Yesterday, all the talk on the streets was of "civil war" and "military coups". A miner died in protests outside Sucre. Protests on the streets were small but visibly angry. Reports came in that Santa Cruz was more or less occupied by the army. Graham and I decided to head back down to our friend's house in the south of La Paz, where people openly talked of evacuaton.

Today, the mood is noticeably happier and more relaxed out on the streets. Shops are open, transport is slowly returning to the streets, Graham and I can suddenly start to plan our trek (which we have been planning to do for the entire last week). People are saying the crisis is over.

It's bizarre. How can things change so much in less than 12 hours.

The reason for the rising tension yesterday was linked to the Congress needing to respond to President Mesa's resignation. They have taken an extraordinarily long time to respond, citing security issues, but leaving a huge political vacuum. Yesterday morning, it looked like Mesa would be replaced by the President of Congress, Vaca Diez.

Vaca Diez is a far more divisive figure than President Mesa, closely linked with President Goni who fled the country in 2003. He is highly unpopular with social movements. In La Paz, everyone was glued to their radios and television sets waiting for the announcement. Protestors in La Paz looked they were waiting to riot.  As demonstrations and tension mounted across the country, Vaca Diez eventually renounced his intention to stand, and Eduardo Rodríguez, head of the supreme court was voted in as the new President.

The new President will be responsible for calling elections within the next 3 months. The various leading social movements haven't formally announced an end to protests but at first sight, it has certainly reduced the high state of tension and negotiations may well lead to a temporary cessation of blockades and protests.

However the elections are only likely to be a temporary solution. The central demand for nationalisation has not been answered. Moreover the factors that have fuelled this crisis remain live: gross inequality and poverty, a political and economic system that fails the majority, a nation divided culturally and economically, international economic policies that force Bolivia into decisions that benefit multinational companies more than its own people.

A ceasefire may be temporarily won but the conflict is sure to continue.

Then suddenly a tickling in the nose turns acrid and the nose and eyes start running as the tear gas takes over. Crowds of people stand on roofs and walls watching expectantly.

On the next corner, a group of men occupy the crossroads burning a tyre and piling up bricks. A rainbow coloured flag is lit up by the Andean sun. They make way for a march that passes with a big banner announcing their presence as a campesino group from Potosi. They chant noisily.

Shopkeepers, with metal shutters down, look impassively or anxiously on. Every other person carries a radio, with only one item of news: the protests that have paralysed the country and the spluttering attempts of politicians to respond.

An air of tension and expectation rises up from the pavement.

We turn down another street, which only a week ago was full of shops enticing in streams of tourists with colourful textiles and indigenous designs. The street lies deserted. The whole city seems to be on the move by feet, but market stalls lie empty, bandaged up in cloth. Restaurants announce in blunt notices that they are closed due to difficulties in getting food.

But just a block away the Austrian bakery is open. People licking ice-creams wander idly past men sunning themselves on park benches as their shoes are polished by balaclavered street-boys. Streets are strangely devoid of traffic but further on in a prosperous part of town on lies a square full of cafes, people drinking cappucinos and chatting, their 4x4s gleaming in the sun.

Evening comes and all the streets seem strangely peaceful again, an almost festive atmosphere as people fill the traffic-free streets playing volleyball, flirting with friends, buying tickets for "Star Wars".

Perhaps it's just an illusion?? But then you hear overhear conversations. Talk of difficulties in getting gas as all petrol stations close. Anxious examinations of newspapers. Rumours flying - water has been cut off, a march is coming this way to loot, three more oil fields have been occupied, US is evacuating all its personnel, talk of the need to set up "self defense committees" to protect this neighbourhood from "the troubles up there." In the distance, another explosion booms.

An air of tension and expectation rises up from the chitter-chatter.

Television is not a respite. Every hour, there have been new announcements. La Paz and many other cities lie cut off as more than 100 blockades spring up around the country, fights have taken place in Santa Cruz between local residents and campesinos. Social movements are "radicalising their demands" as politicians fail to listen.  People are going without food as prices shoot up, and as gas disappears that is needed to cook it.

We are well into a third week of protests and the streets are amazingly still full of people marching. I wonder how they keep going, but every day they are still there. Campesinos from outlying parts of Bolivia, miners walking sombrely in their hard hats, teachers chanting noisely, students with Che Guevara flags, indigenous people from El Alto.

