Bolivia deals

Evo Morales finally has some good news, as he is making deals with both Brazil and Chile. After the 2006 nationalization dispute relations with Brazil had cooled, but now Petrobras is once again going to invest in natural gas. Meanwhile, all three governments are going to build a highway from the Atlantic to Pacific Oceans.

Citing Brazilian diplomats, the Reuters article frames the Brazilian move as a way to re-establish Brazil’s position of leadership from Venezuela. This seems plausible, as Brazil wants to be the regional leader and historically has had closer ties to Bolivia than Venezuela had. But there is also the simple bottom line—there is money to be made. As for Chile, Bachelet has been working hard to improve relations with Bolivia. The relationship is still prickly, but improved.

As I read the story, I wondered whether it would have any impact on the current political crisis. It could serve to enhance Morales’ stature, as he demonstrates that a) he can act as a statesman; and b) that nationalization did not mean an end to foreign investment. On the other hand, it has no impact on his overall effort to centralize power and the resistance to it.

UPDATE: Thanks to my student Chris for pointing out that Bolivia is also negotiating a $2 billion gas exploration deal with Russia's Gazprom.