Resource Nationalism and Energy Integration in Latin America: the Ap Radox of Populism Brian Hollingsworth [email protected]
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Florida International University FIU Digital Commons FIU Electronic Theses and Dissertations University Graduate School 6-20-2018 Resource Nationalism and Energy Integration in Latin America: The aP radox of Populism Brian Hollingsworth [email protected] DOI: 10.25148/etd.FIDC006843 Follow this and additional works at: https://digitalcommons.fiu.edu/etd Part of the Comparative Politics Commons, Economic Policy Commons, Energy Policy Commons, Growth and Development Commons, International Economics Commons, International Relations Commons, Latin American Studies Commons, Macroeconomics Commons, Political Economy Commons, and the Regional Economics Commons Recommended Citation Hollingsworth, Brian, "Resource Nationalism and Energy Integration in Latin America: The aP radox of Populism" (2018). FIU Electronic Theses and Dissertations. 3790. https://digitalcommons.fiu.edu/etd/3790 This work is brought to you for free and open access by the University Graduate School at FIU Digital Commons. It has been accepted for inclusion in FIU Electronic Theses and Dissertations by an authorized administrator of FIU Digital Commons. For more information, please contact [email protected]. FLORIDA INTERNATIONAL UNIVERSITY Miami, Florida RESOURCE NATIONALISM AND ENERGY INTEGRATION IN LATIN AMERICA: THE PARADOX OF POPULISM A dissertation submitted in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY in INTERNATIONAL RELATIONS by Brian Edward Hollingsworth 2018 To: Dean John F. Stack, Jr. Steven J. Green School of International and Public Affairs This dissertation, written by Brian Edward Hollingsworth, and entitled Resource Nationalism and Energy Integration in Latin America: The Paradox of Populism, having been approved in respect to style and intellectual content, is referred to you for judgement. We have read this dissertation and recommend that it be approved. __________________________________________ Maria Willumsen __________________________________________ Frank Mora __________________________________________ Harry Gould __________________________________________ Eduardo Gamarra, Major Professor Date of Defense: June 20, 2018 The dissertation of Brian Edward Hollingsworth is approved. __________________________________________ Dean John F. Stack, Jr. Steven J. Green School of International and Public Affairs __________________________________________ Andres G. Gil Vice President for Research and Economic Development and Dean of the University Graduate School Florida International University, 2018 ii © Copyright 2018 by Brian Edward Hollingsworth All rights reserved. iii ABSTRACT OF THE DISSERTATION RESOURCE NATIONALISM AND ENERGY INTEGRATION IN LATIN AMERICA: THE PARADOX OF POPULISM by Brian Edward Hollingsworth Florida International University, 2018 Miami, Florida Professor Eduardo Gamarra, Major Professor This dissertation examines the relationship between resource nationalism and energy integration, and uses Bolivia and Brazil as a test case. This study asks if resource nationalism affects energy integration. The findings nest within more expansive questions on international political economy and export-driven models of development. Why do populist regimes, historically operating under an economic nationalist cum protectionist paradigm, simultaneously pursue policies of economic integration? What is the relationship between resource nationalists and open markets, especially in the hydrocarbons sector? What is the relationship between populists, who are typically resource nationalists, and their decision to choose policies of energy integration? The most common responses to the above are that resource nationalists pursue protectionist policies in the hydrocarbon sector. This dissertation demonstrates that once in power, resource nationalists do not always pursue protectionist policies in the hydrocarbon sector, but instead rely on market forces. Another common response is that populists pursue policies of resource nationalism in the hydrocarbon sector. This dissertation demonstrates that populists do not always pursue policies of resource nationalism in the hydrocarbon sector, but instead choose policies of integration. Policies iv of integration are compelled by market forces, and at times ironically provide the foundation for resource nationalism to later flourish. This dissertation develops a case-study of Bolivia and Brazil to assess the relationship between resource nationalism and energy integration. The case is selected based on each country having energy resources or derivative products for exploitation and use, an energy trade relationship between the countries, the presence of government-run natural resource firms in each country, and a specific period where resource nationalism is present. Bolivia and Brazil are important for this study because of their proximity, particularly where the supply of natural gas is concerned. Proximity is of great importance as natural gas infrastructure is concomitant with energy integration, particularly supply. v TABLE OF CONTENTS CHAPTER PAGE I. CHAPTER ONE…………………………………………………………..