Small groups ratchet up the tension further as they attack police. Eight lorries from Oruro full of dynamite are stopped by police as several miners head to apparently try and take Parliament. The President goes on television saying that Bolivia is at the brink of a bloody civil war. Bolivia, largely ignored by international press, is suddenly headline news across the world.

An air of tension and expectation emanates from televisions and radios that transfix the nation.

Where on earth is Bolivia going to go? What are the expectations for a resolution from the conflict? It is impossible to know. Paceños (residents of La Paz) sound exhausted when asked about the troubles. Some are angry with the protests that have caused their businesses to suffer and have paralysed the city. But most put the blame mainly on the politicians.

The trouble is that the crisis needs a political solution, yet there is profound lack of trust in politicians. At times the crisis seems to have taken place in a complete vacuum of power. Announcements by the President or leading politicians sound hollow and had little impact on the unfolding crisis. Almost no politicians have addressed the central demands of protestors for nationalisation.

The almost irrelevance of national politicians seemed to be reflected when both the President's resignation and the announcement that Congress would meet away from La Paz seem to have no effect on the protests.

It is very hard to imagine what will happen next when fustrations with a political and economic system have reached such a critical point.

Perhaps they will burn out, as protestors and people in Bolivia at large get to an exhaustion point that must be near. Perhaps promise of elections and an assembly to design a new constitution will provide an avenue for people to redirect their political energies into pushing for politicians that will act more in the interests of the majority of Bolivians.

Perhaps Bolivia has reached a critical point in a history that will see a change of political forces: the rise to power of an excluded indigenous majority. Perhaps it will split the nation apart as people are forced to take sides in a struggle that will at times be contradictory and counter-productive. 

Whatever happens, Bolivia is going to need international solidarity if it is to forge a just and peaceful future.

Resources for daily updates:

Open Democracy
MABB
Barrio Flores

Some photos of the protests for nationalisation of gas in La Paz. Click on the photos to open up bigger versions within the online photo gallery.

Some of the press reaction to huge protests about the new gas law have suggested that Bolivians are crazy to take to the streets. Doesn't the new law promise added revenue from increased taxes and refound the State industry? What on earth would nationalisation achieve? Aren't these people just shouting slogans for no real reason?

However analysis by the research body, CEDLA, suggests that there are good reasons for protestors to challenge the new law because it contains serious flaws that affect Bolivia's long-term ability to maximise its natural resources to tackle profound levels of poverty.

Most of all, it fails to live up even to the ambiguous wording of the referendum on gas in 2004 in which people voted to recover ownership of gas resources and develop them to help industrialise the country. They argue that nationalisation is needed for Bolivia to develop its strategic resources.

According to a local chronicler, at a public meeting, one of the women said “If there are no men, then we must defend ourselves.” And they did, taking to one of the local hills with sticks, stones and a few small arms. Against a well-armed colonial army, the result was a horrendous bloodbath, but it became a crucial part of Bolivia´s patriotic history and now marks Mothers Day.

This week has seen indigenous women taking to the streets again with streets, bricks and small pieces of dynamite to face police with water cannons and tear gas. This time the rallying call for Independence has been focused on ending Bolivia`s exploitative relationship with private gas companies.

Thankfully, there has been no bloodbath, but it has been a tense week with demonstrations every day, the complete isolation of La Paz from the rest of Bolivia, blockades, and rumours of violent plots and military coups, and the resource-rich provinces of Santa Cruz and Tarija threatening to go it alone by unilaterally working towards autonomy.

Much of the opposition to the gas law has centred on La Paz, although on Wednesday this week thousands of people marched in Cochabamba. Last week, various organisations in El Alto (the adjoining city) blocked the whole city and thereby main access into La Paz, and then marched into La Paz to try and take Parliament. They were joined by miners (together with their dynamite), teachers and other social movements.

This week, a 200 kilometre-long march organised by the main opposition party joined protesting groups in La Paz. They continued to call for reforms to the law and a simple 50% royalties. However, their line is increasingly criticised by many other groups who are calling for outright nationalisation. The divisions amongst those against the law were openly on show in La Paz, even though the leaders of different factions agreed to continue working together in opposition to the new law.

