Bolivia gambles on energy and wins – for now

When President Evo Morales ordered Bolivia’s energy fields nationalized last May and sent federal troops into its abundant gas fields to make his point clear, critics warned that he would isolate Bolivia and choke off its main source of revenue.

But with Morales about to celebrate his first anniversary in office Jan. 22, most Bolivians regard the nationalization as a tremendous victory.

No foreign energy companies have left.
Bolivia has the second-largest natural gas reserves in Latin America, after Venezuela, and the region counts on Bolivian supplies to fuel its economies. Brazil and Argentina, the biggest of the bunch, are the most dependent on Bolivian gas.

Beyond that, Bolivia is seen as an economic test case. It is one of the poorest nations in the Americas, with more than 60 percent of its 9 million people living in poverty.

The opening of Bolivia’s economy in the 1990s by a series of presidents who succeeded military rule was supposed to alleviate that poverty. But the free-market policies and privatizations, which turned state energy assets over to Petrobras and other foreign giants, often for nothing but a promise to invest, failed to deliver prosperity.

So Morales and his Movement Toward Socialism are reversing the privatizations. The government is taking back energy assets, though at compensation levels the foreign investors complain are too low. And they are whipping up an economic mix of socialism and statism that, so far at least, still has a healthy helping of private enterprise.

Kansas City Star