Bolivia-Chile relations
Encyclopedia
Bolivia–Chile relations refers to interstate relations between the Republic of Chile
and the Bolivian Republic
. Bolivia and Chile have had strained relations ever since independence in the early 19th century because of the Atacama border dispute
. Relations soured even more after Bolivia lost its coast to Chile during the War of the Pacific
and became a landlocked country (Bolivia still claims a corridor to the Pacific Ocean.) Chile and Bolivia have maintained only consular relations since 1978 when territorial negotiations failed. Recently with the rise of Evo Morales
in Bolivia and Michelle Bachelet
in Chile relations have improved, although the border dispute is still pending.
and Bolivia
gained independence from Spain in 1818 and 1825 respectively both countries established their borders using the uti possidetis
principle. The origins of the dispute came from the borders established in the Spanish empire
that just defined the Atacama desert as the northern border of the Kingdom of Chile
. Bolivian and Chilean historians disagree on whether the territory of Charcas
, originally part of the Viceroyalty of Peru
, later of the Viceroyalty of the Río de la Plata
and ultimately of Bolivia, included access to the sea. Supporting their claims with different documents, Bolivians claim that it did while Chileans disagree. When Simón Bolívar
established Bolivia as a nation in 1825, he claimed access to the sea at the port of Cobija
disregarding overlapping claims by Chile, that claimed it had a limit with Peru that ran through Loa River
and that Bolivia was therefore landlocked
.
became president of Bolivia in 1829 and made a military intervention in Peru
that lead to the creation of the Peru-Bolivian Confederation
in 1836. Chilean minister Diego Portales
perceived the confederation as a threat to Chilean interest and the balance of power in the region. Chile declared war in 1836 followed by Argentina
in 1837, both countries were supported by Peruvian dissidents. The war begun with Confederation victories against its enemies. A turning point took place on the fields of Paucarpata where the Peru-Bolivian Confederation led by Santa Cruz forced the Chilean and Peruvian rebel armies to sign the peace treaty known as the Paucarpata Treaty, which included their unconditional surrender; later this treaty was discarded by the Chilean parliament. The Peruvian rebels and the Chilean army set off to a new campaign against Santa Cruz, defeating the Confederation on the fields of Yungay
. The confederation was dissolved in 1839. This was the turning point on Bolivian history after this moment for nearly 60 years, coups and short-lived constitutions dominated Bolivian politics.
as their boundary. In Chile the territories recognised as Bolivian in the Pacific coast were seen as ceded, while in Bolivia they were seen as finally recognised by Chile as Bolivian. This treaty also entitled Bolivia and Chile to share in tax revenue on mineral exports out of the territory between the 23rd
and 25th parallels
. The area between the 25th and 23rd parallel would also remain demilitarized. A second treaty in 1874 superseded this, entitling Bolivia to collect full tax revenue between the 23rd and 24th parallels, but fixed tax rates on Chilean companies for 25 years. At the time most economic exploitation of the coastal region was being conducted by Chilean companies and British interests, under the aegis of Chile's more robust economy and more stable institutions. Bolivia subsequently became dissatisfied at the arrangement due to the negative financial status of the national budget, especially after the earthquakes that struck Cobija
in 1868
and 1877
, the only small coastal town originally founded by Bolivians.
In 1879, Bolivian dictator General Hilarión Daza
increased the taxes on the exportation of saltpeter, violating the 1866 treaty. When Chilean-owned saltpeter companies refused to pay, Daza expropriated their companies and sold them in a public auction. Daza then put an end to all commerce with Chile and exiled all Chilean residents in Bolivia (the Bolivian port of Antofagasta
had more Chileans than Bolivians). In response, Chile declared the border treaties null and reactivated its old claim that Chile had inherited a land border with Peru using the uti possidetis
principle. Chile disembarked troops at Antofogasta the day of the auction. Later Chile declared war on Bolivia and occupied Bolivia's coast. Peru had, in 1873, signed a secret pact with Bolivia in which the two countries agreed to fight together against any nation that threatened either of them. When Peru refused to be neutral in the conflict between Chile and Bolivia, Chile declared war on Peru. Chile defeated both countries and annexed the coast claimed by Bolivia. This was ratified by Peru in the Treaty of Ancón
(1883) and by Bolivia treaty in a Peace and Friendship treaty signed in 1904.