Today, things were a bit calmer as the country marks Mothers Day and yesterday the public "Corpus Christi" holiday (even protestors need holidays, and Bolivia has a lot of holidays!) But leaders of those opposed to the new gas law have promised to up the pressure even more from Monday.

It is hard to guess what will happen next. It is difficult to imagine either the Government or Parliament agreeing to nationalisation, with the inevitable hostile response it would provoke from outside multinational companies, the international institutions and their backers including the UK as it would invariably mean that the State would have to confiscate private companies assets (as they could not afford to pay the required compensation)

It`s not easy to get a national picture of people`s views on both the protests and the new law. In Cochabamba, there seems to be widespread lack of enthusiasm for the new law and a mixture of support, opposition, and perhaps most of all weariness in response to unfolding protests in La Paz. But it all depends on who you talk to, and the largely middle class and urban group I am with here in Cochabamba are not very representative of the majority of Bolivia.

It is clear the protests have exposed a huge seam of anger amongst many indigenous groups (in particular Aymara people from the Altiplano) as well as many workers and campesinos against a gas law which is seen yet again to favour multinational companies above the interest of ordinary Bolivians.

Behind the call for "nationalisation" is a widespread belief that Bolivia needs to have proper control over its natural resources so it can strategically develop them for the long-term benefit of Bolivia. And the more that emerges on the new gas law, the more it becomes clear that it will return little control to the State. Multinational companies will continue to dominate both the use of and the prices of Bolivia`s gas and oil.

Earlier this week, I asked Vicenze, an Aymara woman from El Alto why her whole family was out on marches against the gas law when they had little chance of winning against both the State and the international community.

"For hundreds of years, we have seen our wealth being taken away, whilst we don`t have enough to eat," she said. "Even today, in El Alto, most people are struggling to get their daily bread, yet the international oil and gas companies extract our wealth to make huge profits for themselves. What can we do? The only thing we can do is take to the streets and say enough is enough. "

Hundreds of years on, women are still struggling for independence - not just for political sovereignty but economic sovereignty, for control over its resources. The road to Independence in a globalised economy is far from clear and like the women of Cochabamba in 1812, they face an equally daunting opposition. However many Bolivian women remain equally determined to resist even at times at great cost.

But there is certainly no sign of an end to the conflict. Two gas companies have already said they are looking into suing for breach of contract and all energy companies are saying that it will freeze or cut back on foreign investment.

Meanwhile the country has yet again become beseiged by bloqueos (road blocks), marches on La Paz and announcements of major strikes by groups who are calling the new law an act of treachery.

Now that the law has been signed, however, divisions are emerging amongst the opposition between those who are calling for full nationalisation, the resignation of President Mesa and the closure of Parliament and those in the main opposition party (MAS) who are calling for amendments to the current law including a simple 50% tax on all oil and gas companies.

In the next few days, I will try and do a fuller analysis of the current law and some of the alternative proposals. Whatever happens, Bolivia is going to need international solidarity in the coming months given the threats made by key international players before the law was passed including:

• The gas companies who are threatening international legal action for "breach of contract"
• The US, EU and international donors who threatened to cut back aid
• The IMF that may make debt relief conditional on a law approved by the gas companies

Tension continues to mount here in Bolivia as a bomb went off yesterday outside the offices of Brazilian petrol company, Petrobras in Santa Cruz. The bombing comes a few days before planned demonstrations, and after the government cancelled its planned national meeting aiming to reach a consensus on the gas issue, when most involved parties refused to attend.

A hitherto unknown group, calling itself the Patriotic Front warned of further attacks if Bolivia's gas reserves are not returned to State control. Barrio Flores on his blog documents some of the theories and background on the bombings. Democracy Center makes an impassioned plea for International Institutions like the IMF "to back off" in order to allow Bolivia to resolve the gas issue without further bloodshed.

Thankfully Bolivia is not about to go to war, but there is a foreboding sense that a serious conflict is approaching.

At my language institute where I am studying, teachers are stocking up on extra food at supermarkets, rumours abound of attacks on Parliament and government buildings, people are bringing forward travel plans to race across the country before it's too late.

