newspaper and a few websites. As the reader becomes more comfortable with this limited set of sources –possibly because they agree with his preconceptions- he becomes complacent and eventually will cease to question the veracity of what he’s reading. This can happen with politically-inclined blogs as well, and there lies its potential for propaganda.

• A Blog is valuable because of its educational potential.

There’s an increasing number of educational blogs popping around in the Bolivian blogosphere. While we may argue that the first blogs to spin from Bolivia were educational in essence –and I’m talking about those founded by Linux fans - initiatives like Diplomado en Temas Curriculares and Libro Libre Bolivia have a broader educational transcendence.

Well known authors such as Edmundo Paz Soldán or Ramón Rocha Monroy as well as aspiring authors and a number of academics, doctoral students, and undergraduates –including yours truly- both in Bolivia and abroad, also post in many blogs, sharing their knowledge and providing commentary in their areas of expertise.

Blogs, particularly those maintained by the Diaspora, promote a cultural exchange between expatriates and the citizens of their home countries. Is this enough to counter brain drain? Obviously not, but at least it provides some sort of knowledge remittance, which should be encouraged.

As you can see, Bolivian blogs certainly have value beyond the obvious; being monetarily, informative/propagandistic and educationally valuable. I’m sure that there are other features that I have not pointed out, and the reader is invited to add their own impressions, comments are open.

Tag: Bolivia,networks,Blog,Blogging,Technology

Beautiful Comparisons

Retro vs. Metro: Bolivian Version?

[see this link for details]

Tag: Bolivia,Evo Morales,Bolivian

Meme of Four [On the Lighter Side II]

Eduardo posted this one a few days ago, I figure filling the questionaire gives a little more of a personal touch to my blog, given that I don't talk much about myself here already.

Four jobs you've had in your life: Press liason for a civic organization in CBBA, translator, staff writer in my old college newspaper, website administrator (paid and pro-bono).

Four movies you could watch over and over: Dr. Strangelove, the godfather (whichever), all quiet in the western front, and some funny movie.

Four places you've lived: Cochabamba, Bolivia, Englewood NJ, Miami FL, Tallahassee FL.

Four TV shows (when I can catch them): Mad Money, the Daily Show, The Colbert Report, Law and Order SVU.

Four places you've been on vacation: Washington DC, Rome, Berlin and other German cities, Capri.

Four websites you visit daily: NYT, Comunica, Noticias Bolivianas, finance.yahoo.com.

Four of your favorite foods: Sopa de mani, pique mancho, saltenas, lasagna.

Four places you'd rather be: Bolivia - where most of what matters is, Guadalajara - with my younger brother Gary, Chicago - where I'll be eventually, and 1440 Kiewit Plaza Omaha, NE 68131 - in his shoes, for a week.

Four albums you can't live without: Every type of music has a time and place, however, no album in itself has ever shocked me so much as to say I couldn't live without it, nonetheless here are four of my favorites: The Four Seasons, interpretation by Itzhak Perlman. Wagner, "The Ring" without words, pretty much any interpretation. Craddle of Filth, Lovecraft and Witch Hearts which represents a part of me very few know, and Mellon collie and the infinite sadness by the Smashing Pumpkins, which I started to listen to during an interesting time of my life thanks solenly to Daniela.

Pass this to Max Glaser, and Alexey, both of whom I don't know at all.

Ceremonial Hubris [On the Lighter Side]

As the Inauguration of president-elect Evo Morales and his government nears closer, many have question how the ceremony will be conducted. MABB points out the three ceremonies that will take place (true to the Bolivian tradition of over-extending whatever near-holiday is around). Here's my take, the first and most relevant, the traditional ceremony that takes place in Congress will occur January 22, some 250 official guests are expected. I continue at risk of sounding like one of those social columns while I try to drive some political points through…

Who are the lucky A-listers?

So far the heads of state confirmed to attend are Alejandro Toledo from Peru, Néstor Kirchner from Argentina, Nicanor Duarte from Paraguay, Tabaré Vázquez from Uruguay, Luis Inacio Lula da Silva from Brasil, Alvaro Uribe of Colombia and Alfredo Palacios from Ecuador. Outgoing Chilean president Ricardo Lagos has been invited but probably won’t attend, Venezuelan president Hugo Chávez and Cuban dictator Fidel Castro will probably attend, Slovenian primer Janez Drmovsek is also confirme -a first and rare visit. At ten presidents and one dictator Evo would break the record of foreign heads of state present at Bolivian inaugurations (previously held by Jaime Paz Zamora at six in 1989). Spain’s crown prince Felipe de Borbón is also invited as are Nobel laureates Nélson Mandela, Rigoberta Menchú, José Saramago and Gabriel García Márquez. The chairmen of several organizations such as OAS and CAN are also slanted to be present. They should bring their own security though, as one of the nation’s oldest and most prestigious regiment, the Colorados Presidential Guard, will be replaced by a miners (armed?) "guard" in security tasks.