severed diplomatic relations with Chile. Generals Augusto Pinochet
and Hugo Banzer
resumed diplomatic relations and attempted to settle territorial disputes. The secret negotiations started in 1973 and in 1975 diplomatic relations between Chile and Bolivia were established. That year, Pinochet and Banzer met in the Bolivian border town of Chañara. Pinochet agreed to give Bolivia a small strip of land running between the Chilean city of Arica
and the Peru
vian border. However the Treaty of Lima between Peru and Chile specified that Chile must consult Peru before granting any land to a third party in the area of Tarapacá
. Peruvian President General Francisco Morales Bermúdez
did not agree with the Chañara proposal and instead drafted his own proposal, in which the three nations would share administration of the port of Arica and the sea immediately in front of it. Pinochet refused this agreement, and Banzer broke ties with Chile again in 1978. The failure of the Chañara accords was one of the reasons of Banzer's downfall that very year.
proposed building the pipeline through neighboring Chile
to the port of Mejillones
, the most direct route to the Pacific ocean
to export the newly discovered gas reserves in Bolivia. However, antagonism towards Chile runs deep in Bolivia because of the loss of Bolivia's Pacific coastline to Chile in the War of the Pacific
(1879–1884).
Bolivians began campaigning against the Chilean option, arguing instead that the pipeline should be routed north through the Peru
vian port of Ilo
, 260 km further from the gas fields than Mejillones, or, better yet, first industrialised in Bolivia. According to Chilean estimates, the Mejillones option would be $600 million cheaper.
Peru, however, claimed the difference in cost would be no more than $300 million. Bolivian proponents of the Peruvian option say it would also benefit the economy of the northern region of Bolivia through which the pipeline would pass.
Supporters of the Chile pipeline argued that US financiers would be unlikely to develop processing facilities within Bolivia. Meanwhile, the Peruvian government, eager to promote territorial and economic integration, offered Bolivia a special economic zone for 99 years for exporting the gas at Ilo, the right of free passage, and the concession of a 10 km² area, including a port, that would be exclusively under Bolivian administration. President Jorge Quiroga postponed the decision shortly before leaving office in July 2002 and left this highly contentious issue to his successor. It was thought Quiroga did not want to jeopardize his chances of re-election as president in the 2007 elections.
After winning the 2002 presidential election Gonzalo Sánchez de Lozada
expressed his preference for the Mejillones
option but made no "official" decision. Despite this, a consortium
called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the British companies BG Group
and BP
, and Spain's Repsol YPF
. Repsol is one of three companies that dominate the gas sector in Bolivia. The other two are Petrobras
and Total
A plan costing US$6 billion was drawn up to build a pipeline to the Pacific coast, where the gas would be processed and liquefied
before being shipped to Mexico and the United States (Baja California
and California
), through a Chilean port, for example Tocopilla
. The 2003 Lozada deal was heavily opposed by Bolivian society, in part because of nationalistic resentment against Chile. However, the Gas War led to his resignation in October 2003.
Lozada's successor, Carlos Mesa
, made a referendum about the gas
into which the question Do you agree with President Carlos Mesa's policy of using gas as a strategic recourse to achieve a sovereign and viable route of access to the Pacific Ocean? was added. 54.79% of the votes said "yes" to this question. Mesa even took the question about a sea access to the OAS
where he had a verbal intercourse with Chilean president Ricardo Lagos
who said that is was a bilateral topic. Mesa resigned following the 2005 Hydrocarbons Law.
Evo Morales
was elected president in 2005 and is strongly opposed to having a foreign consortium export Bolivia's natural gas without processing it before. He argued it should be used domestically to help Bolivia, the poorest country in South America.
Chile and Bolivia maintain consular relations, and appear to have become friendlier. Former Chilean President Ricardo Lagos
attended the inauguration of current Bolivian President Evo Morales
. Morales has repeatedly announced his intention to establish diplomatic relations with Chile once more, but has still not given up Bolivia's claim to the sea.
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
and the Bolivian Republic
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...
. Bolivia and Chile have had strained relations ever since independence in the early 19th century because of the Atacama border dispute
Atacama border dispute
The Atacama border dispute was a dispute between Chile and Bolivia in the 19th century that ended in the transfer to Chile of all of the Bolivian Coast and the southern tip of Bolivia's ally Peru through the Treaty of Ancón with Peru and the Treaty of Peace and Friendship of 1904 between Chile and...
