Bolivia Plans to Nationalize More Sectors

The Associated Press
Tuesday, May 2, 2006; 9:48 PM

LA PAZ, Bolivia -- Bolivia's leftist government said Tuesday it would extend control over mining, forestry and other sectors of the economy after President Evo Morales nationalized the country's huge natural gas industry. Foreign governments warned relations could be damaged.

Soldiers were posted at 56 gas installations around the country a day after Morales issued a decree that analysts say could drive petroleum companies from South America's poorest nation and isolate Bolivia from important allies like Brazil and Spain.

"We're not expelling any company, but they will not earn much _ not like before," Morales told Venezuela's Telesur on Tuesday. "We hope they'll remain partners and if they don't respect these laws, we'll make them respect them with political force."

The move solidifies Morales' role alongside Venezuela's Hugo Chavez and Cuba's Fidel Castro in Latin America's new axis of socialist-inclined leaders united against "capitalist, imperialist" U.S. influence.

In Peru, Ollanta Humala, the nationalist presidential hopeful headed to a runoff election, has said he too would force foreign mining and gas companies to renegotiate contracts. But on Tuesday, Humala softened that message.

"We respect the sovereign decisions of our brother nation Bolivia, but what I want to say emphatically is this: We have never talked about either state takeovers or expropriation," Humala told reporters.

Morales said Monday that the gas decree "was just the beginning, because tomorrow it will be the mines, the forest resources and the land." Morales' planning minister earlier this month spoke of plans for "drastic reforms" of mining laws.

On Tuesday, Vice President Alvaro Garcia Linera said mining companies could face higher taxes and royalty payments and that the government will intensify enforcement of existing laws to break up big underdeveloped land holdings, apparently to turn them over to the poor.

The government also will crack down on foreign timber companies violating conservation laws, Garcia said, and would steer companies to export finished wood products rather than raw timber.

While the gas nationalization decree was not unexpected, analysts said the images of soldiers toting automatic weapons outside refineries and gas fields were reminiscent of military dictatorships past.

"With this move, he risks alienating natural and otherwise sympathetic partners like Brazil and Spain," said Michael Shifter, a Latin American analyst at the Inter-American Dialogue think tank in Washington. "Ordering the military to seize the natural gas fields is unnecessarily confrontational and antagonistic."

In an apparent attempt to explain the move to his neighbors, Morales will meet Thursday in the Argentine city of Puerto Iguazu with Argentine President Nestor Kirchner, Brazilian President Luiz Inacio Lula da Silva and possibly Venezuela's Chavez.

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