…..1 Introduction, Research Purpose, and Research Question…………………1 Literature Review………………………………………………………...11 Methodology……………………………………………………………..43 Chapter Outline…………………………………………………………..51 Appendix………………………………………………………………....55 Works Cited……………………………………………………………...57 II. CHAPTER TWO…………………………………………………………….65 Bolivia: Chapter Abstract………………………………………………..65 Bolivia: Current Scenario………………………………………………..65 Bolivia: Markets, Boom-Bust Cycle, and Populism…………………….69 Bolivia’s Natural Gas Relationship with Brazil: A Synopsis…………..116 Works Cited…………………………………………………………….117 III. CHAPTER THREE…………………………………………………………120 Brazil: Chapter Abstract………………………………………………...120 Brazil: Current Scenario………………………………………………...120 Brazil: Populism, Petroleum, and Neoliberalism……………………….122 Brazil’s Natural Gas Relationship with Bolivia: A Synopsis……………155 Works Cited…………………………………………………………….156 IV. CHAPTER FOUR…………………………………………………………..158 Introduction …………………………………………………………….158 Why Natural Gas is Important…………………………………………..161 Background on National Oil Companies, Petroleum, and their Relationships in Bolivia and Brazil…………......……………166 Bolivia…………………………………………………………………..174 Brazil……………………………………………………………………188 Toward the Future………………………………………………………197 Major Conclusions of Chapter Four…………………………………….202 Works Cited…………….…..…………………...……………………...204 V. CHAPTER FIVE: ANALYSIS AND ASSESSMENT…………………….207 General Statement………………………………………………………207 Applicability, Final Observations, and Beyond…………………………220 vi LIST OF GRAPHS GRAPH PAGE Graph 1: Bolivia Trade Balance (% GDP)………………………………….……….….66 Graph 2: Bolivia Foreign Exchange and GDP………………………………………….67 Graph 3: Bolivia External Debt (% GNI)…………………………………….…………67 Graph 4: Bolivia Economic Growth (Rate Change as % of Real GDP…………………68 Graph 5: Bolivia Capital Investment (% GDP)………………………………..………..82 Graph 6: Bolivia Economic Growth (Rate Change as % Real GDP)……………….…..82 Graph 7: Bolivia Exports (% GDP)………………………………………..……………84 Graph 8: Bolivia Commodities as % of Exports (1962-1969)…………………….…….84 Graph 9: Bolivia GDP Per Capita (Constant $)……………………………………..…..85 Graph 10: Bolivia Commodities as % of Exports (1969-1979)……………………...….87 Graph 11: Bolivia Economic Growth (Rate Change as % Real GDP)………….………91 Graph 12: Bolivia GDP Per Capita (Constant $)………………………………………..91 Graph 13: Bolivia Inflation (% Change in CPI)…………………………………………92 Graph 14: Bolivia Foreign Direct Investment (% GDP)………………..……………….93 Graph 15: Bolivia Capital Investment (% GDP)……………………………..………….95 Graph 16: Bolivia Exports (% GDP)……………………………………………...……..96 Graph 17: Bolivia GDP (% Share Agriculture)…………………………………...……..97 Graph 18: Bolivia Manufacturing Value Added ($ Billions)……………………………97 Graph 19: Bolivia Economic Growth (Rate Change as % Real GDP)………….……...101 Graph 20: Bolivia Foreign Direct Investment (% GDP)…………………………...…..102 Graph 21: Bolivia Exports (% GDP)……………………………………….…………..103 Graph 22: Bolivia GDP Per Capita (Constant $)…………………………………...…..104 Graph 23: Bolivia Inflation (% Change in CPI)………………………………………..106 Graph 24: Bolivia Inflation (% Change in CPI)………………………………………..106 Graph 25: Bolivia Inflation (% Change in CPI)……………………………………..…107 Graph 26: Bolivia Commodities as % of Exports (1980-1993)………………..........…108 vii Graph 27: Bolivia Economic Growth (Rate Change as % Real GDP)……...………….110 Graph 28: Bolivia GDP Per Capita (Constant $)………………………………….……111 Graph 29: Bolivia Capital Investment (% GDP)…………………………………...…..113 Graph 30: Bolivia Commodities as % of Exports (1993-2015)………………………...114 Graph 31: Bolivia Exports (% GDP)…………………………………….……………..115 Graph 32: Bolivia Foreign Direct Investment (% GDP)……………………………….115 Graph 33: Brazil Exports (Commodities and Products)………………………………..127 Graph 34: Brazil Exports (Commodities and Products)………………………………..130 Graph 35: Brazil Inflation (% Change in CPI)……………………………...………….141 Graph 36: Brazil Inflation (% Change in CPI)………………………………...……….145 Graph 37: Brazil Foreign Direct Investment (% GDP)…………………………..…….146 Graph 38: Brazil Exports (Commodities and Products)………………………………..147 Graph 39: Brazil GDP (Share of Agriculture)………………………………………….148 Graph 40: Brazil Manufacturing Value Added ($ Billions)……………………………148 Graph 41: Brazil Foreign Direct Investment (% GDP)……………………….………..152 Graph 42: Natural Gas Consumption in Latin America (Bcm) 1965-2013………….…173 Graph 43: Bolivia % of Electricity from Source…………………………...…………..175 Graph 44: Bolivia Trade with Brazil