Bolivia Moves to Nationalize Gas Industry

[amicus]

http://news.yahoo.com/s/ap/20060502/ap_on_re_la_am_ca/bolivia_gas

Bolivia Moves to Nationalize Gas Industry

"By ALVARO ZUAZO, Associated Press Writer 4 minutes ago
“…LA PAZ, Bolivia - President Evo Morales issued a decree nationalizing Bolivia's vast natural gas industry Monday, sending soldiers to occupy gas fields and threatening to evict foreign companies unless they give the Andean nation control over the entire chain of production.
The move fulfills an election promise by the leftist president, who has forged close ties with Cuba's

Fidel Castro and Venezuela' Hugo Chavez, to increase state control over Bolivia's natural resources, which he says have been "looted" by foreign companies.
Morales sent soldiers and engineers with Bolivia's state-owned oil company to installations and fields tapped by foreign companies — including Britain's BG Group PLC and BP PLC, Brazil's Petroleo Brasileiro SA, Spanish-Argentine Repsol YPF SA, France's Total SA and Texas-based Exxon Mobil Corp. The companies have six months to agree to new contracts or leave Bolivia, he said…”(article continues)
~~~~~~~~~~~~~~

While all my socialist acquaintances on this forum will jump with glee that another aspect of the free market has been choked out, this does not bode well for the people of Bolivia, South America and the world in general.

Private property and rights confiscated by government by force, cease operating on a ‘profit motive’ and soon become taken over by greed and corruption. Production falls, innovation stops and the technical expertise just to keep a company functioning will melt away to other places where free enterprise welcomes talent and individuality.

There is no doubt this will have an impact on the world gas and oil markets, but the extent of the impact is difficult to predict.

It should, at the very least, compel those who consider such things, to place a greater urgency on Americans to move quickly towards energy independence by utilizing all resources within the boundaries of the United States.

High energy prices are here to stay and must be seen as a factor of life and doing business. The longer exploration and construction of wells, pipelines and refineries is delayed, the higher the price will climb and people and the economy will suffer.

Amicus…

 

[TheEarl]

What's their rationale for nationalising it? Is there any kind of sane reason, or is it just "because we want to"?

The Earl

 

[amicus]

[QUOTE=TheEarl]What's their rationale for nationalising it? Is there any kind of sane reason, or is it just "because we want to"?

The Earl...

~~~~~~~~

From what I gathered from the article, they want a larger share of the profits from the foreign companies and just decided to use force and take it all.

Secondly, one of the basic tenets of Marxism or Communism, is that the 'State', owns the means of production, all land and all resources.

Additionally, I imagine they hate 'Capitalism' and the free market concept in general.

Quite like those clamoring for a 'windfall profits tax' on American oil companies, they have a deep seated belief that 'tinkering' with the free market can improve its performance and equalize wealth.

Ayn Rand in her novel Atlas Shrugged gives an interesting perspective through her creation of the '20th Century motor company', (If I recall correctly, been a ton of years since I last read it), and by the 'D'Anconia copper mines that were nationalized by Mexico in her novel.

The '20th century motor company' an in depth study of how economic socialism is doomed to failure, is perhaps the best fictional presentation I have ever read.

And of course the Taggart Railroad system as government began to nationalize transportation in the United States, in the novel, is another excellent course study on the failure of the command market concept.

I suppose that is partly why Rand is hated so much among leftists, she presents the ideas in such a manner that it is almost impossible to refute her assertions.

And, of course, she links a free market system to human ethics and morality in ways that also cannot be challenged.

Sorry, I went on a bit. In the final throes of packing and about to disconnect and pack this beast away and I am feeling a bit on edge as the journey nears.

Best of all to you...


amicus...

 

[TheEarl]

I wouldn't've thought 'hate' would come into it. Even in a extreme left-wing country, people still operate on simple profit motive, ie. "What's best for me?"

