Sunday, January 20, 2008

Money Matters May Jeopardize National Unity

LA PAZ (digitalwarriormedia) This past week the Bolivian government announced that it still intends to cut regional revenues by 30 percent in order to fund an elderly pension program, despite the ongoing negotiations between the central government in La Paz and the nine regional governors.

The announcement, made on Thursday, came as a surprise to the governors who held a second marathon meeting with President Morales at the beginning of last week.

On Tuesday, departmental governors failed to sign a national unity agreement at the conclusion of the meeting, but the spirit of political cooperation was still alive.

The two sides agreed to form a commission to find a solution to the issues of regional autonomy statutes and the distribution of funds from Bolivia’s oil and gas exports, but the "grand national accord" presented by Morales was rejected as the four governors from Santa Cruz, Beni, Pando and Tarija preferred to take a “wait and see” approach.

Despite lacking a formal unity pact, the meeting was a major step forward, as agreement was made to remove the capital issue from the deliberations. Lobbyists for Sucre's capital were refused entrance to the meeting by President Morales and eight state governors.

After the violence in Sucre that left 3 dead, hundreds wounded and halted the work of the Constituent Assembly, this gesture was a huge accomplishment for the central government and an indication that demands from the opposition to move the capital from La Paz to Sucre was no more than political posturing aimed at derailing the progress of rewriting Bolivia’s constitution.

But the mutual good feelings subsided after Thursday's announcement that the Dignity Pension will begin February 1, with the current funding structure in place. The opposition immediately accused Morales of double talk and breaking his previous promise to negotiate.

According to the government, payment of the Dignity Pension from the Direct Hydrocarbon Tax (IDH) revenues is just a matter of complying with a Bolivian law passed by Congress in November 2007.

“We must ensure payment of income in accordance of the law," said Finance Minister Luis Alberto Arce.

Minister Arce indicated that during the first round of negotiations held last week, the nine prefects,"all stated that they are in favor of the Dignity income."

The social program will benefit more than 676,000 elderly Bolivians and lift many out of poverty with an annual income of 2400 Bolivianos, or about $26 per month.

The cut of the oil revenues from the regions to fund aid for the elderly is one of the main obstacles in the dialogue initiated on January 7 between President Morales and the nine governors as they attempt to reach a national accord.

The prefects have offered a proposal in which the departments will provide $30.8 million of the $201 million needed to fund the program and the remainder would be administered from central government sources.

Regional representatives contend that a reduction in their budgets will be detrimental to regional development as funds are already designated for planned projects. Meanwhile the central government says payment of the Dignity Pension is unsustainable without the expected revenues from the HDI.

Any funding agreement reached with the prefects will require Congress to make changes to the current law. In the absence of such an agreement, the government will comply with the law and move forward with funding the program, said the finance minister.

Another negotiation meeting that was set for Friday has been postponed until January 23, at which time the government will submit a counterproposal to the prefects.

The regional departments of Beni, Pando, Santa Cruz and Tarija, which maintain some of the strongest opposition to the Morales administration, indicated that there was no need to continue negotiating over autonomy if the central government insisted upon cutting their oil and gas revenues.

"If we take away resources, why are we going to continue to talk about autonomy?" asked Carlos Dabdoub, Director of the Autonomous Prefecture of Santa Cruz.

Representatives from Tarija and Pando have indicated that they will wait until receiving the government’s counterproposal before continuing the dialogue.

"We are looking at alternatives and we are optimistic we will reach an agreement," stated Minister Arce.

The “wait and see” approach to Bolivian politics continues.


Photos: ABI and AFP

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