And the B-list?

Well, some folks I’m not particularly fond of, such as Argentina’s favorite cokehead-turn politico Diego Maradona (formerly a great soccer player), some head honchos of the Movimiento Sin Tierra, some from the “Bolivarian Circles” of Venezuela and the Mexican Zapatistas. We can expect leaders of the Peruvian Etnocacerista movement to show up as well as a few “covert” representatives of “certain organizations”. There will also be some more circus for the people (could we also expect some bread? [flash]) as a number of musicians have pledged to attend.

This last group may give us a performance in the second “ceremony”; to be held in Plaza San Francisco, the popular marketplace from which many a marches have been launched. The plaza can hold upwards of 10,000 people so expect it to be packed with the assorted crowd of campesinos, cocaleros, miners, Trotskyite students professional protestesters, culitos-blancos turn-mazistas, and Evo’s new praetorian guard: El Alto’s “Evo Government’s Defense Committee” (I swear I’m not making this up).

Be very careful about what you wear to this event.

Apparently the fashion world was rattled -for 0.6 nano seconds- with Evo's choice of attire.
(Chewable coca leaf necklaces sold separately, banality included)

The third ceremony will take place in one of Bolivia’s most important archeological sites; Tiwanacu, the beautiful and battered temples and structures built by a civilization that preceded both Aymaras and Quechuas. The site has been appropriated now for little more than a decade, by mystics and tourists (both national and foreign) alike, for the winter solstice festivities (and lots of drinking and partying). These fragile structures will have to take the punishment of yet another new-age revival of ancient customs, as thousands are expected to attend. Here Evo will be invested crowned with the traditional altiplanic galore, the poncho, the staff and the whip. Lots of whipalas to be expected, probably outnumbering the less colorful Bolivian ensign, I’m expectant to see if Evo or García Linera will pledge allegiance to that flag.

Tag: Bolivia,Evo Morales,Ridiculous,

Franklin Mining, Inc. Reports on Silver and Gas Opportunity in Bolivia (Forward-Looking Statement)

From RedOrbit Breaking News . -

Franklin Mining, Inc. (OTC Pink Sheets:FMNJ) is very positive on the opportunities in Bolivia.

In the last trip to Bolivia, the C.E.O. met with officials of COMIBOL, the mining corporation of Bolivia and a Federation of Miners that represent several thousand miners. This meeting was to discuss the possibilities of a joint venture between the groups in order to capitalize projects, increase production and profitability on a silver mine in Bolivia. "These meetings were very positive and we hope to be able to formalize this joint venture so that we can aide in doing very positive things in Bolivia," remarked C.E.O., Jaime Melgarejo.

The C.E.O. also met with officials from Y.P.F.B. (The national oil company of Bolivia) on furthering discussions of doing a joint venture project with Y.P.F.B. The meetings were very positive and a draft of an M.O.U was made. This draft is currently under review by the legal department of Y.P.F.B. "We feel that what we are trying to accomplish with this joint venture is within the guidelines of the new hydrocarbon law," said company C.E.O., Jaime Melgarejo, Jr.

The local branch of PKF was hired to audit the operations in Bolivia for 2004 and 2005. We hope to have our 2005 financials completed by the end of February.

DISCLOSURES:

About Bolivia:

It is believed that over 2 billion ounces of silver has been mined in Bolivia. One of the oldest and most productive silver mines in the western hemisphere is the Cerro Rico Mine in Potosi, Bolivia. It is also believed that Bolivia has the 2nd largest gas reserves in South America.

Tag: Bolivia,mining,FDI,

Why was El Mutún’s Bidding Process Delayed?

A few days back I touched upon MAS “hitting the brakes” on El Mutún project, I did not touch upon the details as they were blurry; however one of my favorite authors has recently written an excellent column about the issue [1]. And though it’s unlikely that Andrés Solíz Rada will ever leave his anti-corporate leftie rhetoric aside, his investigative caliber is still categorical.

