From the article:
When Bolivian President Evo Morales announced plans to nationalize his country's oil and natural gas resources in early May, he did more than lay out a promising path for development. He also provided an ideal opportunity to illustrate how large segments of the U.S. and British press have adopted roles as watchdogs for corporate globalization. Since Bolivia's energy exports go to Brazil and Argentina rather than the United States, and since the nationalization is unlikely to significantly alter the price of natural gas on international markets, the direct impact on our country is minimal. Yet in the weeks since Morales took action, we have been treated to a wealth of hysterical commentary.
[. . .]
New York's Newsday also worked up a rabid editorial assault. There, columnist James Pinkerton derided Bolivia as “a country that is nationalizing, or, if you prefer, stealing, foreign-owned assets.” The paper's editorial page then grouped Bolivia with Cuba and Venezuela in an “Axis of Idiocy” and asserted that “nationalization of major industries has proved to be a road to economic ruin in an era of globalization.”
Given that little nationalization of major industries has occurred in this era of globalization, Newsday left readers wondering about how this idea has been “proven”—at least to anyone who wants evidence instead of just blind market ideology. Nor did the paper give any indication why an increasing number of Latin American countries are inviting sure “failure” by bucking the policies of neoliberal globalization. For its part, the Los Angeles Times gave some insight by remarking, “It's true that [Bolivia's] resources have long been exploited by foreigners with little benefit to the indigenous population.” But it nevertheless contended that “sending in the army to take over the gas fields isn't the answer to Bolivia's problems.”
What the alarmist viewpoints lack most is context. In predicting economic disaster for a re-nationalized Bolivian energy sector, the editorials turn a blind eye to the two-decade disaster known as neoliberalism. In the 1980s Bolivia was on the cutting edge of the trend toward privatization, adhering to an International Monetary Fund (IMF)-recommended structural adjustment program. The pro-corporate reforms proved profitable for the multinational energy companies involved, but they utterly failed to benefit the Bolivian people. Today 64% of the population lives in poverty, with a majority of people scraping by on less than $2 per day. A March 2006 report by the Center for Economic and Policy Research shows that, according to the IMF's own data, real per-capita gross domestic product (GDP) in Bolivia is lower now than it was 27 years ago.
[. . .]
For all their professed concern about democratic reform, this is a point that the critics consistently miss. Morales was elected in a landslide on a platform vowing nationalization. That he actually kept a campaign promise may seem bizarre to the watchdogs of corporate globalization, but it's something that should be lauded. With their commentaries filled with alarm, too few papers took note of a remarkable development: This time, when democracy and neoliberal economics collided, democracy won.
Raul Zabechi, writing at Foreign Policy in Focus, explains that far from recklessly thumbing his nose at foreign oil companies, the decision to nationalize was in some ways Morales' only responsible choice in the wake of the failure of the FTAA in November 2005 as well as the US's aggressive efforts to adopt "free" trade deals with other countries in the region. On top of this, Morales has come under strong pressure from his citizens, mostly peasants, miners and many others who have been demanding the nationalization since the beginning of street protests in October 2003. There have even been arguments advanced that the privatization that took place in the 1990s, since it wasn't approved by Congress, was not constitutional in the first place.
This, along with the other pro-poor populist economic positions that made up the MAS platform, is in large part what led to Morales' historic electoral victory in the first place. Nationalizing (or, if you prefer, de-privatizing) the oil sector was a key campaign promise. Not going through with it would be akin the Bush raising taxes in 2005.
Nevertheless, as Engler's article makes clear, foreign corporations and Western media sources seem to be having a difficult time understanding how Morales would choose to listen to the will of his citizens as opposed to the economic concerns of foreign oil companies.
The nationalization has uncertain political implications for Bolivia and the other Mercosur nations (Argentina, Brazil, Paraguay, and Uruguay) that are directly challenging the hegemony of the US and Neoliberalism in South America. It's unclear whether the nationalization will have positive repercussions for his nation's economy and to what extent it has damaged relations with Brazil (Petrobas was a major oil company operating in Bolivia.)
Finally, it's important to keep in mind that what occurred isn't wholesale privatization at all, or the confiscation of a foreign country's assets, but rather the annulment of previously-negotiated contracts and the imposition of a new royalty for these companies to continue to operate in Bolivia. As economist Marc Weisbrot notes: "The biggest companies, Exxon-Mobil, Chevron, Texaco, they're not going anywhere, and I don't expect that these companies will go away, either. They'll be able to still make money. They won't make the kind of super-profits that you see the big oil companies making today, for example, big U.S. oil companies, but they'll still be able to make money."
For the inside story of the nationalization, Inter Press Service has a fascinating account, including an exclusive interview with Manuel Morales Olivera, general adviser to Bolivia's state-owned oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB).
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