Bolivia's fragile government gained temporary breathing room in Sunday's referendum over the nation's natural gas and oil reserves, but the "yes" vote also strengthened the position of Evo Morales and his Movement Toward Socialism (MAS) which can revise the measure that will be sent to the legislature on August 7.

In the run-up to the July 18 vote, radical Indian and labor leaders threatened boycotts and the burning of ballot boxes against a referendum that left out the option of state nationalization. Nevertheless, the referendum also meant a continued rejection of the free-market policies championed by the former president, Gonzalo Sánchez de Lozada, the University of Chicago economist who was driven into exile last October after police killings of nearly one hundred Indians who protested his rule.

The referendum, the first in Bolivia's history, included five questions. Voters supported the repeal of the existing privatization law, the "recuperation" of "ownership of all hydrocarbons at the wellhead," refounding of Bolivia's state oil company to "take part in all stages of the hydrocarbon production chain," and exporting gas that promotes domestic industrialization, with fees and taxes up to 50 percent of the value of production, with revenues primarily going to education, healthcare, roads and jobs.

Progressive critics assert that some seventy existing contracts with multinational oil and gas companies remain intact, but these interests were not able to mount an effective campaign against the reforms that were being proposed. On the right, the sentiment of many in the Bolivian business class was reflected in an essay by an American Enterprise Institute pundit in the July 9 Wall Street Journal declaring that the referendum meant economic suicide. The AEI analysis correctly pointed out, however, that a "yes" vote would mean "that President Carlos Mesa will have bought himself enough legitimacy to remain in office until the end of his term in 2007," which most observers believe was the real purpose of the referendum, conceived as it was after mass rioting paralyzed the country last October.

Early returns indicated an 80 percent majority in favor of repealing the existing hydrocarbons law pushed in the 1990s by the hated Sánchez de Lozada (or "Goni"), whose political consultants were the star liberal Democratic pollster Stanley Greenberg and former presidential campaign manager James Carville. The Washington-based Greenberg firm represents British Petroleum, one of the multinationals with billions invested in Bolivia. BP supported the referendum, along with the International Monetary Fund (IMF) and the World Bank, as did US Embassy officials, because the possible alternative--an Indian-led revolution--was even worse.

In the weeks before the vote, the de facto liberation of numerous Indian communities on the Bolivian altiplano above La Paz struck terror in the country's elite. On the eve of the referendum, the Brussels-based International Crisis Group (ICG) warned of Bolivia's "most dangerous moment" in a report on the crisis titled "Too Deep To Heal?" The report advised a public relations offensive to demonstrate how natural gas "can jump-start economic development."

The referendum went relatively smoothly, however, apparently because of a popular consensus that radical change might be achieved with less loss of life through reforming the system. Evo Morales, who narrowly missed being elected president in 2002, campaigned for the referendum while indicating that he would seek a more progressive redistribution of gas and oil revenues in the Congressional debate ahead, along the lines of the US New Deal and earlier Latin American nationalizations.

Morales's support for the referendum, however, effectively marginalized more radical nationalists, whose ranks had already been in disarray. The MAS, which Morales heads, is expected to win numerous municipal seats in the December elections. His stance also may have been influenced by a US retreat, at least rhetorically, from its war to eradicate coca leaf. (Morales is the leader of the coca growers union, which has been opposing the eradication efforts.)

While authorship of Sunday's referendum was not clear, La Paz-based social-science researcher Tom Kruse reported that lobbyists for international hydrocarbon firms were consulted in the drafting. Reached in England, Greenberg said he knew of no current involvement by his firm in the referendum. He retains "a great deal of respect" for the exiled Goni, he added, and described his work for BP as "mainly environmental" and not connected with Bolivia.

The Greenberg firm, along with Carville, has done extensive polling of Latin American opinion and consulting for Eduardo Duhalde, whose popular support as Argentina's president fell to 8 percent after repression of antiglobalization protests in the 1990s, as well as Francisco Labatista, the candidate of Mexico's Institutional Revolutionary Party, which sent armed forces to quell the 1995 Zapatista uprising before being defeated at the polls.

It appears that the Greenberg-Carville axis attempted to export the Clinton Administration's free-trade policies to Latin America, with disastrous political results. Prompted by popular resistance from Mexico, Bolivia, Argentina, Ecuador and Brazil, however, the Clinton-era policies are being re-examined, from the New Deal tone of this week's Bolivian referendum to the language of Senator John Kerry's platform recommendation for "review" of trade policies.

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