Mesa Offers to Resign as Protesters Form Blockades

Bolivia's President Carlos Mesa submitted his letter of resignation to congress Monday due to protests and blockades by leftist opposition groups that have virtually brought the entire country to a standstill, government news service ABI reported.

The MAS socialist movement, led by the head of the coca growers Evo Morales, began blocking roads Sunday night in response to a decision by the country's lower house to fix royalty payments for oil and gas production by foreign companies at 18% and charge a tax of 32%.

The blockades are affecting fuel and food distribution throughout the country, Mesa said in his letter of resignation. "It is predictable that in 3-4 days, by Wednesday or Thursday, the main cities, particularly [capital city] La Paz, will not have fuel and will begin to have food shortages," Mesa said.

MAS wants all foreign companies to pay a 50% royalty on oil and gas production but, on Friday, the lower house passed the 18:32 combination, a ministry spokesperson told BNamericas, confirming press reports.

The vote was split 58 to 58 until Norah Soruco, the acting president of the lower house, broke the tie, Reuters reported. MAS says the 18:32 split favors private companies, but Mesa insists the proposal guarantees the state will receive 50% of oil revenues to spend on things like health and education, without scaring away private investors.

"The oil companies are absolutely clear in the idea that the era of having all the advantages and almost no disadvantage is over, the companies know that the our government's hydrocarbons bill is a bill that asks them to pay Bolivia with justice and quality," Mesa said. On the other hand, "the hydrocarbon law that the honorable Evo Morales, MAS leader, is proposing is not viable and is impossible," Mesa said. "It is a law that the international community will not accept and that oil companies will take to arbitration."

The lower house is set to vote again March 8 on the royalty-tax issue because MAS claims that there were some "irregularities" in Friday's voting process, the source said. The lower house has so far approved about half of the 142 articles in the hydrocarbons bill, but it is too early to tell if the bill will be further delayed by Mesa's offer to resign, the source added.

Foreign companies have cancelled or delayed investment plans in Bolivia's hydrocarbons sector pending approval of the new law.

Bolivia's congress president, Hormando Vaca Díez, was due to meet with parliament to discuss Mesa's resignation Monday afternoon, the source said. If lawmakers accept Mesa's resignation, Vaca Díez is next in line for the job, because the post of vice president is vacant.

Mesa came to power in October 2003, after president Gonzalo Sánchez de Lozada resigned following street demonstrations against gas exports, which killed dozens. Mesa, an intellectual and historian, was vice president at the time.

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