Evo Morales new president of Bolivia

[Dinner]

Nationalizing the oil and gas industries isn't likely to attract the development dollars the poorest country in South America desperately needs. I suspect they're going to find themselves without the money or expertise necissary to develop the gas fields.

[Dinner]

Originally posted by Arrian
Well I guess the question is can he actually change anything for the better, or will he just blame anything bad on the perfidious Americans and build monuments to himself?

-Arrian

I doubt he'll build monuments but it does seem likely that his campaign to nationalize industries and ramp up cocaine production are going to be bad for the long term development of the country. Just about every major country in the world takes a hard line to drug sanctioning countries and Morales seems to want Bolivia to become a major cocaine exporter dispite his weak denials. That is very likely to earn him sanctions while nationalizing industries is likely to chase of most foreign investors.

[VetLegion]

You didn't tell us what you think Brachy-Pride.

Is this a good thing for Bolivia or bad?

[techumseh]

Originally posted by Oerdin
Nationalizing the oil and gas industries isn't likely to attract the development dollars the poorest country in South America desperately needs. I suspect they're going to find themselves without the money or expertise necissary to develop the gas fields.

If he nationalizes the oil and gas industry, he's going to have a lot of capital available for development. Plus, he's got Chavez and Castro to give a hand.

Past experience (eg. Angola) also shows that big business doesn't really care about your political stripe as long as you can make piles of cash.

[VetLegion]

If he nationalizes the oil and gas industry, he's going to have a lot of capital available for development.

Exactly the opposite. If ne nationalizes the industries, they're going to dwindle from the lack of capital and knowledge. Venezuela's oil production also slumped after nationalization. Examples are galore.

[Dinner]

Big business also has one unbreakable rule. You never give money to people who are going to steal it from you.

Do you really think companies are going to line up to invest the hundreds of millions it will cost to develop virgin fields and build a pipeline if they're worried someone will just nationalize it and take it from them? Countries like Bolivia really need the rule of law and protection of property if they want to develop and improve living standards. I can't think of a single country which successfully got rich by trampling on private property rights. I suppose the USSR successfully developed by ignoring private property but it had a vast amount of resources and in the end it still ended badly for them.

[techumseh]

If you guarantee their investments, as Angola does with Shell or Cuba with Sherrit, they'll invest willingly if there's money to be made.

But don't discount Chavez. I'll wager that Petróleos de Venezuela will be in the forefront of those helping to develop Bolivia's oil and gas resources. Maybe Morales won't need US corporations after all.

[Barnabas]

Brazil,, Argentina and Venezuela are planning to build a huge gasoduct all the way from Venezuela, going thru the amazonas to Bolivia (which has great gas reserves herself) and finally to Argentina, that could help Bolivia a lot.

Now Argentina gets 5% of its gas from Bolivia, Argentina wants to get 20%, but evo said they are selling the gas too cheap to Argentina, Argentines said that if they increase the price more than 23% it would no longer be good busines for Argentina to buy Bolivian gas.

I think they will increase it but not a lot ( far less than 23%)

selling 20% of the gas Argentina needs could give the bolivian government 500 million dollars a year, which is a lot for Bolivia (gdp only 8000 millions)

with the gasoduct and the deal with argentina bolivia has good chances, I think evo is more of a lula than a chavez, he hs already started to sound moderate.
And said he wants foreign investment in exploring for gas and oil, and that his party is not only for indians but for whites too.

they should also negotiate with chile, for a harbor
(all the north of chile used to be bolivian before the pacific war, chile got the northern provinces turning bolivia into a landlocked country, and getting the greatest copper mines in the world, which are still the backbone of chilean economy)

before the war bolivia has great potential

because of its geography, it is very difficult to export thru peru, it is far easier to do it thru chile, but since the war, chile and bolivia have no relations, boivia still claims those lands after more than a century.

in the past chile has offered bolivia a small land trip, but bolivia has said that the port was too small, or not deep enough, those things, we shall see what happens now.

he has chances for improving bolivia.


if he fails, then chaos awaits, the eastern provinces are relatively wealthy, whiter, and dont like the more indian poor west. there is separatist feeling.

Pinochet once said that after losing the pacific war, Bolivia had lost its viability as a country, and that Peru would get the northern provinces, Chile would get Potosi, Argentina would get Tarija, and Santa Cruz would only remain independent.