Agreed with you on it being an exceedingly dumb idea. There are a couple of circumstances where nationalisation is a good idea and will actually improve the industry. "Wanting the money ourselves" is not one of them.

The Earl

 

[SEVERUSMAX]

Well, it fits with Morales and his socialist leanings. I'm not shocked at all.

 

[R. Richard]

What's their rationale for nationalising it? Is there any kind of sane reason, or is it just "because we want to"?

The Earl

Greed! The irony of it is that the Bolivians realize that they can't run their natural gas fields, they just don't have the expertise. Thus, they must try to keep the companies with the expertise around in order to keep the fields productive.

What is really insane is that oil or gas fields have to be worked on a day by day basis or real problems occur. Thus, if the Bolivians want continuing benefits from their natural gas fields, they can't just shut them down until they figure out how to run them.

Morales should go back to herding llamas.

JMNTHO.

 

[Couture]

http://news.yahoo.com/s/ap/20060502/ap_on_re_la_am_ca/bolivia_gas

Bolivia Moves to Nationalize Gas Industry

"By ALVARO ZUAZO, Associated Press Writer 4 minutes ago
“…LA PAZ, Bolivia - President Evo Morales issued a decree nationalizing Bolivia's vast natural gas industry Monday, sending soldiers to occupy gas fields and threatening to evict foreign companies unless they give the Andean nation control over the entire chain of production.
The move fulfills an election promise by the leftist president, who has forged close ties with Cuba's

