O doomsayers, what say you to this?

Evo and Lula have just inked an agreement over natural gas. And not a shot was fired, as some were fearing when the Bolivian army went ahead with nationalization plans!

Bolivia has reached agreement on a price increase over its natural gas exports to Brazil.

The deal, signed by Brazilian President Luis Inacio Lula da Silva and his Bolivian counterpart Evo Morales, ends months of dispute over the issue.

Under the agreement, Brazil is expected to pay at least $100m more a year for its gas, officials said.

Negotiations began last year, when Mr Morales said an increase in the price would help lift Bolivia out of poverty.

Brazil depends on Bolivia for 50% of its daily gas supply. Last year, it paid nearly $1.3bn for Bolivian gas.


The deal does not actually increase the basic price that Brazil pays for Bolivian natural gas, which is already contained in the contract between the two countries.

However, Bolivia will now be allowed to charge more for individual components of the gas, such as ethane, butane and liquid petroleum gas, according to a complex formula based on calorific content.

Last year, the Bolivian government signed a deal that more than tripled natural gas exports to Argentina at increased prices.

So, let’s see what this means: Evo fulfils a major campaign promise to his people a little more than a year after being elected, and that’s only one of several. And, remarkably, he manages to do it peacefully, too. At this rate, even Chavecito will soon have to sit by and take notes.

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