Saturday, May 13, 2006




In front of a major meeting of world leaders in Vienna, including UK Prime Ministe Tony Blair, and UN Chief Kofi Annan, and the leaders of Spain and Brazil, Venezuela's Hugo Chavez and Bolivia's Evo Morales laid down the law on how their gas and oil rich countries would now deal with the rest of the world.

The socialist left presidents refused demands by the EU to slow down their radical policies on returning the wealth of their nations to the indigineous peoples who had long missed out on the massive profits siphoned away by foreign energy corporations.

But Morales and Chavez declared a new era of politics for, and by, the people has arrived.

The meeting brought together more than 60 leaders of the European Union and Caribbean and Latin American countries. UK Prime Minister Tony Blair demanded Chavez and Morales show a "responsible approach" to the ongoing debate.

Both Venezeuala and Bolivia are taking back control of the oil and gas mining and processing operations that have delivered spectacular profits to some of the largest energy companies in the world for years, but returned little to the people of those countries.

Bolivia is now seizing natural gas mining and processing facilities in a program of nationalising the valuable assets, and demanding the foreign-owned corporations sign new contracts (which are expected to deliver larger profits to Bolivians), if they wish to continue to do business there.

Likewise, Venezuela is nationalising the once privately owned energy companies that operate within its borders, extracting oil from one of the biggest natural reserves in the world.

Chavez made it clear, in an address to the gathered leaders, that he has big plans and he has only just begun his monumental shake up the old systems.

"Neo-liberalism has begun its decline and has come to an end," Chavez said.

"Now a new era has begun in Latin America. Some call it populism, trying to disfigure our beauty. But it is the ... voice of the people that is being heard."

Chavez and Morales are just two of the new leaders of a wave of leftist politicians elected across Latin America, after years of much-heralded IMF and World Bank economic reforms, and globalisation programs, failed to lift the countries out of poverty.

UK PM Tony Blair was quoted as saying in response to the speeches by Morales and Chavez, "What countries do in their energy policy when they are energy producers like Bolivia and Venezuela matters enormously to all of us. My only plea is that people exercise the power they have got in this regard responsibly for the whole of the international community ... people are worried about energy supply in the future."

The governments of Brazil and Spain, at the Vienna meeting, raised strong concerns about the energy interests they own in Bolivia, fearing loss of control, and loss of profits, through Morales radical plans for nationalisation.

Like the UK, Spain and Brazil are vastly worried about whether these new Morales-backed programs of reform will affect the flow of energy from Bolivia, as such interruptions would have direct effects across numerous businesses and industries in Spain and Brazil.

Likewise, other EU leaders expressed similar concerns, led by Tony Blair.

The UN secretary general, Kofi Annan, told Morales and Chavez that international investors had to have guarantees of ongoing and long-term stability during the major reforms.

"Without that assurance," Annan said, "you may be disrupting all economic activities."

The foreign minister of Brazil demanded Bolivia pay compensation to Petroleo Brasileiro (Brazil's state owned oil company) if Morales seizes control of the company's assets during the new contract negotiations.

"If investments [assets] are passed to a different owner, they need to be compensated," the Brazilian foreign minister, Celso Amorim, said during the Vienna summit.

Bolivia's Morales tried to reassure the Spanish foreign minister, Miguel Angel Moratinos, by releasing a statement to reporters which read : "We hope that in the term of 180 days we can establish to decide new contracts of mutual interest true and lasting legal security exists for companies."

But the UK and the EU may need much more solid reassurances than a media release. For the moment, Morales and Chavez are standing their ground, while the United States, through Secretary of State, Condaleeza Rice, continue to pile on the pressure.

But intensifying diplomatic demands may do little to change the minds of Chavez and Morales. They were elected partly due to their plans to reform the oil and gas industries of their countries, and deliver more profits back to their people.

So far, they are keeping to their promises.

(Sources : Associated Press, Rueters, The Guardian, The London Times)

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