Fidel Castro and Venezuela' Hugo Chavez, to increase state control over Bolivia's natural resources, which he says have been "looted" by foreign companies.
Morales sent soldiers and engineers with Bolivia's state-owned oil company to installations and fields tapped by foreign companies — including Britain's BG Group PLC and BP PLC, Brazil's Petroleo Brasileiro SA, Spanish-Argentine Repsol YPF SA, France's Total SA and Texas-based Exxon Mobil Corp. The companies have six months to agree to new contracts or leave Bolivia, he said…”(article continues)
~~~~~~~~~~~~~~

While all my socialist acquaintances on this forum will jump with glee that another aspect of the free market has been choked out, this does not bode well for the people of Bolivia, South America and the world in general.

Private property and rights confiscated by government by force, cease operating on a ‘profit motive’ and soon become taken over by greed and corruption. Production falls, innovation stops and the technical expertise just to keep a company functioning will melt away to other places where free enterprise welcomes talent and individuality.

There is no doubt this will have an impact on the world gas and oil markets, but the extent of the impact is difficult to predict.

It should, at the very least, compel those who consider such things, to place a greater urgency on Americans to move quickly towards energy independence by utilizing all resources within the boundaries of the United States.

High energy prices are here to stay and must be seen as a factor of life and doing business. The longer exploration and construction of wells, pipelines and refineries is delayed, the higher the price will climb and people and the economy will suffer.

Amicus…

Well, the Bolivian government was elected by the people, so they have a mandate to confiscate this property for the citizens of their country if that is their wish. The oil companies may not like it very much, but the oil does belong to the people of Bolivia.

I was also under the impression that the US government owned rights to the oil found in the US.

I think we are going to be seeing much more of this happening, as the world begins to wake up to the fact that oil is a limited resource. It is actually better than black gold. Gold just sits there. Oil can drive you across town and let you plant crops to feed your population. Oil can fly your jets or tanks. IMO, I think it is an act of treason to sell oil to another country period.

Not that I'm advocating that of course.

 

[Roxanne Appleby]

Meanwhile, back in the U.S., politicians from both parties expressed support for legislation to mandate lower profits for companies that explore for oil buried thousands of feet under the ground or ocean, drill for it often under extremely harsh conditions, refine it into gasoline and deisel fuel, and distribute it to retail outlets for sale to consumers. Questions regarding how this would increase fuel supplies (and so lower prices) were sneered at.

In other news, Michigan Gov. Jennifer Granholm joined other politicians in calling for the measure described above. She continued the call despite a report that the state's public employee and teacher pension funds owned more than 13 million shares of oil company's stock with a market value of more than $846 million, boosting the funds value by more than $79 million this year. Granholm joined many national political leaders in snarling at those who point these facts out, and snapping at their ankles.

 

[Munachi]

well, as couture said, he was elected by his people. and actually, promising to do this was part of what got him elected. so not doing it would have been quite undemocratic, wouldn't it?

i am not yet sure if i agree with evo morales or not, and i have too much of a headache to really think right now, but from my impression contrary to many other politicians in the region before him (who were more interested in what served their personal interests best), he is trying to improve the situation of bolivia - if with success or without time will show. having the gas industry owned privately, and largely by foreign companies quite obviously didn't help most people in the country a lot, bolivia afaik is the poorest country in south america.

Morales should go back to herding llamas.

actually, afaik he was a cocalero. well okay, he was born in the high lands, so maybe as a kid he did herd llamas. then again, i never got the impression they need a lot of herding.

 

[R. Richard]

Well, the Bolivian government was elected by the people, so they have a mandate to confiscate this property for the citizens of their country if that is their wish. The oil companies may not like it very much, but the oil does belong to the people of Bolivia.

The same Bolivian government signed contracts with foreign firms. The contracts allowed said foreign firms to come into Bolivia and spend said foreign firm's money to search for natural gas, drill for natural gas, process said naturla gas and pipe it to users. All of the above costs money, lots of money and requires specialized skills. Bolivia had all of the above, except for money and specialized skills.

I was also under the impression that the US government owned rights to the oil found in the US.

