Bolivians decide fate of gas reserves in referendum

LA PAZ, Bolivia -- The fate of Bolivia's immense natural gas reserves were at stake Sunday as voters decided whether to allow exports and increase government participation in a referendum aimed at healing social unrest threatening to fracture South America's poorest country.

Exit polls by television stations Unitel and ATB reported that between 56 to 63 percent of voters said gas should be exported. The issue is a sensitive one in Bolivia. Nine months ago, then-President Gonzalo Sanchez de Lozada was ousted for planning to export liquefied natural gas to Mexico and California. Clashes be-tween highland Indians and security forces in and around La Paz left nearly 60 dead.

Although Indian leaders had threatened to burn down polling stations Sunday, there were only minor incidents of violence.

Police were investigating a dynamite explosion in the otherwise calm town of Achacachi, 40 miles northwest of La Paz.

Dozens of townspeople, including Indian women in felt bowler hats, sweaters and layered skirts, also threw rocks at a team of election observers from the Organization of American States. The team, part of 22 OAS observers sent to Bolivia, was trying to visit a polling station in the city of El Alto, a flash point of unrest in October.

President Carlos Mesa, formerly the vice president, offered to hold the referendum immediately after taking over to finish Sanchez de Lozada's term, scheduled to end in 2007.

"Whether people vote yes or no, this vote will win," he said. "We are creating peace today."

Valued at more than $70 billion, the gas fields in this landlocked country are the second largest on the continent, behind those in Venezuela.

Lured by privatization of the industry, some 20 foreign companies have invested $3.5 billion in exploration, discovering 55 trillion cubic feet of gas.

But some Bolivians remained wary of the vote and pledges that the exploitation of natural gas will raise incomes in a nation where two-thirds of the population live in poverty.

"I don't think this is going to improve the situation," said Patricia Mamani, a 28-year-old street vendor in the capital. "There have been so many promises, and the government always does what it wants."

The gas reserves have split the nation, with Indians in the western Andean plains pitted against the business elite in the eastern and southern lowlands, where the gas reserves are located.

The business leaders are set on exportation and have threatened to break away from the republic.

Indian leaders in the west want the entire gas industry nationalized to ensure profits stay in the country, an option Mesa left off the ballot.

"It's a trick," Indian leader Roberto de la Cruz said at a polling station in El Alto before voiding his ballot.

Despite opposition, Mesa has so far managed to hold the nation together as a straight-talking political outsider. But some fear Sunday's results could pull down the former television journalist's 70 percent approval ratings.

The ballot asked Bolivians if gas should be exported, if the government should recover ownership of all hydrocarbon reserves and re-establish the state-run oil company to work with multinational petroleum companies, and if Bolivia should use the gas to negotiate access to the pacific coast lost during Bolivia's 1879-84 war with Chile.

It also asked if a hydrocarbons law signed by Sanchez de Lozada that promoted the privatization and exploitation of Bolivia's gas and attracted foreign investment, should be repealed.