Leftists Lighting a Fire in South America

May 2, 2006 — -- Hey President Morales, you just came back from a summit with America's arch enemies, Fidel Castro and Hugo Chavez ... what are you going to do now?

That question was quickly answered Monday by President Evo Morales when he nationalized Bolivia's national gas industry. The announcement came just two days after he signed an alternative trade pact with Cuba and Venezuela, and the bold move is sure to anger both President Bush and private energy companies that do business in the Andean nation.

Morales immediately ordered soldiers to occupy Bolivia's gas fields, and he told energy companies operating in the country that they have six months to hand over majority control of their holdings to his government.

Bolivia has South America's second-largest natural gas reserves and those companies affected by the announcement include such major producers as Britain's BG Group and U.S.-based Exxon Mobil. Multinational corporations last year produced 100 million cubic feet of natural gas in the country and now they are expected to hand over 82 percent of their production to the Bolivian government. The companies are being allowed to keep 18 percent, only because the Bolivians are unable to tap all of its natural gas on its own.

Morales, a leftist, won Bolivia's presidency in part by lashing out against foreign corporations, saying his country's natural resources had been looted by these companies. Bolivia is South America's poorest country and poverty remains a large factor in its politics.

This past weekend, Morales met with Presidents Chavez of Venezuela and Castro of Cuba to denounce the United States and its trade policy in the region, which these leaders say hurt the poor of the Southern Hemisphere.

The announcement Monday by Morales is one more attempt to redistribute the region's wealth, and the summit was one more attempt to stall U.S. free trade agreements with countries in the region. The United States has signed nine such agreements with Latin American countries.