. Relations soured even more after Bolivia lost its coast to Chile during the War of the Pacific
War of the Pacific
The War of the Pacific took place in western South America from 1879 through 1883. Chile fought against Bolivia and Peru. Despite cooperation among the three nations in the war against Spain, disputes soon arose over the mineral-rich Peruvian provinces of Tarapaca, Tacna, and Arica, and the...
and became a landlocked country (Bolivia still claims a corridor to the Pacific Ocean.) Chile and Bolivia have maintained only consular relations since 1978 when territorial negotiations failed. Recently with the rise of Evo Morales
Evo Morales
Juan Evo Morales Ayma , popularly known as Evo , is a Bolivian politician and activist, currently serving as the 80th President of Bolivia, a position that he has held since 2006. He is also the leader of both the Movement for Socialism party and the cocalero trade union...
in Bolivia and Michelle Bachelet
Michelle Bachelet
Verónica Michelle Bachelet Jeria is a Social Democrat politician who was President of Chile from 11 March 2006 to 11 March 2010. She was the first woman president of her country...
in Chile relations have improved, although the border dispute is still pending.
Relations following independence from Spain (1818-1828)
When ChileChile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
and Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...
gained independence from Spain in 1818 and 1825 respectively both countries established their borders using the uti possidetis
Uti possidetis
Uti possidetis is a principle in international law that territory and other property remains with its possessor at the end of a conflict, unless otherwise provided for by treaty; if such a treaty doesn't include conditions regarding the possession of property and territory taken during the war,...
principle. The origins of the dispute came from the borders established in the Spanish empire
Spanish Empire
The Spanish Empire comprised territories and colonies administered directly by Spain in Europe, in America, Africa, Asia and Oceania. It originated during the Age of Exploration and was therefore one of the first global empires. At the time of Habsburgs, Spain reached the peak of its world power....
that just defined the Atacama desert as the northern border of the Kingdom of Chile
Kingdom of Chile
The General Captaincy of Chile or Gobernacion de Chile, was an administrative territory of the Viceroyalty of Peru in the Spanish Empire from 1541 to 1818, the year in which it declared itself independent, becoming the Republic of Chile...
. Bolivian and Chilean historians disagree on whether the territory of Charcas
Charcas
Charcas may refer to:* Charcas Province, a province in Potosí Department, Bolivia* Real Audiencia of Charcas, one of six political units of the Viceroyalty of Peru* Charcas, a historical name of Sucre, capital of Bolivia...
, originally part of the Viceroyalty of Peru
Viceroyalty of Peru
Created in 1542, the Viceroyalty of Peru was a Spanish colonial administrative district that originally contained most of Spanish-ruled South America, governed from the capital of Lima...
, later of the Viceroyalty of the Río de la Plata
Viceroyalty of the Río de la Plata
The Viceroyalty of the Río de la Plata, , was the last and most short-lived Viceroyalty of the Spanish Empire in America.The Viceroyalty was established in 1776 out of several former Viceroyalty of Perú dependencies that mainly extended over the Río de la Plata basin, roughly the present day...
and ultimately of Bolivia, included access to the sea. Supporting their claims with different documents, Bolivians claim that it did while Chileans disagree. When Simón Bolívar
Simón Bolívar
Simón José Antonio de la Santísima Trinidad Bolívar y Palacios Ponte y Yeiter, commonly known as Simón Bolívar was a Venezuelan military and political leader...
established Bolivia as a nation in 1825, he claimed access to the sea at the port of Cobija
Cobija
The Bolivian city of Cobija is located about 600 km north of La Paz in the Amazon Basin on the border of Brazil and Peru. Cobija lies on banks of the Rio Acre across from the Brazilian city Brasiléia. Cobija lies at an elevation of ca...
disregarding overlapping claims by Chile, that claimed it had a limit with Peru that ran through Loa River
Loa River
The Loa River is a U-shaped river in Chile's northern Antofagasta Region. At 440 km long it is the country's longest river and the main watercourse in the Atacama Desert.-Course:...
and that Bolivia was therefore landlocked
Landlocked
A landlocked country is a country entirely enclosed by land, or whose only coastlines lie on closed seas. There are 48 landlocked countries in the world, including partially recognized states...