The article argues that the process had been manipulated by certain unscrupulous persons to secure the success for the Brazilian bidder Sidersul, despite a much inferior proposal and alleged corrupt practices. The adjudication of the project to a Brazilian partner has always been controversial, given that our neighbor to the east has a powerful steel industry of its own and would eliminate a potential competitor by gaining control of the Mutún reserve. This argument sounds nationalistic, but it really isn’t when we recall recent problems here in the US regarding Brazilian steel imports [2], or we compare basic features of all the proposals.

The column also relies heavily on the ecological consequences of the project –first documented by the Bolivia NGO FOBOMADE [3] - if the partners ended up being the Brazilians. Let me explain, their proposal projects only the primary refining stages, which convert iron ore to sponge iron by reducing the mineral via coal and charcoal generated heat. This implies –according to FOBOMADE- the cutting down of 45 hectares (111 acres) of Amazonian forest daily or 165,000 hectares (407,550 acres) yearly to feed the furnaces. The product obtained would then be shipped (along with the lion share of potential revenues) to São Paulo for further processing and export. According to its critics such operation would put Bolivia in the Kyoto Protocol’s violators list.

Solíz Rada then comments on the proposal by the Chinese corporation Shandong Luneng, which according to his data offers a better deal: more refining –practically ready to export billings and steel slabs- and therefore better margins, financial backing for the construction (I’d say expansion) of the railway network to reach Peruvian ports in the Pacific and a different smelting method using natural gas. A more ecological alternative that would put to work some of our natural gas reserves and fill the gaps in the currently underused gas pipe to Brazil (located at a mere 20 kilometers) from the Mutún site.

Now, before I give credit to the MAS crowd for the pause in the process; I’d rather wait for a positive end and the selection of an adequate partner.

Cited in this post [External Links]: Shandong Luneng, Sidersul, FOBOMADE

Sources and Further Reading:
[1] Solíz Rada, Andrés. “El Bocado del Mutún” Bolpress 01.01.06
[2] Institute for International Economics, “Outlook for US- Brazilian Trade and Investment Under FTAA: Some Lessons from NAFTA”
[3] FOBOMADE, “El Pantanal Boliviano y los Proyectos de Desarrollo” [PDF]

UPDATE: President elect Evo Morales, yesterday denied any claim that his party influenced the delay of the bidding process whatsoever. I wonder if it has anything to do with his recent visit to China...Afterall, Mr. Morales has a nick for settling accords before time is due. Case in point: the "solidarity" price for natural gas with Argentina (pushed for during the Mesa government). Read this and this...

Tag: Bolivia,mining,FDI,ecology,AmazonEvo Morales

Evo Quote of the Day - Let's Complement Each Other

[Yours truly adds: social conscience can be learned, and budgeted for, and publicly traded]:

“Quiero aprender de los empresarios (...) Yo no tengo formación profesional, pero habría sido importante complementarnos. Ustedes tienen la capacidad profesional y yo la conciencia social”

“I want to learn from entrepreneurs (…) I don’t have a professional background, but it’d be important to complement each other. You have the professional capacity and I have the social conscience”

Evo Morales, addressing members of "the business class" in his first meeting with the Civic Committee of Santa Cruz. [1]

[1] Carmona, Ernesto. “Los perdedores de las elecciones afilan los dientes" < http://www.bolpress.com/politica.php?Cod=2006010104> Acceded 01.01.06

Tag: BoliviaTag: Evo Morales

To this Journal's Readers

I just wanted to take some time off for a brief note to sincerely thank the readers of this blog for the support given to this website. This journal is still young (this will be merely the 15th post) but already counts with a small readership of regulars. Special thanks to the folks at Global Voices, Blogs de Bolivia and fellow bloggers that have linked to the site and accepted my comments (poluntic, barrioflores, the democracy center) those references can only help this website grow.

To all these people I wish the best in the New Year!

Interview with the VP

Many observers have seen vice president-elect Álvaro García Linera as the bridge Evo sought to build with the middle class, the intelligentsia and other moderated circles. However, little was ever told about García Linera other than that he was a guerrillero of the EGTK [1] or an academic of leftist views.

This interview with the daily La Prensa, published a little before he was officially announced to run as Evo’s VP, fills in some of the gaps about Linera’s actual perspectives on socialism, how to conduct the government and deal with leftist groups. These answers become even more relevant today, now that MAS has reached power.

