Almost a year after violence erupted in Venezuela, another Latin American country, Bolivia, has undergone its worst crisis in over 20 years of democracy. Four weeks of deadly street riots against the country's unpopular President Gonzalo Sanchez de Lozada left more than 74 protesters dead, finally bringing to his October 17 resignation. The riots were triggered by a government decision to embark on a $5 billion project to export natural gas to the U.S.

Though the Andean nation of 8 million is the poorest country in Latin America - over 70% of Bolivians live below the poverty line - it has large underground reserve of natural gas that the government is planning to harvest, in association with a British-backed consortium, Pacific LNG. What made the decision particularly controversial was the government intention to export the gas through Chile, with which Bolivia has a century-old border dispute.

Bolivia became a landlocked state in 1879 after a war against Chile, which cut its access to the sea. Since then Bolivians view Chile as a national enemy, the country responsible for them being landlocked, and the idea of giving Chile a lucrative gas deal without a sea access deal in return is unacceptable to them. Tens of thousands of opponents of the deal blocked highways into the capital La Paz carrying banners with slogans against the government: "Chile will steal the gas from us" and "Chile is our enemy."

There were other issues: Bolivia has a long history of foreign exploitation, beginning with Spanish colonists sending home its silver and leaving Bolivians deprived. Millions of Bolivian Indians and slaves died extracting silver for the Spanish and many see the gas-export project as a return to that legacy. Bolivians are concerned that, as before, the money will end up in the pockets of elites rather than benefiting the population at large.

Uneven distribution of wealth has already sparked political violence. Earlier this year, in February, 32 people died in rioting in La Paz after the president tried to impose new taxes in order to meet austerity measures prescribed by the International Monetary Fund. Later, in September, seven people were killed in clashes with the security forces.

The October riots were too severe for President Sanchez de Lozada to remain in power. After a bloody day on October 12 in which 20 protesters were killed after thousands of troops backed by tanks were sent to quell unrest, Lozada agreed to reconsider the deal "until consultations have been conducted with the Bolivian people." He said the consultations would be wrapped up by the end of the year, and a decision would be made as to whether the gas will be shipped through ports in Chile or Peru. But this came too late to satisfy the angry Bolivians and Lozada was forced to step down. Bolivia's new president, Carlos Mesa, said he will review the free-market energy sector policies that helped spark the deadly revolt.

A decision to suspend the deal would deny Bolivia the funds required to address its severe social and economic problems. Equally controversial would be a decision to go ahead with the deal and the months ahead will require Mesa to carefully negotiate a creative solution that would allow Bolivia to sell its gas while using the revenues to improve the country's welfare.

From a U.S. perspective the gas controversy comes at a time natural gas is in high demand. The U.S. accounts for over a quarter of global natural gas consumption and is currently facing a shortage likely to drive prices up as winter arrives.

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