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Bolivia’s president is expected to push for higher prices for the country’s gas exports at a meeting with the Brazilian president on Tuesday, claiming popular backing for his hydro­carbons policy following elections to an assembly to rewrite the country’s constitution.

Evo Morales’s Movement to Socialism (MAS) party looked on course to win 134 seats in the 255-seat body following Sunday’s election, more than twice the number of its nearest rival.

However, as expected, it failed to gain the two-thirds majority it would need to pass constitutional proposals within the assembly. The government also secured a nationwide No vote in a simultaneous referendum on regional autonomy.

“We have won in three ways: the No triumphed; we gained more than 60 per cent of the votes; and we achieved an absolute majority in the constituent assembly,” Mr Morales said.

The constituent assembly election, which had failed to generate anything reminiscent of the excitement of Mr Morales’s landslide victory last December, was widely seen as a litmus test of the leftwing leader’s five-month administration.

Many analysts had expected the government to be dealt a blow on the autonomy issue and to see a reduction in its support as middle-class voters drifted away. But instead, Mr Morales’s party won about the same proportion of the votes as it did in the general elections.

The president said voters had backed a decree his government issued in May “nationalising” the country’s gas sector, the second-largest in the region.

“With this support, we have consolidated the nationalisation of hydrocarbons and all our natural resources, and we have consolidated the process of change,” he said.

Mr Morales’s most pressing task is to follow through on his “nationalisation” plan by negotiating higher prices for gas exports from Bolivia to Brazil. He is due to arrive in Caracas on Tuesday to speak to Luiz Inácio Lula da Silva, Brazil’s president, at the sidelines of a summit of Mercosur, the South American trade bloc, of which Bolivia is not a member.

Petrobras, Brazil’s state-controlled energy company, is the biggest foreign investor in Bolivia and the largest buyer of the country’s gas exports, consuming some 26m cubic metres a day.

Brazil currently pays about $4 (€3.10, £2.20) per million BTUs for Bolivian gas. Andrés Soliz, Bolivia’s hydrocarbons minister, says the Morales administration is hoping to negotiate a price increase of some 87 per cent, to $7.50, although a more realistic figure might be closer to $5, which Argentina last week agreed to pay for its gas imports from Bolivia.

Domestically, the biggest problem facing Mr Morales is the question of regional autonomy. Although Mr Morales managed to quash the autonomy campaign at national level – with some 54 per cent of voters supporting his No campaign – he will probably have to compromise with Bolivia’s four lowland departments, all of which voted decisively in favour of greater regional devolution.

As the results came out on Sunday night, people poured on to the streets of Santa Cruz, Bolivia’s second city, in the south-east, and home of the autonomy movement, to celebrate a Yes vote of about 73 per cent. Rubén Costas, the departmental prefect, told the crowd they had now assured the autonomy of Santa Cruz.

Since the government is likely to find it difficult to impose its will on the constituent assembly, it could instead sideline the body and continue to implement its programme through presidential decree.

Mr Morales has largely ignored Congress, in which the MAS has a majority, since he took power in January, emitting declarations on gas, economic policy, foreign affairs and social issues without consulting the legislature.

Copyright The Financial Times Limited 2017. All rights reserved.
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