My translation follows:

La Prensa (LP): You have been accused of armed uprising and some candidates say you are a terrorist. How do you plan to address this situation?
Álvaro García Linera (AGL): The candidates who are using that [claim], I see that they do it out of fear of debating. Any candidate who surfaces that out of memory gives me a reference point about his intellectual capacity. Because of that absence of ideas, proposals, projects, introspection and reason….that stigma, denigration and mud slinging surfaces. That a candidate uses that as an argument reflects a terrible poverty of ideas.

LP: Has García Linera been one of the ideologues of the EGTK?
AGL: I have been one of the men who have reflected about the EGTK, and that I have admitted in my [sworn] declarations. I have been a man compromised with the EGTK, and my crime, I publicly admit, has been to think, written and reflected. Thirteen years without a sentence, I hope prove the contrary, and justice cannot give a single step to prove the contrary.

LP: What is MAS’ position? Es it a radical left [party]?
AGL: The position is centre-left, and I have been characterizing it that way for the last two and a half years. Why do I say MAS is centre-left? Because we couldn’t qualify the project of changes MAS wants to take forward as communist or communitarian, it doesn’t have that dimension. An [example of the] radical left is COB [2] or maybe Quispe [3].

LP: Doesn’t MAS want a socialist government?
AGL: No, no way, because –on top of it- it’s not viable. It’s not viable because socialism can only be built on the base of a strong, organized proletarian presence. The socialist utopia is the extreme maturation of capitalism. In Bolivia there’s no capitalism. In Bolivia 70 percent of the urban workers work in the family economy, you don’t build socialism on the base of a family economy; you build it on the bases of industry, which there’s none of in Bolivia. You don’t build socialism on the basis of the 95 percent of rural population living on a traditional communitarian economy.

LP: What kind of system, then, does MAS want to build?
AGL: A type of Andean Capitalism.

LP: What is an Andean Capitalism?
AGL: It’s a capitalist regime where family, indigenous and peasant potentials are balanced and are articulated around a national development project and productive modernization. If you want to build the future, what is the model for Bolivia? A strong State and that is capitalism; the State is not socialism, it’s a strong State in hydrocarbons, foreign investment, local private investment, the family economy and small businesses and communitarian economy. It’s not even a mixed system.

LP: Why didn’t García Linera gain the support of Jaime Solares, of the COB or Felipe Quispe of MIP?
AGL: I proposed to myself to talk with all organizations, included those I had personal differences with. Because of respect to its historical trajectory we went to the COB, despite the behaviors of its directors in recent times. It’s clear that today’s COB is not the COB of the 80’s. The COB is just one more, a small, weak movement. In the other hand, I consider Felipe Quispe to be much more important and not having forged an alliance with Quispe is something that hurts me more, because he represents an indigenous force in the Aymara altiplano.

LP: But, Why haven’t you being able to forge that alliance?
AGL: We first approached COB because of this, because it wasn’t a decisive social movement, important yes, because of its historic relevance which we tried to pull, but it wasn’t accomplished. Why? I would say because of their leadership and the distribution of congressional seats.

LP: Did COB wanted a share of power?
AGL: Everybody wants shares of power.

LP: Did Jaime Solares want to lead the alliance with Evo Morales?
AGL: Solares wanted the COB to have a greater protagonism, to be the organization that summoned [everyone], and I believe that at this stage there’s no single social movement who can attribute itself that power, because there’s no national movements in Bolivia. All social movements are now regional of local. And wanting to assume that attitude of “I’m the one who did something and because of that I have national relevance” doesn’t work anymore; we are not dealing with the COB of the 70’s. Here there’s a sort of melancholy, of a force that doesn’t exist anymore.

LP: Does this mean that you didn’t accept that COB be the one who summoned [the social movements, voters]?
AGL: I tried to reflect that that was impossible, that the possibility of an articulator COB was no longer feasible. That COB is just one more of the movements, and those words involved power quotas, leadership quotas, and definitions of whom would be president, vice president and congress representatives.

LP: And with MIP?
AGL: The same, the same.

LP: So power quotas influenced the process…
AGL: No, not power quotas, because power quotas sound ugly. But electoral power structure; I mean distribution of congressional seats. The important topic was who went first, Felipe or Evo Morales? President Felipe and Evo Morales second? Evo Morales did not accept that because he has more of a national leadership; Felipe has a more regional leadership.

