February 1, 2008 / 3:45 PM / 11 years ago

Bolivia's Morales defies opposition on pension plan

LA PAZ, Feb 1 (Reuters) - Bolivia’s leftist government started paying pensions to all the elderly for the first time on Friday, angering opposition governors by using some of the energy-sector revenues they used to control.

The pension plan is one of the thorniest issues in a wider political conflict in Bolivia, where four opposition-led provinces declared autonomy in December after rejecting a draft constitution approved by allies of President Evo Morales.

Morales, the country’s first indigenous president, began talks with the opposition governors three weeks ago but the two sides continue to trade bitter accusations.

The government went ahead with the pension scheme, financing it with energy revenues after negotiations aimed at finding a new funding formula failed.

“These economic resources, whether from our natural resources or the direct tax on hydrocarbons, don’t belong to the president or the mayors or the governors,” Morales said as he launched the pension early on Friday.

“This money belongs to the Bolivian people and must return to the Bolivian people,” he said in a televised speech.

The governors of five provinces urged Morales on Thursday to reconsider their proposals on pension funding and autonomy or carry out a last-resort plan to put the mandates of the president and nine governors to a national vote.

“The Bolivian people know that a democratic solution to this situation of tension and crisis is in your hands,” the governors said in a letter to the president.

The rebel provinces in the eastern lowlands include Santa Cruz and Tarija — where Bolivia’s vast natural gas riches lie — along with Beni and Pando. The central district of Cochabamba is aligned with these four provinces, although it has not declared itself autonomous.

Morales’ power base is in the west, where Bolivia’s majority indigenous population is strongest.

Opposition governors say they support the pension program but oppose the way it is being funded.

Nearly 700,000 Bolivians aged 60 or older are eligible for the new benefit. People who receive no other pension will get 200 bolivianos (about $26) a month, while those who already have a pension will get 150 bolivianos (about $19.50) a month.

“Those who oppose this pension and say they defend regional resources are the same people who opposed the energy nationalization that generated those resources,” said Casiano Amurrio, a retired union leader.

Morales said the pension program would cost South America’s poorest country about $205 million a year.

Since he took office two years ago, Morales has met campaign pledges to nationalize the energy sector and rewrite the constitution to give more power to the neglected Indian majority.

But his allies at a constitutional assembly passed the proposed charter during an opposition boycott, and critics say the text is illegal.

The draft constitution, which would guarantee pensions for the elderly indefinitely, must still go to two referendums. (Additional reporting by Carlos Quiroga; Editing by Kieran Murray)

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