There is a feeling perhaps reminiscent to the phony war that existed in the UK in the first months after war was announced.

The reason? The country-wide debate on gas which finally has reached a critical point after months of debate, demonstrations and road blocks.

On Friday, the Congress passed a law on gas/oil which has been condemned by energy companies as "confiscatory" and as an "act of treachery" by opposition parties and various social movements.

It was left to the President to decide whether to promote a law (which he has previously criticised saying it will end foreign investment), or choose to veto or make amendments to it earning the wrath of nearly all the parties in Congress. In the words of most commentators, he was caught "between a sword and a wall."

Most of my friends predicted he would say nothing because after 10 days the law would automatically pass and the wrath from both sides would then fall on Congress and not on the President.

For five days, President Mesa said nothing. To ratchet up the tension further, the Civic Committee in the Eastern province of Santa Cruz announced that it would go ahead with their own referendum for autonomy if the Congress failed to organise an official referendum.

Autonomy is related to the gas issue, as the two regions keen to have autonomy are the same regions with the largest gas reserves. Autonomy is seen by many as another tactic for depriving the State of control of its natural resources.

Then suddenly last night, it was announced that the President would make an address to the nation. I don't ever remember seeing an address to the nation, so tuned in with interest to see what President Mesa had to say. Would he agree to promote the law? Would he veto it? Would he agree to the demands of Santa Cruz? Would he threaten to resign for perhaps the fourth time in a month?

Of course, like all good politicians, he avoided all the options by calling instead for a national meeting of all parties to come to a consensus to prevent the "disintegration of our country."

But the tactic seemed to backfire. Evo Morales, leader of the opposition party MAS, stated that they wouldn't attend because various social movements had not been invited. Announcements of marches and demonstrations have been publicised for Monday.

We are back in a situation where the Government and opposition are on the verge of a major fight that will have serious consequences for the country. Meanwhile the multinational companies and Western Governments who pull the strings in this tragic play will face little pressure and remain largely out of the international spotlight.

Excuse the slightly dodgy graphic, but this illustrates the carve-up of Bolivia's annual gas revenues which totalled on average $992 million per year  between 1998 and 2004.* As the energy companies control the supply chain from production to distribution, and have been known to sell gas/oil without paying any taxes, the real picture is probably much worse.

If you ran a cake-shop, where someone you hired was taking 58% of your income as straight profit leaving you with 18% (as well as occasionally putting his hand in the till from time to time), you would probably be quite pissed off. I think you would be seen as very gracious if you agreed to keep the employee on as long as the profits were split 50/50.

The demand for 50% royalties is what the main opposition party, MAS, has been arguing for. Many social movements are arguing for full nationalisation of Bolivia's oil and gas reserves. But the energy companies are fighting tooth and nail to prevent any fall in profits from extracting gas and oil from one of the poorest countries in Latin America.

Two of those companies are British Gas and British Petroleum. They are putting a lot of pressure on the Government to revise a new "hydrocarbons" law in their favour. The law is likely to be passed in the next few weeks, so if you haven't already written already, please write to British Gas today!

*Information provided thanks to Alvaro Rodriguez of CEDLA. I hope to put together a graphic related specifically to BP and British Gas later this week, but it is unlikely to differ much from the general picture.

The Congress-backed law is a half-way house between the popular demand expressed by many social movements for state control and 50% royalties and the law presented by the Government which made very modest changes to the current situation which hugely benefits the oil/gas companies.

However, the Congress law with its call for an increase in revenues for the State and increased State control over Bolivia's natural resources is too much for even the wealthy multinational energy companies. A body representing all the oil companies made over 30 objections to the new law. Not surprisingly, given the sheer amount of pressure on the Government to review the law, the companies' objections have mirrored those made a few days ago by the Government to the Congress law.

The pressure on Senate to revise the law is huge, although some politicians have spoken out against the companies' objections saying that the Senate must stand firm in the interests of the Bolivian people. Whether they can hold out against the opposition of both the companies and the international donor community remains to be seen.

If you haven't sent a letter to British Gas or the British Government, please do. The law will be discussed and revised over the next few weeks, so the oil companies need to hear that there is international support for a just deal for the Bolivian people.

