Pre-conference seminar “Resources Sovereignties in Latin America” (Tues 7 May)

These are notes (taken by Trevor Stack) from the seminar held on Tuesday afternoon before the main public conference, which starts on Wed 8 May.

Einar Braathen (on Brazil)

Now drilling into new reserves off Brazilian coast in deep waters and through 2000-3000m salt layer, which unprecedented

  • in vicinity of Rio, Sao Paolo, which already rich cities: likely to accentuate differences across county
  • huge amount of projected oil revenue > political implications

History

“Oil has to be ours” slogan of movement from 1939 nationalisation by Gertulio Vargas (though little production then): still used by Lula

  • Gertulio Vargas modelled on Mussolini: “New State” building national industry, though later supporting US in war; President again 51-54
  • 1954 Petrobras monopoly was denounced by US as communism, but continues under military who believe in state intervention
  • 1990s Cardoso president > successfully controls inflation etc. with priority to bring oil sector into international market: concessions given to top bidders, run as private property for 99 years

Lula era

  • Lula 2002 former union leader with “oil has to be ours” slogan, but akin to New Labour – sends letter reassuring business community
  • corruption with kickbacks funding campaigns (not directly to politicians but still benefits them when win) > convicting all party leadership except Lula

2007 discovery of new fields > laws that established ‘neo-extractivism’

  • need to accept capitalist economy but Petrosal owns oil and 50% of oil produced goes into a ”social fund”
  • Petrobras is operator; other constraints incl. 60% of all supplies have to be produced in Brazil (to build national supply industry and develop technology) though this slows down production

Breaking Brazilian consensus

  • Chevron 2011 accident: politicians take ‘ecological’ stance but perhaps because revealed Chevron campaigned against Lula in 2002
    • transpires that lack of prevention etc. and low investment in environment; also that Petrobras routinely leaks, too
    • distribution of royalties
      • most was going to federal government and states and municipalities in vicinity of fields (Rio etc.)
      • new law distributes more equally across country; however, still little monitoring of use of money by politicians

Left claims that Lula regime is neo-imperialist

  • not ‘doing it alone’ unlike Venezuela and Bolivia
  • Fernanda Wanderley: Bolivia dependent on Brazil economically, but accuses Brazil of being imperalist

Fernanda Wanderley

Energy policy depends on continuous negotiation, dispute and interpretation within political fields

> rational justification is alone not sufficient

For example:

2010 gasolinazo in Bolivia: suddenly announced policy to reduce hydrocarbon subsidies, thus increasing by 72% price of gas and 82% of diesel

> gives rise to mass protest, first one against Evo Morales government, and took time for government to restore its legitimacy

Why was Morales government – which had strong popular mandate – unable to carry this policy?

  • because government only gave technical justification for policy, made no other attempt to justify to citizens
  • government was shocked by violent response, thinking it had sufficient legitimacy to carry through policy

Therefore:

Need to understand how policies interpreted by citizens and how will respond

  • citizens had understood that nationalization was about people controlling resources, as well as enjoying fiscal wealth, so hard to understand why government still concerned to attract foreign investment

This is common in countries that rely heavily on non-renewable energy

  • although state claiming sovereignty over natural resources, in fact find that unable to guarantee this, and difficult to satisfy popular expectations, leading to polarised conflicts
  • need for better institutions in which different social sectors are represented, prior to announcing policies, to avoid polarisation shown in gasolinazo
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s