Towering over La Paz Mayor Juan del Granado, Mexican President Vicente Fox (standing six-foot-five) was given the key to the city and the prestigious Condor of the Andes. However, his visit was not well received by all. Several MAS Congressmen showed their discontent with Fox’s visit. (Picture here)
En esa sesión, los diputados Iván Morales, Germán Yucra, Félix Santos, y el senador Bonifaz Bellido, todos del MAS, se pusieron pasamontañas, como las que usan los zapatistas de México. Luego explicaron que fue una señal de desaprobación a la gestión de Fox. Así recibieron a un invitado oficial del Estado boliviano, durante una sesión de honor.
Yet, Fox’s visit was deemed successful as an eye-opening trade deal to export 400,000 tons of soya was signed, which could also open the door to a possible sale of Bolivian gas to Mexico.
At the press conference held on Tuesday, Fox acknowledged Bolivia’s support for the Mexican candidate Ernesto Derbez to head up the Organization of American States. He also recognized Bolivia’s call for a return of access to the sea.
“Este mismo concepto, el concepto de la unidad, nos lleva precisamente a trabajar con vehemencia, con convicción y con pasión para apoyar esta demanda marítima, este diferendo que hay entre estos dos países”, afirmó sobre la demanda marítima boliviana.
All of this talk of trade between two Latin American countries comes at a time when Congress and the President have a tough decision on what to do with the gas reserves.
Under the current law, Bolivia has one of the lowest royalty rates in the world; the new legislation would bring it in line with other Latin American countries, which charge on average from 25 percent up to more than 50 percent in levies, said Victor Hugo Carazas, senior adviser to the Bolivian Congress on the gas issue.
See the Economist magazine’s graphic on the comparison across Latin America.
So far, the Senate passed a law that would require 18% royalties plus a 32% flat tax, which would obligate the companies to adhere to this new change. Now Mesa must decide whether to sign or veto.
If the Lower House approves the measure as expected, the president may make good on a threat to veto the bill, and brace for explosive street protests. If he signs what the oil sector denounces as a ”confiscatory law,” companies have threatened to take the country to international arbitration, where industry analysts say Bolivia will likely lose. And Mesa could face protests anyway from those who think the royalties are not high enough.
Some sectors are calling for a full-scale nationalization. Perhaps the law passed by the Senate is a compromise as they are banking on the fact that the companies may be bluffing. They argue that the reserves are far too large to ignore.
”A beggar sitting on a throne of gold” is how a former Bolivian secretary of energy describes his country’s frustrating predicament.
Now the question is how much of that gold will the beggar receive?