Each country owns rights to the mineral wealth found under said country's land and offshore to the 200 mile limit. HOWEVER, said rights may be sold. When said rights are sold, they belong to the purchaser and/or the purchaser's assignees.

I think we are going to be seeing much more of this happening, as the world begins to wake up to the fact that oil is a limited resource. It is actually better than black gold. Gold just sits there. Oil can drive you across town and let you plant crops to feed your population. Oil can fly your jets or tanks. IMO, I think it is an act of treason to sell oil to another country period.

It is not clear that oil is really a limited resource. There is a respected group of petroleum geologists who think that oil is created within the earth, by natural processes and may be a renewable resource to at least some extent.

Finding oil/natural gas is a complex, expensive task. Most third world countries [and quite a few first world countries] do not have the required skills to find oil/natural gas. Drilling for oil/natural gas is a complex, expensive task. Most third world countries [and quite a few first world countries] do not have the required skills to drill for oil/natural gas. Maintaining fields of oil/natural gas is a complex, expensive task. Most third world countries [and quite a few first world countries] do not have the required skills to maintain fields of oil/natural gas. If fields of oil/natural gas are not properly maintained, chaos results. Transporting oil/natural gas is a complex, expensive task. Most third world countries [and quite a few first world countries] do not have the required skills to transport oil/natural gas.

Global petroleum companies traditionally operate under a profit margin of about 8%. The expenses of a national government to find, drill, maintain fields and transport petroleuom products will run many times 8% and that for a lot less petroleum product delivered to the customer.

Nationalizing the natural resouces of a country is a wonderful political idea, if you are a politician in a third world country. You can make wonderful speeches to the peasants about selling said resources for the benefit of "The People." "The People," means "the politicians" here.

 

[Roxanne Appleby]

well, as couture said, he was elected by his people. and actually, promising to do this was part of what got him elected. so not doing it would have been quite undemocratic, wouldn't it?

Hitler was elected on a platform that included persecution of ethnic and religious minorities. I suppose it would have been undemocratic not to honor that platform.

Perhaps democracy is not a value in itself. I can be, but is not necessarily, a means to a an worthy end, which is liberty.

 

[SEVERUSMAX]

Hitler was elected on a platform that included persecution of ethnic and religious minorities. I suppose it would have been undemocratic not to honor that platform.

Perhaps democracy is not a value in itself. I can be, but is not necessarily, a means to a an worthy end, which is liberty.

I couldn't have said it better myself. Or at least without being too verbose. You're better at being succinct. My sentiments exactly.

 

[Munachi]

Hitler was elected on a platform that included persecution of ethnic and religious minorities. I suppose it would have been undemocratic not to honor that platform.

Perhaps democracy is not a value in itself. I can be, but is not necessarily, a means to a an worthy end, which is liberty.

yes. you are right.

but, what is the value then? what is liberty? i am not a communist - but what rosa luxemburg said "freiheit ist die freiheit des andersdenkenden" - "freedom is the freedom of him who thinks different to you/us/whatever" has something to it. but even there, it is hard to define.

the thing is, there is no perfect system. i doubt there will ever be one, i don't believe in any utopias either. so in the end, democracy is the one we are currently seeing as what seems to work for us, and we have to go with that, and it's flaws - and in fact, we also might have to accept that not everywhere wants democracy and sees it as the best system.

but what does that bring us to? the problem with this argument is, that you can pretty much use it whenever you want. so whenever the people elect someone you don't like, you point out this thing. and then at other times not. the problem then is, who is the measure, who decides when democracy, or what the people say, or whatever, is right and working and when not?

apart from that, comparing hitler and morales is not only harsh, but i see no real grounds for it.

 

[Munachi]

apart from that - i don't know where i stand in what concerns morales. i don't know enough about him, his politics, economy, politics in general, etc. etc. all i can say is that we have to see.

but some more points/thoughts:

actually, i was wrong in part in what i said yesterday - actually, in the last decades bolivia had phases of nationalization, and phases of privatization. neither so far brought big improvements to its people.

