Tue, Jul 20, 2004 - Page 7 News List

Bolivian referendum appears to pass

FOSSIL FUEL Indigenous outrage over government policy led to the previous president's ouster. His successor has staked his administration to the vote

REUTERS , LA PAZ, BOLIVIA

Aymara Indians block a road in the city of El Alto, Bolivia, to protest the national referendum on Sunday.

PHOTO: AP

Bolivians faced the unwieldy task yesterday of turning their historic referendum over the Andean nation's natural gas reserves into real policies to tighten state control over the industry.

The referendum, seen also as a vote of confidence in President Carlos Mesa, essentially asked Bolivians if they wanted to increase state participation in the impoverished nation's energy industry and export the gas abroad.

Mesa, who was installed nine months ago after his predecessor was kicked out by an Indian revolt, declared victory in the referendum late on Sunday, saying the country had backed each of his proposals.

Early results appeared to support his claim, with the National Electoral Court's Web site showing a majority of Bolivians in support of his proposals with nearly 8.5 percent of the voting stations counted.

Unofficial counts by state and private television also showed Mesa had come out ahead in what analysts say is a vote that will lend his government legitimacy in a country increasingly divided between the rich elite and the millions of poor Indians who make up the majority of its 8 million people.

But political analysts say the referendum's questions have been phrased so ambiguously that interpreting them and enacting legislation presents another challenge for the 50-year-old leader.

Mesa has no formal political support in a Congress known for its internal squabbling.

"This is undoubtedly a victory for Mesa. But the government has only overcome its first obstacle. Now these referendum proposals must go to Congress and that will be another battle. The difficulties may have just begun," said Jorge Lazarte, a political analyst.

Fury at a US$5 billion plan to export gas via Chile, Bolivia's historical enemy, lay behind a siege of the capital by Indian groups in October in which dozens of protesters were killed. The violence led to the ouster of pro-Washington president Gonzalo Sanchez de Lozada.

Mesa, his replacement, called the referendum to appease Indians, who made nationalization a rallying cry of October's revolt. He turned the election into a vote of confidence.

Defeat in the referendum would have forced him from office and plunged Bolivia, with a history of coups, into civil unrest.

The referendum was seen as the best of the worst by foreign investors, given that a "no" vote would have plunged Bolivia into chaos. Foreign companies will have to deal with stronger state controls and higher taxes.

Oil companies with operations in Bolivia include Brazil's Petrobras, Spain's Repsol, France's Total and Britain's BG and BP.

The vote may come as a relief to Washington, which feared that more unrest in Bolivia, the world's third-largest source of coca leaf used to make cocaine, could lead to more drug smuggling from an Andean region where there is growing indigenous anger at "gringo imperialism."

The vote could also send a political signal across Latin America, where democratic leaders from Argentina to Peru face voter backlash after a decade of market reforms that many argue have benefited foreign firms and the rich.

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