Bolivia nationalizes natural gas industry

[Flubber]

Originally posted by VetLegion


...is nothing spectacular. Chinese have been insisting for years that auto factories and some other industries in China can only be partnerships in which Chinese companies, local authorities and whoever, have a 50% stake.

It is one matter to be told that you must partner with government ahead of time. You know the deal going in and accept or not.

But to wait for business to invest billions and then wait for an opportune moment and pounce . . . its just theft ..

[VetLegion]

It's not theft if they pay full compensation, which as far as we know they intend to do. Nationalizations are within power of sovereign governments.

However, sending in the soldiers made this look much more like an emotional thing than a move thought through.

[Vince278]

Just heard they are planning to do more nationalizing.

[VetLegion]

So did the Brits after WWII. They nationalized almost everything. It lasted until 1980s and Margaret Thatcher. Let's give Bolivians some time

[Kidlicious]

Originally posted by Flubber


Huh -- irrelevant-- whether the oil companies purchased an analysis or paid individuals to do the work, everyone understood that the company would own that analysis which coupled with ownership of underlying exploration rights, has and had value

Understanding and working are two different things.

[GePap]

During the last 25 years Latin American economies have grown only 13% total.

That is, form 1980 on, during which the movement in Latin America was generally from statist to capitalist economies, with varying degrees, growth has been pathetic and anemic.

No wonder that there is a general backlash against capitalist economics, since they seem to have failed utterly in the last 25 years in Latin America.

Here is a nice paper, with lots of graphs:

http://www.cepr.net/publications/latin_america_2003_11.htm

This post has been DanS'ed for my protection.

[Vince278]

Originally posted by GePap
No wonder that there is a general backlash against capitalist economics, since they seem to have failed utterly in the last 25 years in Latin America.

It would work better without all the corruption.

[GePap]

Corruption is a constant, always has been. The 60's and 50's were just as corrupt. Corruption by itself can't explain why liberal minded economic reforms have lead to such weak growth in Latin America.

[Kidlicious]

Economies that specialize in exporting raw materials do the worst in a capitalist system. (usually)

[Vince278]

Originally posted by GePap
Corruption is a constant, always has been. The 60's and 50's were just as corrupt. Corruption by itself can't explain why liberal minded economic reforms have lead to such weak growth in Latin America.

The rich are still getting richer and the poor are still getting poorer. Methinks that would weaken growth.

[Sikander]

Originally posted by Kidicious
Capitalism takes another hit.

Good thing Capitalism can afford the good sh!t.

[Sikander]

Originally posted by pchang
Reserves and extraction capability are not the same. It seems likely that Evo will use the money to subsidize government services and price controls in an attempt to improve the standard of living for the poor in Bolivia. Unfortunately, this will most likely lead to a steady decrease in the amount of natural gas that Bolivia will be able to extract which will lead to decreased subsidies for Bolivia's poor. Eventually, Bolivia's natural gas industry will need rebuilding and Bolivia's poor will be no better off than they are now (except for a temporary blip of good times). 20 years from now, I can see Evo being mourned as the only leader who actually cared about the people who was brought down by some multinational oil consipracy.

Price controls will help this scenario along by reducing the supply of food etc. as well.

[Sikander]

Originally posted by MOBIUS


You mean the Bolivian government is using their own tactics against them?

Damn, you should move there and join the illiterate throngs cheering this on. It suits you.

[Sikander]

Originally posted by VetLegion
By the way, the actual figure...

Companies have six months to negotiate new contracts with the Bolivian government. During that time, the Bolivian government says it will carry out audits of each company to determine how much it should pay for a stake of at least 51% in each.

...is nothing spectacular. Chinese have been insisting for years that auto factories and some other industries in China can only be partnerships in which Chinese companies, local authorities and whoever, have a 50% stake.

To put things in perspective, even governments of the developed world sometimes nationalize stuff. This is probably going to cause more upset among the libertarian members of various internet fora than in business and political circles who are used to this kind of thing in South America (Chile: copper, Venezuela: oil, Bolivia: gas...).

The difference is that in China the conditions of the deal are presented up front, while in (edit) Bolivia they changed the terms long after significant investments had already been made. It's theft.

[Sikander]

Originally posted by KrazyHorse

If you think that the development is even close to complete, you're insane.

He's insane either way actually.