How New Labour sell-outs Helped Evo Morales win in Bolivia.

With Evo Morales set to win a third term as Bolivian president, I am republishing this 2006 article based on FOIA papers that shows how New Labour sell-outs - in the shape of Brian Wilson - helped Morales win by betraying their own principles. New Labour loved BP and British Gas too much to see why Morales was popular.

Helping hand :Solomon Hughes exposes the bullying British tactics in Bolivia that backfired on Foreign Office officials

Solomon Hughes, Morning Star, April 21 2006.

When Bolivians elected their radical new president Evo Morales last year, the Foreign Office congratulated him on his "decisive victory."

The British government deserves some of the congratulations as well - it helped Morales move from his rented single room into the presidential palace. But it did not mean to do it.

Britain helped Morales's Movement for Socialism get elected by pressuring his predecessors to stick with the unpopular privatisation of the country's oil and gas. Morales's opposition to these British-backed policies swept him into power.

Documents released to me under the Freedom of Information Act show that Labour ministers threatened Bolivian MPs with legal action and investment strikes if they stopped favourable treatment of British multinationals.

As Morales won his votes by opposing these policies, the Foreign Office congratulations must have been delivered through tightly, if elegantly, gritted teeth.

Most British newspaper stories about Morales focus on his attitude to cocaine - presumably, because journalists like to stick with an issue which they know a lot about rather than trying to figure out how Bolivia works.

Morales came to politics as a representative of the cocaleros, farmers growing the coca leaf, and he still wants to let Bolivians grow the plant for traditional remedies, in opposition to the US "war on drugs."

However, letters from the British embassy in Bolivia show that, as Morales came closer and closer to power, diplomats focused on his attitude to less glamorous products, specifically oil and gas.

Since the mid-1990s Bolivia followed a World Bank-backed privatisation programme, including handing hydrocarbons - oil and gas - to foreign firms.

Large hydrocarbon resources were discovered after privatisation and these pools of oil and gas could fund major social reforms, but they are in private hands - a point that finally made Morales president. However, Labour ministers were putting all their efforts in the opposite direction.

In 2002, Morales was narrowly beaten in an election by President Lozada, a man commonly called "the Gringo" because he was raised in the US and speaks Spanish with a US accent.

Lozada backed Bolivian hydrocarbon privatisation.

He particularly supported a plan from businessmen in what is called the Pacific LNG consortium. Two UK firms, British Gas  and British Petroleum lead this consortium and wanted to pump Bolivian gas via Chile to the United States. Britain made sure that the Gringo kept to this gas plan.

In 2002, Energy Minister Brian Wilson visited Bolivia. At the time, I asked both the Foreign Office and Wilson if they were going to Bolivia to boost the Pacific LNG scheme. They both said that they were not. They claimed that the visit was to "offer any help with a new regulatory framework for gas" rather than boost British businesses' grip on Bolivian resources.

However, papers released under the Freedom of Information Act tell a different story. Wilson wrote to Bolivia's industry minister saying: "Thank you for your letter ... inviting me to visit you in Bolivia to discuss hydrocarbons. The Bolivian hydrocarbons industry is very important to British gas companies and I am keen to support British investments in your country.

"I am considering a visit to Bolivia later this year with the purpose of helping British companies secure more business in this important market."

A note from his officials says: "A visit needs to have the involvement and support of key British gas companies."

Wilson visited Bolivia with a host of British businessmen, including local British Gas boss Rick Waddell, an ex-US army major who used to work for Enron.

Briefings for that visit from the Department of Trade and Industry say that the minister must emphasise that British Gas “is very keen to develop as quickly as possible" the scheme.

The briefings show that Britain was aware that a Bolivian announcement in favour of the Pacific LNG scheme could be unpopular and that "the packaging of the decision will need careful management to avoid a public outcry," especially the plan for foreign firms to send Bolivian gas to the US via their national rival, Chile.

The papers note that "a fierce campaign against the Chilean route has been organised by indigenous groups and trade unions."

After Wilson's visit, this "fierce campaign" organised mass demonstrations in Bolivia's capital, La Paz. However, President Lozada's forces were fiercer - they shot dead 60 protesters before "the Gringo" fled to Miami in disgrace.

After Lozada's fall, the British kept pressing Bolivia on oil and gas. Lozada's partner Carlos Mesa became president. He tried to contain popular anger over Bolivia's natural resources by imposing a new tax on energy firms.

However, a 2004 DTI briefing for Foreign Office Minister Mike O'Brien to help him greet a delegation of Bolivian MPs recommended that he threaten them with a lawsuit and investment strike over these taxes.

The briefing says that the taxes represent a "wholly new philosophy of increasing state control over the whole oil and gas chain," suggesting that this is a bad thing. The papers suggest warning the Bolivians that "BG/BP suggest that key investors consider the draft legislation in its current form would breach existing contractual rights, disrupt further development of Bolivian reserves and may lead to legal action by them."

The ministers' briefing also says that the new laws would cause "a freeze by them on current and future investment." In the end, Mesa's failure to press down on foreign oil and gas firms was one of the main reasons for Morales's decisive election victory last year.

Morales becoming president is an event that would have excited many Labour ministers when they were young - he is the first Bolivian Indian to win the top job. He campaigned under a socialist banner, promised to undo World Bank-inspired privatisations and to halve his own presidential salary while taxing the rich.

Ironically, Britain's Labour ministers helped Morales win by standing against the ideas that they have abandoned but he still holds.