Tuesday, May 02, 2006

Bolivia nationalizes gas resources

On Monday the Bolivian government sent out a decree to nationalise the country's big gas fields. This has been regretted by some. The Spanish foreign ministry released a statement on Tuesday expressing "deep concern about the measure and the possible consequences for bilateral relations. This concern also extends to the ways this measure was adopted".

The Bolivian measure is understandable, however, in light of the enormous profits the foreign mining companies have been enjoying in Bolivia, which is one of the poorest of Latin American countries. It has perhaps heightened tensions that Bolivia sent out troops to seize the gas fields. The operation of the fields is not affected. And the foreign companies, among them Petrobras from Brazil, probably find out how to adapt to the new situation. The Bolivian government will take a controlling stake in the companies, and force through a larger part of the profits to the state purse.

Larger incomes from the exploitation of the natural resources will help the country to promote development if the money is wisely spent on development projects and promotion of the country's own technologies.


Blogger Sophia said...

The Venezuelian model is on the march in latin America. If there is one place where you can see neoliberalism defeated it is Latin America. The task will be however long and difficult.

3:51 AM  
Blogger Cosmic Duck said...

It takes some courage and initiative to start doing without the multinationals. But it is worth the while.

4:50 AM  

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