MercoPress. South Atlantic News Agency

Bolivia's president hanging from a cliff

A new massive wave of protests demanding the nationalization of Bolivia's oil and gas industry was launched Monday. Police had to use tear gas and water-cannons to prevent one group of militants from storming Congress in the capital La Paz.

Miners blocked several key highways but the most aggressive protests occurred when thousands marched to the capital from the neighbouring city of El Alto, which was the epicentre of the civil unrest that forced the ousting of former elected president Gonzalo Sanchez de Lozada in October 2003.

The original demand by main opposition leader Evo Morales pressing for the promulgation of a bill virtually doubling oil and gas taxes and royalties, which President Carlos Mesa refuses to support, was soon overtaken by a clamour for the nationalization of Bolivia's hydrocarbons sources and oil industry.

Police evacuated congressional offices fearing protesters would force their way into Murillo Square, seat of Congress and the presidential palace.

President Mesa has until today Tuesday to formally veto or sign a new law overhauling the hydrocarbons industry which foreign oil and gas companies have described as confiscatory.

Last week President Mesa in a national address expressed his "conceptual" rejection of the bill lawmakers passed May 5 arguing it would deprive the impoverished Andean nation of badly needed foreign investment. Even so, he is obliged to submit specific objections in writing to prevent the bill becoming automatically enacted.

The Bolivian president believes the bill goes too far and the energy companies warned they will challenge it in international arbitration courts if contracts are not respected. But several leftist, Indian and union groups say the bill does not go far enough and are now demanding outright nationalization.

The scale of Monday's protests surprised even Mr. Morales and members of the coca-growers union he heads, recurrent instigators of protests who were unable to control miners' blockading vital highways such as the one connecting La Paz to the Chilean border and crossing the cities of Cochabamba and Oruro. Police confirmed that militant miners also shut down roads linking Potosi to Oruro and Sucre.

Mr. Morales, a hard left Indian leader who narrowly lost the 2002 presidential contest to Mr. Sanchez de Lozada urged President Mesa to confirm the nationalizing of natural-gas and oil fields with the government owned oil company, YPFB, taking over assets.

"The president should align himself with the platform of the people and not continue to defend multinationals", blasted Mr. Morales.

Edgar Patana the leader of the main El Alto labour union warned that his organization so far has "battled silently" for nationalization of oil and gas but "the time has come to take them back through pressure".

Multinationals were attracted to Bolivia following the privatization of the energy industry in the nineties, among which Spain's Repsol-YPF, British Petroleum, British Gas, Brazil's state-owned Petrobras and French giant Total.

Between 1996 and 2002 foreign energy corporations invested over 3,7 billion US dollars in exploration in Bolivia, bringing the country's proven natural gas reserves to over 52 trillion cubic feet, second only to Venezuela in Latin America.