but, from all i understand so far, morales knows quite well, that bolivia does not have the means to work the gas industry itself. i think (or i read, and it seems plausible to me) there are two reasons for his moves: he has to show some successes to his people. bolivia is a country with a lot of protests, in recent years people have been quick to strike, and it wasn't uncommon for presidents to get kicked out of their office very quickly, either. so in part it might be more of a show off to the public than something that really has to do with what is happening behind the scenes. what i think he wants to do is renegotiate contracts. the contracts so far have been very unfavorable to bolivia, not only financially, there has also been little rules for example in what concerns protection of the environment, etc.

there is some danger in all of this of course, if the companies leave, bolivia is in more problems. and not all people are in favor of morales, and particularly the regions where i think a lot of the gas reserves are, do want a higher autonomy status. some people i know who live there say, the next months will be quite decisive, there could either really be improvement, or chaos. well, one will have to see.

of course one thing with the wanting to renegotiate contracts and all is, that it reminds a bit of how the war of the pacific started, which was quite desastrous for bolivia... so i really hope it won't be like that.

thing is, that i just disagree that the market regulates itself in a way that in the end makes it fair for even the poorest people. it's just not what i see in the world. and it's not a risk i see as worth taking to try if it might happen, at some point. i don't know how many really poor people, for example in that region of the world, you know personally, and have seen their life, and the conditions their children grow up in... the one thing i know is that something there has to change. but, as i said in the beginning, i don't know enough about all the different aspects of this topic (in fact i know hardly anything about it at all) to know what, really, would be the best way to change it.

 

[Munachi]

Morales should go back to herding llamas.

JMNTHO.

sorry, i have to get back to that phrase. it doesn't go out of my head.

now, you will probably tell me i am over-interpreting, and you didn't mean it all that serious - but i think it is important to be aware of what we are saying even if we aren't concious of that we are saying this.

let's not talk right now about whether we agree with Morales' politiics or not. he is, contrary to most presidents Bolivia has had so far, quite representative of the Bolivian people, being from an indigenous background (in his case Aymara, i don't know in how far he is indígena or mestizo, and these definitions are difficult anyway, ethnicity is not something that can be always clearly and objectively defined), and from a poor farmer background. from what i read he only did a few years of school because his family couldn't afford to send him to school longer.

now, for someone from such a background to become president (and not like, for example, ceausescu back in 1965 in romania because he was appointed so by the dictator before him, but by an election, having gone up step by step in politics) seems to me an indication that whatever he is, he is not stupid.

the funny sounding remark "he should go back to herding llamas" to me has a sound of a certain ethnocentrism in it. you are making up a cliché you imagine for andean indígenas and putting him there, indicating he has no place in politics, he is not up to that, etc. etc.

i am not sure how much you really had evo morales' ethnic and socio-economic background in mind, but it is part of a strategy both morales himself and those who are against him engage him, that i find somewhat dangerous. i remember, after his election, how newspaper articles would talk more about the fact that he wears sweaters instead of suits... something morales himself seems to use to show himself as a "man of the people", and something those against him use to "prove" that he is "not even a real politician"... this is, of course, distracting from the real issues, and is also a type of discrimination, in my opinion, to somehow say that only people that fit a certain stereotype are "real" politicians and can be presidents...

as i said, i am pretty sure you will say your remark was not meant that way, and i believe you. but it might still reflect a subconcious thinking of, he should go back to being poor. he was born poor, and he can obviously not mix into politics, because that is a game of the rich.

 

[Roxanne Appleby]

yes. you are right.

but, what is the value then? what is liberty? i am not a communist - but what rosa luxemburg said "freiheit ist die freiheit des andersdenkenden" - "freedom is the freedom of him who thinks different to you/us/whatever" has something to it. but even there, it is hard to define.

the thing is, there is no perfect system. i doubt there will ever be one, i don't believe in any utopias either. so in the end, democracy is the one we are currently seeing as what seems to work for us, and we have to go with that, and it's flaws - and in fact, we also might have to accept that not everywhere wants democracy and sees it as the best system.

but what does that bring us to? the problem with this argument is, that you can pretty much use it whenever you want. so whenever the people elect someone you don't like, you point out this thing. and then at other times not. the problem then is, who is the measure, who decides when democracy, or what the people say, or whatever, is right and working and when not?