[Spiffor]

Well, Morales could possibly successfully lobby the UN in order to legalise coca production. At least, if the UN is satisfied with the guarantees Morales offers against cocaine trafficking.

The development of Coca agriculture would have a very positive impact for the Bolvian economy, since it's likely there is a high demand (both international and domestic), and little competition (at least in the short run).

If you add the land-redistribution in the mix, you could end up with a peasantry that lives more comfortably, and which even manages to save money, thus spurring public and private investments in the country.

[Bosh]

Originally posted by Oerdin
Nationalizing the oil and gas industries isn't likely to attract the development dollars the poorest country in South America desperately needs. I suspect they're going to find themselves without the money or expertise necissary to develop the gas fields.

Well he says he's going to get the money from Venezuela, which could actually happen. What's more important for Bolivia is getting a pipe line out to Chile to get the oil exported cheaper.

Damn, must Santa Cruz be pissed about this.

and getting the greatest copper mines in the world, which are still the backbone of chilean economy)

And the biggest pile of bird **** in the world

if he fails, then chaos awaits, the eastern provinces are relatively wealthy, whiter, and dont like the more indian poor west. there is separatist feeling.

Yeah, but in the long term that won't work, there's enough immigration coming down off the Altiplano to shift the democraphics in the east a good bit.

The development of Coca agriculture would have a very positive impact for the Bolvian economy, since it's likely there is a high demand (both international and domestic), and little competition (at least in the short run).

Also it's kind of pointless to ban coca in Bolivia, it's too ingrained in the culture. You get baskets of coca leaves for making tea in hotel breakfast buffets etc. etc. etc.

[Dinner]

The last thing any country needs is more peasant farmers. Land redistribution usually ends up lowering total agricultural output and slashing exports which deprive developing economies of hard currency. Rather then robbing people to give out land a more realistic solution is micro-loans in order to create more small businesses. Shop keepers, artisans, and small time manufacturing (clothing, pottery, etc) would increase economic activity instead of decrease it. It also wouldn't result in capital flight which is typically what happens when governments start nationalizing things without compensation or with below value compensation.

Land "redistribution" is what set off a famine in Zimbabwe and an economic death spiral. True, the dictator has greatly compounded things with ever more bizaar policies but agriculture was the backbone of that nation's economy and it went from surpluses to famine in a very short time. The land got given to people who knew nothing about farming and who didn't have tractors, seeds, or even farm animals to plow the fields after it was taken away from groups which were practicing modern farming techniques.

Now giving unused state owned land might work but I doubt the Bolivian government has truck loads of land to give away like the Brazilian government has.

[Berzerker]

The U.S. Embassy appeared to recognize the inevitable. "We congratulate Evo Morales on his apparent victory," it said Monday. "The quality of our relationship will depend on the policies of the new government on a wide range of issues, most importantly on strong respect for democratic institutions."

his popularity soared after then-U.S. Ambassador Manuel Rocha warned that U.S. aid would probably decline if Morales was elected.

Morales thereafter referred in jest to the U.S. ambassador as "my campaign manager."

Bolivia told to respect democratic institutions as we try to buy elections with our taxes.

[Bosh]

Land "redistribution" is what set off a famine in Zimbabwe and an economic death spiral.

Well it works fine if done right, but you have to make sure the new owners have sufficient know-how and access to capitol. Land redistribution was definately a positive force in East Asia (South Korea, Japan and Taiwan).

[Dinner]

Ideally it would get done the way the UK did it. Meaning you just slap a huge inheritance tax on it so that when grand-dad croaks the kids have to sell the place and the plots are broken up into smaller but still economically viable units.

Instead what typically occurs is everyone wants a piece and they end up with plots which are so tiny that even if they know what they're doing and have everything they need there is still no way to make a living.

[Dinner]

Originally posted by techumseh
But don't discount Chavez. I'll wager that Petróleos de Venezuela will be in the forefront of those helping to develop Bolivia's oil and gas resources. Maybe Morales won't need US corporations after all.

You may be surprised but Citgo was founded as an American oil company and it was later bought by the Venezuelan government.

http://www.npr.org/templates/story/story.php?storyId=5065068

BTW Venezuela's output is in steep decline mainly because 1) Chavez has replaced trained technicrats with cronies and 2) His policies have resulted in a steep decline in foreign investiment. The nationalist chest thumping makes for good press but bad economics.