.
Santa Cruz and the War of the Confederation (1829-1839)
Andrés de Santa CruzAndrés de Santa Cruz
Andrés de Santa Cruz y Calahumana was President of Peru and Bolivia...
became president of Bolivia in 1829 and made a military intervention in Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
that lead to the creation of the Peru-Bolivian Confederation
Peru-Bolivian Confederation
The Peru–Bolivian Confederation was a short-lived confederate state that existed in South America between 1836 and 1839. Its first and only head of state, titled Supreme Protector, was the Bolivian president, Marshal Andrés de Santa Cruz....
in 1836. Chilean minister Diego Portales
Diego Portales
Diego José Pedro Víctor Portales Palazuelos was a Chilean statesman and entrepreneur. As a minister of president José Joaquín Prieto Diego Portales played a pivotal role in shaping the state and government politics in the 19th century, delivering with the Constitution of 1833 the framework of the...
perceived the confederation as a threat to Chilean interest and the balance of power in the region. Chile declared war in 1836 followed by Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
in 1837, both countries were supported by Peruvian dissidents. The war begun with Confederation victories against its enemies. A turning point took place on the fields of Paucarpata where the Peru-Bolivian Confederation led by Santa Cruz forced the Chilean and Peruvian rebel armies to sign the peace treaty known as the Paucarpata Treaty, which included their unconditional surrender; later this treaty was discarded by the Chilean parliament. The Peruvian rebels and the Chilean army set off to a new campaign against Santa Cruz, defeating the Confederation on the fields of Yungay
Battle of Yungay
The Battle of Yungay effectively destroyed the Peru-Bolivian Confederation created by Bolivian Marshal Andrés de Santa Cruz in 1836...
. The confederation was dissolved in 1839. This was the turning point on Bolivian history after this moment for nearly 60 years, coups and short-lived constitutions dominated Bolivian politics.
Border and economic treaty (1866-1874)
Bolivian-Chilean national borders had not been agreed until 1866; when the two countries had negotiated a treaty that established the 24th parallel south24th parallel south
The 24th parallel south is a circle of latitude that is 24 degrees south of the Earth's equatorial plane, about 60km south of the Tropic of Capricorn...
as their boundary. In Chile the territories recognised as Bolivian in the Pacific coast were seen as ceded, while in Bolivia they were seen as finally recognised by Chile as Bolivian. This treaty also entitled Bolivia and Chile to share in tax revenue on mineral exports out of the territory between the 23rd
23rd parallel south
The 23rd parallel south is a circle of latitude that is 23 degrees south of the Earth's equatorial plane, about 50km north of the Tropic of Capricorn...
and 25th parallels
25th parallel south
The 25th parallel south is a circle of latitude that is 25 degrees south of the Earth's equatorial plane, just south of the Tropic of Capricorn...
. The area between the 25th and 23rd parallel would also remain demilitarized. A second treaty in 1874 superseded this, entitling Bolivia to collect full tax revenue between the 23rd and 24th parallels, but fixed tax rates on Chilean companies for 25 years. At the time most economic exploitation of the coastal region was being conducted by Chilean companies and British interests, under the aegis of Chile's more robust economy and more stable institutions. Bolivia subsequently became dissatisfied at the arrangement due to the negative financial status of the national budget, especially after the earthquakes that struck Cobija
Cobija, Chile
Cobija was the first significant Pacific Ocean port of independent Bolivia. In 1825, it was the main port of Bolivia due to the Potosí silver mine....
in 1868
1868 Arica earthquake
The 1868 Arica earthquake was an earthquake that occurred on August 13, 1868, near Arica, then part of Peru, now part of Chile, at 21:30 UTC. It had an estimated magnitude between 8.5 and 9.0...
and 1877
1877 Iquique earthquake
The 1877 Iquique earthquake occurred at 21:16 local time on 9 May . It had a magnitude of 8.8 on the moment magnitude scale and a maximum felt intensity of XI on the Mercalli intensity scale and triggered a devastating tsunami...
, the only small coastal town originally founded by Bolivians.