apart from that, comparing hitler and morales is not only harsh, but i see no real grounds for it.

The rule of law and limited government are real values, because it has been well demonstrated that humans thrive best where both are present. Creating conditions in which humans can thrive is the real value. To the extent democracy serves that end, it is a useful tool. That's all it is, though - a tool - which can be used for good or ill: "Two wolves and a sheep vote what to have for dinner."

For all the anti-Americanism that is rife on this forum there has never been a place where more people enjoyed more freedom and greater prosperity than the United States. Humans can thrive in the United States, no matter who they are or who their parents were. Go ahead and sneer or snarl, AHers - your hostility does not make it any less true. That makes the U.S. a pretty good model.

Bolivia is just the opposite. No rule of law is possibly the main reason it's the poorest nation in South America, and this kind of action is a symptom of that.

 

[SEVERUSMAX]

The rule of law and limited government are real values, because it has been well demonstrated that humans thrive best where both are present. Creating conditions in which humans can thrive is the real value. To the extent democracy serves that end, it is a useful tool. That's all it is, though - a tool - which can be used for good or ill: "Two wolves and a sheep vote what to have for dinner."

For all the anti-Americanism that is rife on this forum there has never been a place where more people enjoyed more freedom and greater prosperity than the United States. Humans can thrive in the United States, no matter who they are or who their parents were. Go ahead and sneer or snarl, AHers - your hostility does not make it any less true. That makes the U.S. a pretty good model.

Bolivia is just the opposite. No rule of law is possibly the main reason it's the poorest nation in South America, and this kind of action is a symptom of that.

I generally agree. Though I don't think of most people here as anti-American, however much some of their rhetoric may go overboard at times. The right to private property is generally a right to be respected, just as much as free speech, freedom of worship, etc. There are exceptions, IMO, but this is not a good one.

 

[Pure]

it's funny how you don't hear zeb or ami talking about how the house of saud grabbed up the arabian companies.

norway nationalized its oil and there are, contrary to ami and rox's predictions, no slave labor camps.

it is a matter for empirical investigation, not idealogized ranting to decide who should own what.

just to put a few facts on the table, see below. Bolivia is a supplier of raw materials through mining: silver, zinc, antimony, lead, cadmium, tungsten, gold, and tin. There have been collectivization efforts as well as private enterprise, but in considering, why is B poor, it's pretty obvious that supplying mining ore does not usually work for a country's development.

http://countrystudies.us/bolivia/62.htm
MINING

Bolivia Table of Contents

From 1557 to 1985, the mining industry dominated the Bolivian economy. By 1985, however, the production of every significant mineral in the country had failed to exceed the output registered in 1975. Moreover, the international tin market crashed in 1985. The mining sector in 1987 accounted for only 4 percent of GDP, 36 percent of exports, 2.5 percent of government revenues, and 2 percent of the labor force, compared with 8 percent of GDP, 65 percent of exports, 27 percent of government revenues, and about 6 percent of the labor force in 1977.

Spurred by a massive increase in gold production, however, the mining sector rebounded in 1988, returning to the top of the nation's list of foreign exchange earners.

Structure of the Mining Industry

Comibol, created in 1952 and decentralzied into five semiautonomous mining enterprises in 1986, was a huge multimineral corporation controlled by organized labor and the second largest tin enterprise in the world. In addition to operating twenty-one mining companies, several spare-parts factories, various electricity plants, farms, a railroad, and other agencies,

Comibol also provided schooling for over 60,000 children, housing for mining families, health clinics, and popular subsidized commissaries called pulper�. By 1986 Comibol employed more nonminers than miners. Observers severely criticized Comibol's mining policies. Comibol took fifteen years to bring tin production to its prerevolutionary levels. In addition, Comibol failed to invest sufficiently in mining technology and existing mines, and it proved unable to open new mines.

Indeed, except for the mid-1960s Comibol did not engage in exploration. In terms of administration, worker control eclipsed even technical and detailed administrative decisions. The decentralization of Comibol under the Rehabilitation Plan reduced the company's payroll from 27,000 employees to under 7,000 in less than a year. All of Comibol's mines, previously responsible for the bulk of mining output, were shut down from September 1986 to May 1987 to examine the economic feasibility of each mine; some never reopened.