LP: Are the social sectors who have managed to place around MAS sufficient?
AGL: Not everyone, not all [social sectors] went. But it’s not because we had to place actors around MAS, but because the idea I proposed myself was to form a project of united social movements.

LP: But, is the project actually marching?
AGL: I believe there have been plenty of advances. I can point out some sectors, national and departmental. FEJUVE in El Alto, we still need the signature, which depends a little bit of the debate, but FEJUVE has already made its position made.

LP: Is there an issue of distribution of congressional seats and leadership, there as well?
AGL: It has to do with electoral power, but we have advanced a lot.

Notes:

[1] EGTK or Ejército Guerrillero Tupac Katari is one of the few Bolivian sub-national groups to be classified as a terrorist organization by the U.S. Government. Its last documented attacks ended in the mid nineties.
[2] COB or Central Obrera Boliviana is the main worker’s (originally miner’s) union of Bolivia, however its power and influence has decreased steadily for the last decades, as it has turned more and more radical. It’s currently presided by trostsky-ite Jaime Solares.
[3] Felipe Quispe, the leader of MIP or Movimiento Indígena Pachacuti, and indigenist/separatist party, Quispe was also a leader of EGTK.

Source: Buitrago, Jaime E. García Linera desnuda los intereses de la COB y el MIP. La Prensa, Agosto 30 2005.

Photo:

Cited in this post [external links]: Álvaro García Linera (MAS biography), COB, MIP, EGTK

UPDATE: BBC interview with Evo Morales and another one with Alvaro García Linera. A new freakishly titled blog about Morales and another note from Dan the missionary man talking about Linera .... And I can’t resist the temptation of noting that prank call… the second I found out about it (by reading a post in indymedia, go figure) my memory flashbacked to a TV character of my childhood, and his trademark phrase: “Se aprovechan de mi nobleza!” For a second, I stood in awe.

Tag: Bolivia,MAS,socialism,capitalism

Today's News Catch: December 21, 2005

MAS Hits the Brakes on the Mutún Bidding

"El MAS posterga el Mutún; decretan paro en la frontera" Nuevo Dia, 21 de diciembre 2005.

A process that begun months before election dates where even selected, and has for decades being in awaited by both cruceños and bolivianosm, has being halted by MAS pressures. MAS wants this “little” project to be executed during their government, and as such have decided to delay the opening of envelopes (2nd step in the bidding process) for 60 days. Let’s just hope none of the international companies involved withdraw their proposals.

See story, see prior post about this topic.

Bolivia's "Big Oil's" First Public Comments

“Bolivia's Morales to revise Repsol YPF contracts, denies expropriation of assets” Interactive Investor.

A lot of hype has been rising about Repsol’s stock performance in the Madrid markets, about the fears of expropriation and future of contracts. I’ll try to keep you posted on official press releases flowing out of this company; this is the first note in that respect.

See Story

“Bolivia's victor worries BG”, Telegraph (UK) By Malcolm Moore (Filed: 21/12/2005)

“BG Group, the oil and gas explorer, yesterday threatened that future investment in Bolivia, where it is one of the largest foreign operators, may be cancelled because of the country's new president…. During his campaign, President Morales questioned the legality of 70 oil and gas contracts. He is expected to revoke the ownership of gas by foreign companies once it has been pumped above ground and to tinker with the length of some deals. He did not intend to confiscate or expropriate drilling rights.”

See Story

Sovereign Debt (Fitch) Ratings Remain Unchanged

“Fitch: Bolivia's Ratings Unchanged After Elections” Fitch Ratings (Press Release) 21/12/2005

Some excerpts of this press release, I’m particularly concerned about sovereign debt issues, given that negative ratings will affect interest rates/margins on future issues of debt. Higlights are mine:

“Fitch Ratings today commented on the Republic of Bolivia's general elections held on Dec. 18, 2005. Fitch rates Bolivia's foreign and local currency issuer default ratings 'B-' with a Negative Outlook…While Fitch is concerned about the politician's campaign rhetoric, which challenged the liberal economic policies followed by recent governments and the regional policies of the U.S. that advocate the eradication of coca cultivation, the Morales victory should give his government a greater degree of legitimacy than that enjoyed by recent predecessors, and could lead to improvements in governability.