More evidence if you needed it, that governments such as ours act more in the interests of multinational companies, than in support of the lofty objectives of tackling poverty found in reports by the Department for International Development or USAID.

If you have time, please write a letter to British Gas ( Box.info@bg-group.com) and/or the US or British or other European governments expressing your concern. I enclose a copy of my letter to British Gas. There is also good analysis on Democracy Center's website:

Frank Chapman, Chief Executive
BG Group plc, Thames Valley Park,
Reading, Berkshire, RG6 1PT, United Kingdom

Dear Sir,

I am writing as a British Citizen and as someone who is living in Bolivia to ask you to clarify your position on the hydrocarbons law which has been passed by Congress.

Every day in the city of Cochabamba, I walk past many families sleeping in the streets who reach out desperately to me as I pass begging for a few coins in order to have some money to eat.

There is no reason why people should be begging. Bolivia is a country rich in resources, but over many centuries too much of its wealth has been extracted for the benefit of those who are already too rich.

As you know, the Bolivian Congress has just passed a hydrocarbons law, which is more modest than the popular demand for 50% royalties, but which could nonetheless ensure more of Bolivia’s resources are used for the benefit of the Bolivian people – particularly the six out of ten people live on less than $2 per day.

I was therefore very concerned to read a report in the Cochabamba daily Opinion on 17 March in which the Minister of Energy, Guillermo Torres said that his ministry had received several letters from oil/gas companies including British Gas. The letters had expressed concern with the democratically-passed `hydrocarbons´ law and had indicated that Bolivia could face an international tribunal for breach of contracts.

I would be grateful if you could confirm whether this is true. I understand from statistics quoted in Bolivian congress that between 1997-2004, international energy companies exported 2.14 billion dollars in capital out of the country leaving only 307 million dollars for the State. Do you believe this is a fair distribution of Bolivia’s natural resources? 

If it is not your position to oppose the wishes of the Bolivian people, I would be grateful if you could let me know when you will make public your support for the new hydrocarbons law –or even better the popular demand for 50% royalties. At the moment, the Bolivian government is arguing against the law by saying that international energy companies are against it. Your public support for the bill could ensure it is passed. 

I see from your annual report that British Gas’ profit increased by 22% to £1522 million in 2004. Giving your support for this new law could ensure that you are not seen to be profiting from poverty and help you live up to your commitment to “behave in a socially responsible manner.”

I look forward to hearing from you.

Yours sincerely,

Nick Buxton

The Minister of Energy, Guillermo Torres, was reported in the Cochabamba daily Opinion as saying that his ministry had received several letters from oil/gas companies expressing their concern with the new `hydrocarbons´ law. Torres said it was likely that Bolivia would face an international tribunal for breach of contracts which could have devastating consequences for Bolivia.

Torres specifically cited British Gas, the fourth largest multinational energy company in Bolivia: "The companies have sent us letters, for example I received two letters from British Gas."

This pressure has been received despite the Congress rejecting the opposition´s demand for a simple 50% royalty on all gas producation. The Congress is supposed to have passed a law which imposed a mixture of royalties and taxes that came midway between the government´s proposal and that of the opposition.

I have yet to see a proper analysis of the new hydrocarbons law, but some of the papers today are saying that the law is very similar in effect to the demand for 50% royalties.

Torres has said the law will be a "disaster" for Bolivia. The opposition party, MAS is arguing that the contracts signed by the previous President Sanchez de Lozada were completely illegitimate as they were not subject to public scrutiny.

If this legal action goes ahead, or even if it is just a threat to prevent a just law, Bolivia needs international solidarity. As British citizens we must speak out to say that the gas reserves belong to Bolivia, and the social needs here depend on the country gaining maximum benefits from its resources. We can not let British Gas threaten Bolivia´s future.

More to follow....

Last night, the Congress of deputies passed a 'hydrocarbons' law imposing 18% royalties on multinational energy companies and a 32% tax. It is slightly different to the government proposal, but doesn't match the main opposition party's (MAS) demand for 50% royalties.

There is lots of evidence that taxes as opposed to royalties (the difference between the two I think being at what point they are applied) are often evaded and rarely paid in full. So it is surprising that the leaders of the bloqueos have agreed to lift the blockades saying that they would await the decision of the Senate which can revise the law.