Bolivia nationalizes natural gas industry

[notyoueither]

Originally posted by KrazyHorse

The last time we did that we got Mulroney.

Could have done worse and kept Turner.

[MOBIUS]

Originally posted by KrazyHorse


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

Actually I think you'll find if you read my posts that I don't think that at all.

Now that Bolivia has taken control it will be able to invest some of its revenues in future development. I don't see a problem because if the current operators don't like it, someone else will happily profit from the situation and jump into the breach - that's business.

From what I gather the companies will be compensated for their investments - it's just their future profits that will be hit, so they won't be losing money just not earning as much as they expected.

The main problem I see is whether outside influences decide to try and destabilise the Bolivian govt, like for example the US govt has tried to do with practically ever south american country in the past 50 years or so, for example.

Personally if it means one of the poorest countries in the world is able to take control of its resources and better help its people out of poverty, then I think it's a good thing.

Besides the President was democratically elected and is only carrying out the will of the people...

I really hope it works out, however I fear that powerful selfish interests will do everything in their power to prevent it.

[Last Conformist]

Unfortunately, the people is stupid.

Under the previous arrangement, the Bolivian state was basically making piles of cash just from letting the companies do their work. Now they're gonna take a much bigger slice of the actual running of operations, which, this being Bolivia, they're unlikely to do very well. Let's say I doubt this will increase net state income from the oil industry.

[MOBIUS]

Originally posted by Sikander


He's insane either way actually.

From you that's a compliment - especially when about all you've been able to contribute to this thread is bleating about it being 'theft'...

[MOBIUS]

Originally posted by Last Conformist
Unfortunately, the people is stupid.

Maybe they are, but that it democracy for you and why we've had such a great run of leaders lately like Bush, Blair, Howard and Berlusconi...!

We can't go round trying to ram democracy down everyone's throat and then complain when the 'wrong person' is voted into power...

Under the previous arrangement, the Bolivian state was basically making piles of cash just from letting the companies do their work. Now they're gonna take a much bigger slice of the actual running of operations, which, this being Bolivia, they're unlikely to do very well. Let's say I doubt this will increase net state income from the oil industry.

Well we shall see, won't we. At least this new president seems difference from the usual self-serving types that get elected into power, but maybe he will end up corrupt as well.

Anyway, he's got his mate Chavez to lend technical support...

[Sikander]

Originally posted by MOBIUS


Maybe they are, but that it democracy for you and why we've had such a great run of leaders lately like Bush, Blair, Howard and Berlusconi...!

We can't go round trying to ram democracy down everyone's throat and then complain when the 'wrong person' is voted into power...



Well we shall see, won't we. At least this new president seems difference from the usual self-serving types that get elected into power, but maybe he will end up corrupt as well.

Anyway, he's got his mate Chavez to lend technical support...

Yea, whenever I think of natural gas expertise in abundance I think of Venezuela.

As for democracy, yes it's democratic. But people who live in democracies have to learn that there are consequences for how they vote. In places like Bolivia or the Palestinian territories it appears that this concept has come as quite a shock. Not surprising really, considering their history.

[Last Conformist]

Originally posted by MOBIUS


Maybe they are, but that it democracy for you and why we've had such a great run of leaders lately like Bush, Blair, Howard and Berlusconi...!

We can't go round trying to ram democracy down everyone's throat and then complain when the 'wrong person' is voted into power...

I've not rammed democracy down anyone's throat, actually.

And just as it's the Bolivians' right to elect poor leaders, it's my right to complain about it.

[KrazyHorse]

Originally posted by MOBIUS
Now that Bolivia has taken control it will be able to invest some of its revenues in future development.

And that investment will be painfully slow compared to what development you would see given external capital.

[Flubber]

Originally posted by MOBIUS




Now that Bolivia has taken control it will be able to invest some of its revenues in future development. I don't see a problem because if the current operators don't like it, someone else will happily profit from the situation and jump into the breach - that's business.

Perhaps someone will but its far less likely during the current regime. There seems to be little point in doing deals with a government that just unilaterally breaks them whenever they feel like it- thats reality

Originally posted by MOBIUS


From what I gather the companies will be compensated for their investments - it's just their future profits that will be hit, so they won't be losing money just not earning as much as they expected.

I'll be very interested in what this "compensation" looks like. I suspect it won't look anything at all like fair market value and that the government would use something like historical cost. Bit I guess the fairest thing to do is wait and see.

Originally posted by MOBIUS

The main problem I see is whether outside influences decide to try and destabilise the Bolivian govt, like for example the US govt has tried to do with practically ever south american country in the past 50 years or so, for example.