Comibol's mining and service companies were restructured into five autonomous mining subsidiaries (in Oruro, La Paz, Quechusa, Potos�and Oriente) and two autonomous smelting companies (the Vinto Smelting Company and the still unopened Karachipampa smelter in Potos� or they were transferred to ministries such as the Ministry of Social Services and Public Health or the Ministry of Education and Culture. The bureaucracy also underwent major administrative changes.

For the first time since 1952, the country's medium miners, small miners, cooperatives, and other producers, which made up the rest of the mining sector, produced more minerals in 1987 than Comibol. The medium miners consisted of Bolivian and foreign mining companies in the private sector that were involved in the production of virtually every mineral, especially silver, zinc, antimony, lead, cadmium, tungsten, gold, and tin.

Nevertheless, the collapse of tin and the decline in other commodity prices in the mid-1980s also severely affected the private mining sector. Nineteen mining companies with 4,020 employees constituted the Medium Miners Association (Asociacie Miner� Mediana) in 1987, compared with twenty-eight companies and 8,000 workers in 1985. Only 615 mines in 1987 were part of the National Chamber of Mining (C᭡ra Nacional de Miner�, the equivalent of a small miners association, compared with 6,300 mines and 23,000 workers before the crash.

Traditionally, small miners had to market their mining output through the Mining Bank of Bolivia (Bancco Minera de Bolivia -- Banin), which was also restructured after 1985 into a joint venture of private and public interests. Beginning in 1987, small miners no longer had to sell their exports through Bamin, a policy shift that boosted that group's output and foreign sales. Mining cooperatives and other miscellaneous miners made up the rest of the producers in the mining sector, although their output was aggregated with that of the small mining sector.

The National Federation of Mining Cooperatives of Bolivia (Federaciacional de Cooperativas Mineras de Bolivia) served as an umbrella organization for the country's 434 mining cooperatives, 82 percent of which mined gold. Only a few of these groups, however, were officially registered with the National Institute of Cooperatives (Instituto Nacional para Cooperativas). Most cooperatives were small and consisted of individual miners organized by mine or specific mineral and using very little technology.

Tin and Related Metals

Bolivia's mines had produced cassiterite, the chief source of tin, since 1861. Although long among the world's leading tin producers and exporters, the industry faced numerous and complicated structural problems by the early 1980s: the highestcost underground mines and smelters in the world; inaccessibility of the ores because of high altitudes and poor infrastructure; narrow, deep veins found in hard rock; complex tin ores that had to be specially processed to extract tin, antimony, lead, and other ores; depletion of high-grade ores; almost continual labor unrest; deplorable conditions for miners; extensive mineral theft or juqueo; poor macroeconomic conditions; lack of foreign exchange for needed imports; unclear mining policies; few export incentives; and decreasing international demand for tin.

Between 1978 and 1985, Bolivia fell from the second to the fifth position among tin producers. In the late 1980s, however, tin still accounted for a third of all Bolivian mineral exports because of the strong performance by the medium and small mining sectors. The largest tin-mining company in the private sector was Estalsa Boliviana, which dredged alluvial tin deposits in the Antequera River in northeastern Potos�epartment.

The Mining Company of Oruro operated the country's richest tin mine at Huanuni. The country's tin reserves in 1988 were estimated at 453,700 tons, of which 250,000 tons were found in medium-sized mines, 143,700 tons in Comibol mines, and 60,000 tons in small mines. In the late 1980s, tin was exported mainly in concentrates for refining abroad. Eighty percent of all exports went to the European Economic Community and the United States, with the balance going to various Latin American countries and Czechoslovakia.

Bolivia was a founding member of the International Tin Council (ITC), a body of twenty-two consumer and producer countries that since 1930 had attempted to regulate tin markets through buffer stocks. Bolivia, however, did not sign the ITC's International Tin Agreements in the 1970s and 1980s. In 1983 Bolivia joined the newly formed Association of Tin Producing Countries, which attempted--unsuccessfully--to control tin prices through a cartel approach to commodity regulation.

After a period of decline, tin prices rebounded in the late 1980s. Government policies since the early 1970s had sought to expand the percentage of metallic or refined tin exports that offered greater returns. As a result, smelting increased during the 1970s, but in the 1980s the excessive costs of the nation's highly underutilized smelting operations contributed to the decision to restructure Comibol. Silver, zinc, lead, bismuth, and other minerals were all found with Bolivia's large tin reserves and, like tin, were considered strategic minerals. Because of the common mixture of ores, tin mining frequently encompassed the mining of other minerals as well. With the collapse of tin, the government was increasingly interested in exploiting its large reserves of other minerals, particularly silver and zinc.