War of the Pacific (1879-1904)
In 1879, Bolivian dictator General Hilarión Daza
Hilarión Daza
Hilarión Daza Groselle was President of Bolivia from 1876 to 1879.A career military officer and native of Sucre, Daza came to power on May 4, 1876 in a coup against the constitutional president Tomás Frías. He was supported by much of the country's financial elite because of his avowal to maintain...
increased the taxes on the exportation of saltpeter, violating the 1866 treaty. When Chilean-owned saltpeter companies refused to pay, Daza expropriated their companies and sold them in a public auction. Daza then put an end to all commerce with Chile and exiled all Chilean residents in Bolivia (the Bolivian port of Antofagasta
Antofagasta
Antofagasta is a port city in northern Chile, about north of Santiago. It is the capital of Antofagasta Province and Antofagasta Region. According to the 2002 census, the city has a population of 296,905...
had more Chileans than Bolivians). In response, Chile declared the border treaties null and reactivated its old claim that Chile had inherited a land border with Peru using the uti possidetis
Uti possidetis
Uti possidetis is a principle in international law that territory and other property remains with its possessor at the end of a conflict, unless otherwise provided for by treaty; if such a treaty doesn't include conditions regarding the possession of property and territory taken during the war,...
principle. Chile disembarked troops at Antofogasta the day of the auction. Later Chile declared war on Bolivia and occupied Bolivia's coast. Peru had, in 1873, signed a secret pact with Bolivia in which the two countries agreed to fight together against any nation that threatened either of them. When Peru refused to be neutral in the conflict between Chile and Bolivia, Chile declared war on Peru. Chile defeated both countries and annexed the coast claimed by Bolivia. This was ratified by Peru in the Treaty of Ancón
Treaty of Ancón
The Treaty of Ancón was signed by Chile and Peru on 20 October 1883, in the Ancón District near Lima. It was intended to settle the two nations' remaining territorial differences at the conclusion of their involvement in the War of the Pacific and to stabilise post-bellum relations between...
(1883) and by Bolivia treaty in a Peace and Friendship treaty signed in 1904.
1904 Bolivia-Chile treaty
Further negotiations (1964-1978)
Diplomatic relations with Bolivia continued to be strained because of Bolivia's continuing aspiration to the sea. In 1964, Bolivian President Víctor Paz EstenssoroVíctor Paz Estenssoro
Ángel Víctor Paz Estenssoro was a politician and president of Bolivia. He ran for president 8 times , winning in 1951, 1960, 1964, and 1985....
severed diplomatic relations with Chile. Generals Augusto Pinochet
Augusto Pinochet
Augusto José Ramón Pinochet Ugarte, more commonly known as Augusto Pinochet , was a Chilean army general and dictator who assumed power in a coup d'état on 11 September 1973...
and Hugo Banzer
Hugo Banzer
Hugo Banzer Suárez was a politician, military general, dictator and President of Bolivia. He held the Bolivian presidency twice: from August 22, 1971 to July 21, 1978, as a dictator; and then again from August 6, 1997 to August 7, 2001, as constitutional President.-Military and ideological...
resumed diplomatic relations and attempted to settle territorial disputes. The secret negotiations started in 1973 and in 1975 diplomatic relations between Chile and Bolivia were established. That year, Pinochet and Banzer met in the Bolivian border town of Chañara. Pinochet agreed to give Bolivia a small strip of land running between the Chilean city of Arica
Arica
Arica is a city in northern Chile. "Arica" may also refer to:Places* Arica and Parinacota Region, Chile* Arica Airport , Chile* Arica, Amazonas, town in Colombia* Rio Aricá-açu, tributary of the Cuiabá River south of Cuiabá, BrazilOther...
and the Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
vian border. However the Treaty of Lima between Peru and Chile specified that Chile must consult Peru before granting any land to a third party in the area of Tarapacá
Tarapacá Region
The I Tarapacá Region is one of Chile's 15 first order administrative divisions. It borders the Chilean Arica and Parinacota Region to the north, Bolivia's Oruro Department on the east, the Antofagasta Region on the south and the Pacific Ocean on the west. The port city of Iquique The I Tarapacá...