That would be unfortunate and I would never advocate that. I WOULD advocate other countries "nationalizing " every Bolivian asset they can find within their borders including any cash the Bolivians are owed in any gas market . After all wouldn't taking that cash better the situation of the Brazilian, Spanish, French or USA people?? If its fair to break deals to "better your own people" doesn't that right extend to every country???

Originally posted by MOBIUS

Personally if it means one of the poorest countries in the world is able to take control of its resources and better help its people out of poverty, then I think it's a good thing.

I doubt it will work. Foreign investment will disappear since Bolivia has already threatened similar measures in other industries. (I at least admire their consistency), But basically Bolivia will be trying to run a number of industries on their own and some of them require a lot of technical experties which may not be present in the country. A part of me hopes they can make a success of it but I fear they will just crash in failure

[lord of the mark]

Originally posted by 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.

Lets see - most Latin American countries are resource exporters, and 1980 was around a peak in resource prices, preceding a collapse. Depending on the end date in the study, you would or wouldnt capture the resource recovery.

It would be interesting to compare countries, adjusting for degree of liberalization, etc.

But if the point is that liberalization is not a magic bullet, that overcomes all other obstacles to development, thats true.

[lord of the mark]

the report GePap cites makes mention of the claim that the 1980s problems (and it was decline in the 1980s that had the greatest impact on the 25 year growth) was due to unsustainable, debt financed, overexpansion in the 1970s and earlier. they dismiss that, I think not very persuasively.

They completely omit any discussion of the course of natural resource prices over the period.

If liberal wash consensus policies contributed to the slowdown, why did the slowdown begin before the those policies took effect? Why did a slow recovery (in the 1990s) begin AFTER those policies took effect?

heres a fuller discussion of Latin American economic growth in this period

http://www.eclac.cl/publicaciones/De...6i.pdf#search='latin%20american%20economic%20growth'


" The growth regimes of recent decades have in the background the large shocks of the 1970s, 1980s and 1990s and the early 21st century. In the 1970s, the region was able to "sort-out" the global shocks of the 1970s (the collapse of Bretton Woods exchange rate parities and the two oil-price shocks) through abundant and cheap external borrowing that proved to be temporary; then it came the debt crises of the 1980s followed by a period of slow and unstable growth and macroeconomic instability. In the early to mid 1990s the region adopted market-oriented policies and enjoyed a new cycle of easy external borrowing. In spite of a cyclical recovery and one-time efficiency gains, sustained growth proved again to be elusive."

After the Asian and Russian crises, Latin America has entered into a cycle of sluggish growth that has lasted more than half a decade. Thus, large external shocks, important changes in the global economy, and internal policy transformations have dominated the growth process of the last 30 or 40 years in Latin America. The 1980s and 1990s have been decades of instability and slow growth for most of the Latin American region. There are exceptions, however. Chile and the Dominican Republic grew rapidly in the last decade or so although in recent years both economies, for different reasons, have entered in cycles of more sluggish growth. "

[Colon™]

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060503:MTFH75283_2006-05-03_22-36-09_N03408649&symbol=PETR4.SA&rpc=44

Petrobas scraps the plans to expand the Bolivia-Brazil gas pipeline. Doesn't look like Bolivia will be making a decent living out of gas exports any time soon.

[Flubber]

Originally posted by Colon™

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060503:MTFH75283_2006-05-03_22-36-09_N03408649&symbol=PETR4.SA&rpc=44

Petrobas scraps the plans to expand the Bolivia-Brazil gas pipeline. Doesn't look like Bolivia will be making a decent living out of gas exports any time soon.

Totally predictable. Petrobras will try to protect their current investment but there is a fallout to all this. I'm just surprised it came so quickly.

I'm sure some will say that this is just a big country trying to push Bolivia around or someother hogwash

[Unspeakable Horror]

Originally posted by Colon™
It's also them who did the exploring. Without Big Bad Business, Bolivia wouldn't be having any reserves in the first place.
I recall that they were rather pissed about a scheme that would export the gas via Chile. Firstly, because it was Chile, and secondly because it would export their gas. How this helps the common man I do not understand.

Bolivia lost a war with Chile and as a result it also lost it´s access to the sea, thus they Hate Chile, a lot. Especially the common man.

[chequita guevara]

You might want to consider that this is the first popular government Bolivia has had since 1964, all the intervening governments being either military dictatorships or minority representation (based on keeping the Indians out of politics). If you make deals with a dictator or a minority government, you have no right to squeel when the people expropriate your ill-gotten gains.