BOLIVIA: MORALES' MAY DAY WEEKEND

C O N F I D E N T I A L LA PAZ 000655

SIPDIS

E.O. 12958: DECL: 05/04/2019
TAGS: PGOV PREL KDEM PHUM PINR ENVR ASEC BL
SUBJECT: BOLIVIA: MORALES' MAY DAY WEEKEND

REF: A. 08 LAPAZ 1024

B. 08 LAPAZ 1018

C. 07 LA PAZ 1215

D. 06 SAOPAULO 464

Classified By: A/EcoPol Chief Brian Quigley for reasons 1.4 (b, d)


1. (C) Summary: Continuing a three-year tradition of May Day
nationalization announcements, Bolivian President Evo Morales
on May 1 nationalized AirBP, a jet fuel provider and
subsidiary of British Petroleum. Morales announced the
nationalization in conjunction with several supreme decrees
regarding workers rights. The same day, National Electoral
Court President Jose Luis Exeni announced his immediate
retirement "strictly for family reasons." Morales replaced
Exeni within hours with Roxana Ibarnegaray, who served on the
court from 2000 to 2004. Post welcomes the relatively quiet
May Day weekend, but notes the ongoing government
investigation into an alleged terrorist cell continues to
dominate the headlines. End summary.

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Continuing Tradition, Morales Nationalizes Company
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2. (U) As part of his traditional May Day speech, President
Evo Morales announced the pending nationalization of AirBP, a
subsidiary of British oil company BP. AirBP, which
commercializes and sells jet fuel throughout Bolivia, will
become part of state oil company YPFB. A BP company
spokesperson said the company "had agreed to a handover of
our operations," and that while "we were surprised by today's
takeover process (when army troops surrounded the company's
headquarters),we will continue to support the handover."
Hydrocarbons Minister Oscar Coca said the government would
enter a 120-day negotiation with AirBP to agree on the
company's valuation. Coca added that the company had shown
itself to be willing to sell the company to the state.
AirBP, which owns 12 jet fuel stations at Bolivian airports
and has approximately 90 employees, was sold to BP in 2000 as
part of then-President Gonzalo Sanchez de Lozada's
"capitalization" program.


3. (C) AirBP reportedly earned the ire of Morales
administration members by selling jet fuel to private airline
company Aerosur at discounted prices, including selling fuel
for international flights with a small domestic hop at 100
percent domestic prices. Post is investigating this charge
further and will report more septel.


4. (U) Morales has used the May Day pulpit to make
nationalization announcements in three of his four years in
office. In addition to his announcement regarding AirBP, in
2008 Morales nationalized Italian-owned telecommunications
company Entel and three foreign-owned hydrocarbon companies
(reftel A, B). In 2007, while Morales did not formally
nationalize any companies, he did declare Bolivia's national
territory a "state mineral reserve" and awarded
administrative control of all mineral resources to Comibol,
the state-owned mining company (reftel C). In 2006, Morales
effectively nationalized the country's hydrocarbons
production by raising taxes to 82 percent in Bolivia's two
mega fields (run by Petrobras, Repsol, and Total) and
regaining state control of other capitalized companies
(reftel D).

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Morales Decrees More Workers Rights
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5. (U) After marching at the head of a workers' parade,
Morales announced a package of five reforms via supreme
decree. The five reforms are designed to achieve the
following: first, equalize contractors' rights and benefits
with permanent employees; second, ensure workers receive
uniforms and protective gear when appropriate; third, award
severance payments to workers serving longer than 90 days;
fourth, pay low-level government workers a one-time award of
1000 Bolivianos; and fifth, transfer one percent of many
workers' basic salaries to support their unions.


6. (U) While the first three decrees were met with mild
opposition by business leaders complaining it would lead to
job cuts, the latter two decrees generated more political
heat. The award of 1000 Bolivianos was widely panned by
opposition political leaders as nothing more than an attempt
to buy votes, given that it did not serve a wider social
purpose, such as other government programs (bonos),which
assist senior citizens, pregnant women, and poor youth.
Regarding the automatic donation to unions, Morales commented
this provision would help unions steer away from support by
NGOs and political parties. The opposition characterized
Morales' comments as pure politicking and another attempt to
garner votes for the MAS.

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Exeni Out, Ibarnegaray In
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7. (U) In what appeared to be a surprise announcement,
National Electoral Court (CNE) President Jose Luis Exeni sent
a note to President Morales April 30 advising him of his
intent to resign from the court immediately "strictly for
family reasons." The announcement was publicized May 1, and
Exeni reportedly went immediately to Tarija to be with a
dying aunt. Despite his statement and actions, Morales
implicitly criticized the decision, saying: "Guaranteeing
profound state transformations will always be difficult, and
there will always be people who stand for Bolivia, for
change, and for democracy, and others who aren't prepared to
assume responsibility." Autonomy Minister Carlos Romero
said, "I would not discard the idea that he was afraid of not
being able to complete his difficult tasks," including the
implementation of a new biometric electoral roll.


8. (U) Within hours of the public announcement of Exeni's
departure, Morales appointed Roxana Ibarnegaray, who served
on the court from 2000 to 2004 under the second Sanchez de
Lozada administration. Ibarnegaray was praised widely for
her professionalism and her capacity to ensure continued
progress toward a new biometric electoral roll before the
December 6 national elections. At the news conference
announcing her appointment, President Morales commented that
"he hoped he didn't make a mistake" in selecting her.
Opposition leaders took the opportunity to pan the selection
process itself, noting that Ibarnegaray's selection was
necessary just to maintain a quorum of three members out of
five total. They called for renewed efforts to fill out the
remaining two slots through a Congressional agreement.
Although Ibarnegaray replaces Exeni, she will not be CNE
president. The three members instead picked current member
Antonio Costa to be president in a private meeting late on
May 3.

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Comment
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9. (C) Prior to the May Day weekend, there was much
speculation (especially in Santa Cruz) that Morales would
announce a nationalization of Santa Cruz-based businesses,
arrests of political opposition members including Branko
Marinkovic, and/or establishment of significantly increased
troop presence in Santa Cruz's capital itself. The
relatively quiet weekend was welcome, but the government's
investigation into an alleged terrorist cell continues, and
government media is increasingly implying U.S. (and
potentially USG) involvement, including financing of the
terrorists and the Santa Cruz Civic Committee. With forty
percent of the country's armed forces in Santa Cruz state, we
are not ready to relax just yet. End comment.
URS