Three days later, while more than 80,000 protesters surrounded the presidential palace, Mesa offered his resignation to Congress in a televised address. Congress had turned down a similar “offer” in March.

Prior to this announcement, Mesa had set a date of October 16 for both the election of a constituent assembly and for a nationwide referendum on demands by wealthy businessmen and landowners for greater autonomy in the eastern and southern provinces, which contain most of the oil and gas reserves. Prominent protest leaders dismissed the move and continued to call for mobilizations in the streets.

“The country is the subject of pressures and tensions that can make it explode,“ Mesa said in the June 3 decree. The day before the Financial Times warned that “Bolivia is caught in a dangerous ‘power vacuum’ in which the conventional institutions of government are failing to function.”

The protests began when the Bolivian Congress narrowly approved a bill that raised taxes on foreign energy monopolies from 10 percent to 32 percent, in addition to existing royalties of 18 percent. It was passed partly as a concession to protests that have included demands ranging from a 50 percent tax increase to nationalization of the country’s oil and gas.

Mesa has opposed the 50 percent increase, calling it “suicidal” because it would discourage foreign investment. After the 32 percent tax was approved, Repsol YPF announced that it would suspend a “significant” investment project in Bolivia, reported Reuters. Repsol, the largest oil company in Spain, has major operations in Bolivia. The company planned to spend $850 million to exploit Bolivia’s energy resources between 2005 and 2009.

Organizations such as the Bolivian Workers Federation (COB) and the Federation of Neighborhood Committees of El Alto are demanding nationalization of the gas and oil industries. “We are going to talk it over with the other leaders, but I don’t think the protests will be called off because nationalization of oil and gas is not the [president’s] message, and that was the focus for us,” said Abel Mamani, a leader of the protests in El Alto.

Evo Morales, leader of the Movement Toward Socialism (MAS), called Mesa’s proposal “another show” to demobilize the protests, according to Reuters. The MAS, one of the main opposition parties in parliament and a force in the protests, has called for a 50 percent tax on the energy monopolies instead of nationalization.

Organizations of Bolivia’s indigenous peoples are playing a central role in the protests. In response to the president's decree, thousands of Indians marched through La Paz shouting, “Mesa go home, power for the people,” reported Reuters. Indigenous organizations have also demanded a rewriting of the constitution with the aim of extending their rights. Aymara- and Quechua-speaking Indians make up just over half of the country’s 8 million people but are substantially underrepresented in government.

While the election of an assembly to rewrite the constitution is scheduled for October 16, wealthy businessmen and landowners in the eastern province of Santa Cruz have unilaterally set a date for a referendum on greater autonomy for August. They fear that the vote on a new constitution could undercut their chances for autonomy, which is aimed at maintaining the capitalist class’s hold on the country’s energy resources.  
 
 
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