Workers' Liberty

According to the Financial Times, Evo Morales has announced that he is not going to compensate foreign companies for the state's "takeover" of their capitalised subsidiaries in Bolivia. He bolshily proclaimed that "We don’t have to talk, dialogue or negotiate when it comes to the policy of a sovereign state" - scary stuff for the multinationals...

Except what Morales says doesn't really appear to be true - he's already said that the state is going to be buying the companies' shares off them. In fact, what he refuses to compensate them for is not the seized property, but the end of the illegally drawn-up tax system given by previous regimes! He said that "energy companies should only be compensated for physical assets, but not for loss of operating concessions - so long as they have recouped their investments via profits".

The "so long as they have recouped their investments" clause in this plan also has a nasty implication - i.e. that the Bolivian state will not attack any company which hasn't been able to screw the country over effectively yet. Why is it "unfair" to expropriate companies which haven't recouped their investments yet - does Morales think they got the capital without exploiting anyone? Bolivia has had countless billions of dollars taken out by international capitalism in profits, and even if he seized all their assets and installations without compensation - which he won't - Morales couldn't possibly come close to inflicting similar damage on the multinationals.

As an example of the government's policy, came on Wednesday,when Jorge Alvarado, the head of Bolivia's state energy company YPFB said Bolivia would compensate Petrobras for the partial expropriation of its two oil refineries. BBC presents this as if it were in contradiction to what Morales announced today - surely it is a perfectly logical extension of the above quote. The BBC article, however, is based around a false assertion in the first paragraph, which is that Morales will not compensate assets taken by the state.

Indeed, presumably the reason that Morales says in such a blunt manner that there's no reason for him to talk or negotiate with other governments is that he's really not doing anything that should concern them. In fact, he is forcing multinationals to sell him assets, not genuinely seizing them.

Worryingly from the FT's point of view, Morales says he plans to extend nationalisation into mining and land ownership. All of this seems like a very sudden left turn - just one month ago he said that his party MAS was "under no obligation" to nationalise the airline LAB, which was going bankrupt, using the justification that he had only promised to nationalise gas. But we must maintain a critical approach - particularly given the clear divide between Morales' rhetoric and the reality of his government.

Indeed, FT reports "Vice-President Alváro García and Walter Villaroel, the mining minister, have both ruled out expropriating foreign-owned mining assets", (my emphasis).

Bloomberg compares Morales' plans to nationalise land to those of Chavez's agricultural "Path to Socialism". What the Venezuelan president has done, rather than expropriating large, productive capitalist concerns in the country, has been to put unproductive factories and farmland under public control. He will not take on the ruling-class head on by nationalising serious sectors of the economy - oil production, for example, is simply heavily taxed. What Morales announced about land ownership earlier today sounds similar - "Nationalization will not stop to oil resources, we'll extend it to land... there is huge land ownership, especially unproductive land, in our country”.

While of course reinvigorating unproductive and under-used factories and land would be an important reform for a future workers' government to make - as part of a socialistic programme of economic development - it must not be the sole focus, as is the case in Venezuela and may well be in Bolivia. Nor is the justification that the land is "underused" the only reason why it is right for the bourgeois landowners and industrialists to be expropriated - their control is exploitative and their "property rights" are based on a history of thieving and pillage of once commonly-held resources. Of course, we cannot expect reformist governments to overthrow property relations - their authority, and indeed their state structures, rely on the existing order. Chavez and Morales will always ally sections of their national bourgeoisies to themselves rather than getting rid of the whole capitalist system.

Indeed, socialism could never exist as an island in a couple of developing countries in South America, never mind only in weak parts of those countries' economies. The answer for economic development in both countries is not demagogic rhetoric about "seizing" land on which the deeds have expired, but of the state expropriating the owners of key economic centres such as hydrocarbon fields and large farms.