Furthermore, the carrot of the Multilateral Debt Relief Initiative, which could lead to 100% debt relief from the IMF and the World Bank as early as next year, may provide sufficient incentive to maintain important aspects of Bolivia's macroeconomic framework and to respect property rights. The targeted 100% debt relief of IMF and World Bank Debt outstanding as of Dec. 31, 2004, would cut Bolivia's public sector debt by approximately US$2.1 billion, potentially reducing the sovereign's debt/GDP ratio to 54% by the end of 2006 from a forecasted 75% at the end of this year. (…)

In spite of a prolonged period of social unrest and political uncertainty, Bolivia's president-elect inherits a growing and stable economy due to a benign international environment and the government's efforts to tighten fiscal policy. Real GDP growth is likely to reach almost 4.0% this year, underpinned by exports of hydrocarbons and minerals. High international commodity prices and record export volumes also benefited Bolivia's external accounts, with export growth reaching 23% for the first 10 months of 2005, compared with the same period in 2004. International reserves have grown to US$1.7 billion, or almost six months of imports of goods and services, the highest level in Bolivia's history. For the first three quarters of 2005, the combined public sector balance reverted to a slight surplus from a deficit of 5.5% of GDP in 2004 (including grants). Fiscal consolidation and growth have been contributing to an improvement in Bolivia's debt ratios, while inflation remains in single digits. Nevertheless, private investment, particularly foreign direct investment, has declined significantly in recent years.

See Complete Press Release

UPDATE: International Monetary Fund Extends 100 Percernt Debt Relief to Bolivian

The executive board of the International Monetary Fund Wednesday made good on its promise to cancel about $3 billion of debt it is owed by 19 of the world's poorest countries. IMF Managing Director Rodrigo de Rato said this is an historic moment that allows recipient countries to reduce poverty. Debt cancellation has long been championed by anti-poverty advocates. And now 19 of the world's higly indebted countries, one of which is Bolivia have been condoned of their public debt to this institution.

See Press Release

Tag: Bolivia,Evo Morales,FDI,IMF

Ministers to be Appointed, non-Cocaleros need not apply

Today, Jornada published a note entitled: “Evo’s Ministers Must Have the Approval of the Federations" [2] scary indeed, since the specific quotation says “ministers will necessarily have to surge from the six federations…” Refering to the Six Federations of Coca Producers of el Chapare. So that effectively eliminates 99.9999 percent of the Bolivian population, and anybody who’s not a cocalero or anybody who’s not a coca syndicate boss. I hope that was biased editing from the part of the newspaper. Honestly.

Now seriously, tomorrow, president-elect Morales will be meeting with the upper echelons of the MAS party, the heads of the “social movements”, and other party’s representatives in the city of Cochabamba, with the objective of distributing all major government posts and offices. As it has always been the case, (with traditional parties as well) this is about the time when “pegas” are distributed.

I can’t resist the temptation of naming a few people who are sure to play an important part in the next cabinet, so be on the lookout for them:

• Iván Iporre. - He’s Evo’s Karl Rove, so you get the picture.

• Carlos Villegas Quiroga. - An economist, mostly known for his work as a director of San Andrés University doctoral program on development and his punditry in the gas export issue. As a matter of fact I spent the last half hour downloading papers he’s written on the subject. He’s set to occupy the Ministry of Economic Development post, which will determine a lot gas/oil policy.

• Juan Ramón Quintana. - A former army officer turned think-tanker, Quintana directs the Observatorio de Seguridad y Democracia (ODyS), and is your foreign press friendly go-to guy for military and police issues. He’s expected to be appointed Minister of Government.

• Gral. (r) César López. – A retired general, López has been a link between Evo and the corps; some point him out as the strategist behind our “missile crisis”, which was a huge propaganda boost for Evo. Old timer nationalist, with some leftist views, I don’t know much about what he plans in terms of rearmament and strategy.

That’s all so far, we’ll see if my guesstimantes are close, and now to close today’s posting a new feature of this blog:

Evo Quote of the Day [Protection With Exceptions]:

“El MAS protegerá la propiedad privada, excepto esas tierras ociosas e improductivas que tienen que revertirse en favor de quienes quieran trabajarla".

(translation) “MAS will protect private property, except those idle and unproductive lands, which have to be reverted in favor of those who what to work them”

Evo Morales [1]

[1] Evo Morales anuncia cambios en la política del gas y la coca. La Razón. December 20, 2005
[2] Ministros de Evo deben contar con el aval de las Federaciones Jornada, December 20, 2005

Cited in this Post [External Links]: ODyS

Tag: Bolivia,Evo Morales