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? Read more
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. Read more
Argentina has been nationalising things again – this time, two rail cargo routes operated, since 1999, by a Brazilian company that is Latin America’s biggest independent logistics firm, América Latina Logística (ALL), and a tourist train, the Tren de la Costa. Read more
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. Read more
On the whole, the Hugo Chávez years went well for Polar, Venezuela’s biggest privately owned company, which did solid business despite all the president’s radical socialist rhetoric.
But with presidential elections due on Sunday, campaigning is always an especially sensitive time, with the food and drink giant last week becoming the object of particularly harsh criticism from Chávez’s successor Nicolás Maduro, a former bus driver who wants to ram it home to voters that he’s on the side of the workers, not their beastly capitalist employers. Read more
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? Read more
Hungary’s fast-expanding re-nationalisation programme, led by former anti-Communist activist Viktor Orban, on Thursday took a great leap forward.
MVM, the state electricity company and emerging energy combine, is to pay around €870m for full control of E.ON Földgáz Trade and E.ON Földgáz Storage, the Hungarian gas trading and storage companies currently owned by Germany’s E.ON. Read more
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. Read more
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. Read more
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. Read more
This week’s announcement that Zimbabwe will no longer evict owners from properties covered by international investment protection agreements has been derided as “locking the stable door after the horse has bolted” by John Worsley-Worswick, who heads Justice for Agriculture (JAG), an activist group. He has little faith in the pledge by Herbert Murewa, lands minister, to honour the terms of Bilateral Investment Promotion and Protection Agreements (BIPPAs) that Harare has signed with foreign governments. Read more
The tricky beast of nationalisation is on the agenda at the ANC’s Mangaung conference, where party members are meeting to elect leaders and discuss key decisions on critical policies.
A rejection of outright nationalisation has been set out, but analysts say that the looming alternative of higher taxation is a bitter a pill to swallow for investors and the country’s struggling mining industry. Read more
State-owned Rosneft buys TNK-BP Photo Bloomberg
Russia’s government did its best on Wednesday to affirm its continued commitment to privatisation plans, despite carrying out what is in effect the largest nationalisation in post-Soviet history this week.
Andrei Belousov, economy minister, insisted that the purchase of 100 per cent of oil company TNK-BP by state company Rosneft did not mean the government was rethinking its commitment to rolling back state ownership of the economy. Read more
So much for the photo finish. Hugo Chávez won Sunday’s presidential election with a 10-point lead, emerging strengthened from what was his (or his movement’s) 16th nationwide election.
Given the ample margin of victory, many Venezuelans are already worrying to what extent Chávez will radicalise his Bolivarian revolution, as he has promised – with all the negative implications for the economy that will bring. Read more
He believes capitalism has grown a little old. He believes that system is in decline. He believes nationalisations would not scare away foreign investors. He believes people would rush to buy his bonds. He believes he has the right alternative. Let beyondbrics introduce you Bolivia’s finance minister, Luis Arce Catacora (pictured).
“We are facing a structural crisis of capitalism. Capitalism is the old man around, an old man that is no longer responding to the advances of mankind demands. It is time for a change.” Read more
Tuesday’s meeting of YPF shareholders in Buenos Aires was most notable for its interminable length – more than six hours – and for decisions to ramp up investment and drastically cut the company’s dividend payout.
But investors will have to wait a bit longer to find out how the newly-nationalised oil company aims to revitalise its operations. Attempts to put questions about future plans were brushed aside. Read more
YPF, the Argentine oil company, has a new owner (the Argentine state); a new logo (complete with the Argentine flag) and, as the pro-government Tiempo Argentina newspaper put it, a new “dream team” of savvy professionals to run it.
So the big question now is: what is the new plan? Read more
By Luis Alberto Arce, finance minister of Bolivia
With a popular mandate to recuperate natural resources and strategic enterprises, the Bolivian government has since 2006 implemented a consistent policy of nationalisation of former state enterprises that were privatised in the early 1990s.
We have not nationalised, nor will we nationalise, genuine investments in the private sector, either domestic or foreign. Read more
What do you get if you freeze utilities tariffs for a decade? As Argentina is now discovering, the result is electricity companies – the big two are Edenor (controlled by Pampa Energia), and Edesur (controlled by Italy’s biggest utility company, Enel) – on the brink of collapse.
That has raised the question in many minds of whether, after the nationalisation of YPF the government now has the electricity sector in its sights. Read more
Is Bolivian president Evo Morales the poster boy for Latin America’s extreme left? Or for orthodox macroeconomic management?
Morales, a charismatic former coca union leader who swept to power in 2006 on promises to rebalance centuries of inequality, can do fiery rhetoric as well as his leftist allies Rafael Correa of Ecuador and Hugo Chavez of Venezuela. But just as Morales swapped his bobbly batwing jumpers for tailored suits with an indigenous fabric trim, has he taken a more conservative line when it comes to Bolivia’s bottom line?
Many economists would say yes. Read more