. Peruvian President General Francisco Morales Bermúdez
Francisco Morales Bermúdez
Francisco Morales Bermúdez Cerruti is a Peruvian general who came to power in Peru in 1975 after deposing his predecessor, General Juan Velasco. His grandfather and all his original family were from the old Peruvian department of Tarapacá, which is now part of the Chilean territory...
did not agree with the Chañara proposal and instead drafted his own proposal, in which the three nations would share administration of the port of Arica and the sea immediately in front of it. Pinochet refused this agreement, and Banzer broke ties with Chile again in 1978. The failure of the Chañara accords was one of the reasons of Banzer's downfall that very year.
Bolivian gas conflict
In early 2002 the administration of President Jorge QuirogaJorge Quiroga
Jorge Fernando "Tuto" Quiroga Ramírez was President of Bolivia from August 7, 2001 to August 6, 2002. He is of Spanish descent.-Background and early life:...
proposed building the pipeline through neighboring Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
to the port of Mejillones
Mejillones
Mejillones is a Chilean port city and commune in Antofagasta Province, Antofagasta Region. Its name is the plural form of the Spanish mejillón meaning "mussel", referring to a particularly abundant species and preferred staple food of its indigenous inhabitants. It is situated in the northern side...
, the most direct route to the Pacific ocean
Pacific Ocean
The Pacific Ocean is the largest of the Earth's oceanic divisions. It extends from the Arctic in the north to the Southern Ocean in the south, bounded by Asia and Australia in the west, and the Americas in the east.At 165.2 million square kilometres in area, this largest division of the World...
to export the newly discovered gas reserves in Bolivia. However, antagonism towards Chile runs deep in Bolivia because of the loss of Bolivia's Pacific coastline to Chile in the War of the Pacific
War of the Pacific
The War of the Pacific took place in western South America from 1879 through 1883. Chile fought against Bolivia and Peru. Despite cooperation among the three nations in the war against Spain, disputes soon arose over the mineral-rich Peruvian provinces of Tarapaca, Tacna, and Arica, and the...
(1879–1884).
Bolivians began campaigning against the Chilean option, arguing instead that the pipeline should be routed north through the Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
vian port of Ilo
Ilo
Ilo is a port city in southern Peru, with some 58,000 inhabitants. It is the largest city in the Moquegua Region and capital of the province of Ilo.-History:...
, 260 km further from the gas fields than Mejillones, or, better yet, first industrialised in Bolivia. According to Chilean estimates, the Mejillones option would be $600 million cheaper.
Peru, however, claimed the difference in cost would be no more than $300 million. Bolivian proponents of the Peruvian option say it would also benefit the economy of the northern region of Bolivia through which the pipeline would pass.
Supporters of the Chile pipeline argued that US financiers would be unlikely to develop processing facilities within Bolivia. Meanwhile, the Peruvian government, eager to promote territorial and economic integration, offered Bolivia a special economic zone for 99 years for exporting the gas at Ilo, the right of free passage, and the concession of a 10 km² area, including a port, that would be exclusively under Bolivian administration. President Jorge Quiroga postponed the decision shortly before leaving office in July 2002 and left this highly contentious issue to his successor. It was thought Quiroga did not want to jeopardize his chances of re-election as president in the 2007 elections.
After winning the 2002 presidential election Gonzalo Sánchez de Lozada
Gonzalo Sánchez de Lozada
Gonzalo Sánchez de Lozada y Sánchez de Bustamante , familiarly known as "Goni", is a Bolivian politician, businessman, and former President of Bolivia. A lifelong member of the Movimiento Nacionalista Revolucionario , he is credited for using "shock therapy", the economic theory championed by then...
expressed his preference for the Mejillones
Mejillones
Mejillones is a Chilean port city and commune in Antofagasta Province, Antofagasta Region. Its name is the plural form of the Spanish mejillón meaning "mussel", referring to a particularly abundant species and preferred staple food of its indigenous inhabitants. It is situated in the northern side...
option but made no "official" decision. Despite this, a consortium
Consortium
A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal....
called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the British companies BG Group
BG Group
BG Group plc is a global oil and gas company headquartered in Reading, United Kingdom. It has operations in 25 countries across Africa, Asia, Australasia, Europe, North America and South America and produces around 680,000 barrels of oil equivalent per day. It has a major Liquefied Natural Gas ...
and BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
, and Spain's Repsol YPF
Repsol YPF
Repsol YPF, S.A. is an integrated Spanish oil and gas company with operations in 29 countries...
