UPDATE 1-Bolivia raises wages to defuse fuel hike tensions

* Protest leaders want Morales to revoke fuel price hike

* Powerful government supporters upset, plan protests
(Recasts with wage hike announcement by Morales)

By Carlos Alberto Quiroga

LA PAZ, Dec 29 (BestGrowthStock) – Bolivian President Evo Morales
raised the minimum wage by 20 percent on Wednesday in a bid to
defuse social tensions over hefty fuel price increases that
have sparked protests in the impoverished Andean country.

Morales’ government cut state fuel subsidies on Sunday,
pushing up prices by as much as 83 percent and triggering a
strike by truckers and bus drivers.

Bolivia’s largest trade union called for a day of national
rallies to denounce an increase in fuel prices, joining
powerful citizen groups in criticizing the leftist Morales in a
protest with roots in his support base.

“I’ve chosen to look after the national economy even though
this will cost me politically. Let them say that this is making
Evo Morales weaker. They can say whatever they like, but my
first priority is the motherland,” Morales said in a televised
speech.

The decision to cut fuel subsidies is part of a plan to
encourage more investment in the energy sector. State energy
company YPFB has said it will pay more for crude oil.

As well as increasing the monthly minimum wage by 20
percent to nearly $115, Morales, who is popular among the
indigenous majority, also announced year-end bonuses for
public-sector workers as a means to offset price increases
resulting from the rise in fuel prices.

The country’s largest trade union, the Bolivian Workers
Central group known by its Spanish acronym COB, called for “a
national day of rallies against the fuel hike” on Monday.

COB, an umbrella organization that covers all of Bolivia’s
trade unions, including workers in the mining, manufacturing
and energy industries, called for rallies in Bolivia’s major
cities and protesters were expected to block roads.

Other groups, including opposition parties and citizens
groups, plan to stage protests throughout the country.

“Whatever they do to offset this, it won’t be enough …
What the government has to do is to revoke the fuel price
increase and stay with the people who have supported them,”
said Fanny Nina, the head of FEJUVE, which groups neighborhood
associations in El Alto, a city of nearly 1 million people and
traditionally a Morales stronghold.

MEETS WITH LOCAL LEADERS

Local media said Morales met grass-roots leaders to explain
the government’s decision to cut the fuel subsidies and listen
to complaints. He also held a special meeting with government
ministers late on Tuesday.

Two Bolivian presidents from 2003 to 2005 were toppled amid
social protests in which El Alto citizens groups played a key
role. But the historically volatile country has been relatively
stable since Morales was elected in 2005 as the nation’s first
indigenous president.

Miners, teachers and peasant farmers often take to the
streets to press specific demands, although most still back
Morales because of his efforts to redistribute the wealth from
the country’s vast natural gas reserves.

But opposition to the fuel price increase has brought
together a wide variety of groups who fear that food,
transportation and consumer goods will soon be out of the reach
of many poor Bolivians.

After winning re-election by a landslide in 2009, Morales
vowed to deepen leftist reforms to give the state a bigger role
in the economy.

He nationalized the energy industry in 2006, which is
centered on natural gas exports. Bolivia has the second-largest
natural gas reserves in South America, after Venezuela, and it
supplies Brazil and Argentina.

Brazil’s Petrobras (PETR4.SA: ), Spain’s Repsol (REP.MC: ) and
France’s Total (TOTF.PA: ) are among the biggest foreign
investors in the Bolivian energy industry.
(Writing by Eduardo Garcia; editing by Chris Wilson)

UPDATE 1-Bolivia raises wages to defuse fuel hike tensions