Bolivia, a key supplier of gas to the southern half of Latin America, is facing potentially harder times as falling international oil prices are piling downward pressure onto the price at which it sells its gas.
However, Carlos Villegas, the president of the state-run energy company, YPFB, is confident that if oil prices continue to hover around their current levels of $82 a barrel, Bolivia can avoid having to cut the prices of its exported natural gas.
“For Bolivia if the oil price lies in the range of between $80 and $100, the prices for [gas] exports will remain at their current level,” says Villegas
Bolivian minister of rural development Carlos Romero (L), Bolivian Vice-President Alvaro Garcia Linera, Bolivian President Evo Morales, and Bolivian Minister of Finance Luis Arce
Bolivia’s president, Evo Morales – along with his deputy Alvaro García Linera, a suave Marxist mathematician – seems to be sailing towards his third presidential victory in Sunday’s election, thanks to a self-styled socialist agenda, popular among impoverished Bolivians.
Despite the government’s sometimes fiery anti-capitalist rhetoric, Morales has managed to triple the size of the Andean country’s economy, which is forecast to grow at South America’s fastest clip this year.
In the country’s capital, La Paz, Warwick-educated finance minister Luis Arce explained to beyondbrics the Bolivian model behind the economy’s success:
Is Bolivia ready to improve its image among foreign direct investors? A settlement with one claimant and an order to pay another at the end of last week suggest now would be a good time to do so – especially as the country tries to diversify away from its reliance on commodity exports and as President Evo Morales (pictured) prepares to seek re-election for a third term in October.
Once the first indigenous president of an impoverished country with an Indian majority has established his authority, tripled the size of the economy and is poised to win a third mandate, what else is there to do?
Sign up as a midfielder for a professional club for next season.
That is what Bolivia’s President Evo Morales recently did with Sport Boys, a team based in Warnes, outside the eastern city of Santa Cruz, once a bitter hardline opposition stronghold to his government.
In the last week an international court ordered Bolivia to pay $41m in compensation to UK-based power generator Rurelec for the nationalisation of its assets. After a stream of seizures in recent years, the move could set a precedent for other companies waiting for reparations from the Andean country’s leftwing government.
However, to some observers there is a big question looming: will Bolivia actually pay up? And if so, when?
Bolivia, often labelled as one of South America’s poorest countries, might pull a surprise in 2o13: the IMF expects this landlocked Andean country to grow by 6.7 per cent – its highest rate in ten years.
Despite the fierce anti-capitalist rhetoric and nationalisation policy of President Evo Morales (pictured), Bolivia’s gross domestic product has tripled to $27bn since he took office in January 2006, and economic growth has been chalking up an impressive 5 per cent average. As a consequence, the financial sector has also grown substantially. Any worries?
Critics of Evo Morales, Bolivia’s leftwing president, say his enthusiasm for nationalisation is such that there will soon be no companies left to nationalise. But if Morales has been indiscriminate in bringing the private sector under the state’s wing since he took office in 2006, he has at least been getting selective recently over which former owners to compensate for taking their companies off their hands.
By Eric Farnsworth of the Council of the Americas, Washington
Bolivia is the poorest nation in South America. Along with Haiti and Nicaragua, it is one of the poorest in all of the western hemisphere. So what’s President Evo Morales’ latest strategy to improve social indicators? Expel USAID, the US government aid agency that spent some $28m last year promoting healthcare among poor Bolivians and working to protect the environment.
Spain’s economic crisis is writ large in the Inter-American Development Bank’s latest statistics on remittance flows to Latin America.
For years, thousands of Bolivians, Ecuadoreans and Colombians have been among those to seek work in Spain, legally or illegally. Whether young educated professionals, or poor maids, cleaners and construction labourers, these workers could see the advantages of saving Euros that would magically multiply back home into pesos or dollars or bolivianos.
Can I nationalise you?
For a country with a fondness for nationalisations and getting its way, going to full arbitration might feel a little, well, odd. Bolivia has been placing companies under state control on and off since May 2006.
So how did UK-based power company Rurelec manage to get Bolivia to go to the Permanent Court of Arbitration in The Hague over the nationalisation of the assets of its local subsidiary, Guaracachi, almost three years ago?
Evo Morales strikes again. On Monday, Bolivia’s president nationalised the operations of the country’s three largest airports – taking over the local unit of Barcelona-based Abertis Infrastructuras SA and AENA, Spain’s airport authority.
The seizure of the airport operations in La Paz, Santa Cruz and Cochabamba is Morales’ third expropriation in 10 months. In December, his government seized two electricity distribution companies owned by Spain’s Iberdrola. Six months earlier on May Day, it nationalised the assets of Spain’s Red Eléctrica.
Trying to carve out a Bolivian mining industry purely on his own terms is proving tricky for Bolivia’s leftwing President Evo Morales.
Recently, he was forced to give out some disappointing numbers about the performance of the Colquiri mine, which the government took over from London-listed commodities giant Glencore in June of last year, during a dispute between rival mining unions.
It looks like another tough battle is in store for one more foreign utility owner fighting back against Bolivian nationalisation.
Red Eléctrica, the Spanish power grid operator, is to seek arbitration at ICSID, the World Bank’s investment dispute settlement agency, after Bolivian troops marched in to take over Transportadora de Electricidad, which handles about three quarters of electricity transmission in the Andrean country, in May last year.