. Repsol is one of three companies that dominate the gas sector in Bolivia. The other two are Petrobras
Petrobras
Petróleo Brasileiro or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in Latin America by market capitalization and revenue, and the largest company headquartered in the Southern Hemisphere by market...
and Total
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
A plan costing US$6 billion was drawn up to build a pipeline to the Pacific coast, where the gas would be processed and liquefied
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
before being shipped to Mexico and the United States (Baja California
Baja California
Baja California officially Estado Libre y Soberano de Baja California is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is both the northernmost and westernmost state of Mexico. Before becoming a state in 1953, the area was known as the North...
and California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
), through a Chilean port, for example Tocopilla
Tocopilla
Tocopilla is a city and commune in the Antofagasta Region, in the north of Chile. It is the capital of the province that bears the same name.Tocopilla celebrates its anniversary on September 29 every year with a big show the day before, which includes a parade down the main street of the city, food...
. The 2003 Lozada deal was heavily opposed by Bolivian society, in part because of nationalistic resentment against Chile. However, the Gas War led to his resignation in October 2003.
Lozada's successor, Carlos Mesa
Carlos Mesa
Carlos Diego Mesa Gisbert is a Bolivian politician, historian and President of Bolivia from October 17, 2003 until his resignation on June 6, 2005....
, made a referendum about the gas
Bolivian gas referendum, 2004
Bolivia held a referendum on the future of its natural gas reserves on Sunday, 18 July 2004. The referendum was one of the first promises made by President Carlos Mesa upon assuming the presidency in the aftermath of the Bolivian Gas War of October 2003 that saw his predecessor, Gonzalo Sánchez de...
into which the question Do you agree with President Carlos Mesa's policy of using gas as a strategic recourse to achieve a sovereign and viable route of access to the Pacific Ocean? was added. 54.79% of the votes said "yes" to this question. Mesa even took the question about a sea access to the OAS
Organization of American States
The Organization of American States is a regional international organization, headquartered in Washington, D.C., United States...
where he had a verbal intercourse with Chilean president Ricardo Lagos
Ricardo Lagos
Ricardo Froilán Lagos Escobar is a lawyer, economist and social democrat politician, who served as president of Chile from 2000 to 2006. He won the 1999-2000 presidential election by a narrow margin in a runoff over Independent Democrat Union candidate Joaquín Lavín...
who said that is was a bilateral topic. Mesa resigned following the 2005 Hydrocarbons Law.
Evo Morales
Evo Morales
Juan Evo Morales Ayma , popularly known as Evo , is a Bolivian politician and activist, currently serving as the 80th President of Bolivia, a position that he has held since 2006. He is also the leader of both the Movement for Socialism party and the cocalero trade union...
was elected president in 2005 and is strongly opposed to having a foreign consortium export Bolivia's natural gas without processing it before. He argued it should be used domestically to help Bolivia, the poorest country in South America.
Chile and Bolivia maintain consular relations, and appear to have become friendlier. Former Chilean President Ricardo Lagos
Ricardo Lagos
Ricardo Froilán Lagos Escobar is a lawyer, economist and social democrat politician, who served as president of Chile from 2000 to 2006. He won the 1999-2000 presidential election by a narrow margin in a runoff over Independent Democrat Union candidate Joaquín Lavín...
attended the inauguration of current Bolivian President Evo Morales
Evo Morales
Juan Evo Morales Ayma , popularly known as Evo , is a Bolivian politician and activist, currently serving as the 80th President of Bolivia, a position that he has held since 2006. He is also the leader of both the Movement for Socialism party and the cocalero trade union...
. Morales has repeatedly announced his intention to establish diplomatic relations with Chile once more, but has still not given up Bolivia's claim to the sea.
See also
- Landlocked country
- Puna de Atacama Lawsuit
- Foreign relations of BoliviaForeign relations of BoliviaBolivia traditionally has maintained normal diplomatic relations with all hemispheric states except Chile. Foreign relations are handled by the Ministry of Foreign Affairs....
- Foreign relations of ChileForeign relations of ChileSince its return to democracy in 1990, Chile has been an active participant in the international political arena. Chile assumed a two-year non-permanent position on the UN Security Council in January 2003 and is an active member of the UN family of agencies, serving as a member of the Commission on...