Three centuries after being the world's largest producer of silver, Bolivia still produced 225 tons of silver in 1988, as compared with about 140 tons in 1987. Zinc reserves were large, 530,000 tons, and the expansion of zinc production enjoyed growing government support. Zinc output also rose in the late 1980s from roughly 39,000 tons in 1987 to over 53,000 tons in 1988, compared with 47,000 tons in 1975.

Nearly all zinc was exported. In 1987 the government declared the construction of a new zinc refinery in Potos� national priority. Although the authorities considered lead a minor metal, production increased from 9,000 tons in 1987 to 11,000 tons in 1988. Bismuth reserves were estimated at 4,100 tons, and production in 1987 reached two-thirds of a ton entirely by small miners.

Bolivia, the site of the International Bismuth Institute, was once the sole producer of bismuth in the world. The lead and silver Karachipampa facility in Potos�as the nation's largest smelter. Completed in 1984, Karachipampa employed Soviet technology but was constructed by a Federal Republic of Germany (West Germany) company. The smelter's gross capacity was an enormous 51,000 tons a year. Widely criticized for its overcapacity, the plant was not scheduled to open until 1992 at the earliest because of insufficient ore.

Bolivia mined about a fifth of the world's antimony in the late 1980s and was the leading producer among market economies. Private companies were responsible for all antimony production. The largest output came from the United Mining Company (Empresa Minera Unificada), which controlled the two largest antimony mines, located at Chilcobija and Caracota, both in Potos�epartment. Medium and small miners generated an average of 9,500 tons of antimony a year in the mid-to late-1980s, all of which was exported. Antimony, a strategic mineral used in flameproofing compounds and semiconductors, was exported in concentrates, trioxides, and alloys to all regions of the world, with most sales going to Britain and Brazil. Antimony reserves in 1988 stood at 350,000 tons.

Bolivia was also the leading producer of tungsten among market economies. But the dramatic decline in tungsten prices in the 1980s severely hurt production, despite the fact that reserves stood at 60,000 tons. Medium and small producers accounted for over 80 percent of the country's tungsten production in the late 1980s. The International Mining Company's Chojilla mine was the source of most tungsten output. Tungsten production sank from 2,300 tons in 1984 to barely more than 800 tons in 1987 because of falling international prices. Tungsten was sold to West European, East European, and Latin American countries, as well as to the United States.

Other Metals and Minerals

Gold prospecting in the country's rivers and mines was brisk in the late 1980s. Because of Bolivia's vast territory and the high value of gold, contraband gold accounted for approximately 80 percent of exports. Official gold exports were approximately five tons in 1988, up sharply from less than one ton in 1985. In order to capture gold as a reserve for the Central Bank, in 1988 the government offered a 5 percent bonus over the international price of gold on local sales to the Central Bank. Gold was mined almost exclusively by over 300 cooperatives throughout the country, along with about 10,000 prospectors.

A large percentage of the cooperatives worked in Tipuani, Guanay, Mapiri, Huayti, and Teoponte in a 21,000-hectare region set aside for gold digging and located 120 kilometers north of La Paz. Mining cooperatives in the late 1980s had requested an additional 53,000 hectares from the government for gold prospecting. Others panned for their fortunes in remote villages like Araras along the Brazilian border in Beni. Small-scale operations were very traditional and wasteful. Analysts predicted that more commercial production, such as the dredging of alluvial deposits, would maximize gold output.

A few medium-sized mining operations, as well as the Armed Forces National Development Corporation (Corporacie las Fuerzas Armadas para el Desarrollo Nacional--Cofadena) became involved in the gold rush in the 1980s. Government policy favored augmenting gold reserves as a means of leveraging more external finance for development projects. The government's mineral policy also gave a high priority to exploiting the lithium and potassium deposits located in the brines of the southern Altiplano's Uyuni saltpan, estimated to be the largest of their kind in the world.

The United States Geological Survey, the Bolivian Geological Survey (Servicio Geol穣o de Bolivia), and others discovered large reserves of lithium in 1976. By 1985 Bolivia's National Congress had made lithium extraction a national priority and created the Industrial Complex of the of Uyuni Saltpan (Complejo Industrial de los Recursos Evapor�cos del Salar de Uyuni) to explore, exploit, and market lithium. Because the extraction of lithium is an expensive, technically complex process, the government sought bids for some foreign investment in lithium in the late 1980s.

In addition to an estimated 5.5 million tons of lithium reserves, Bolivia also had approximately 110 million tons of potassium, 3.2 tons of boron, and an unknown amount of magnesium associated with lithium. After years of planning, the Mut?on mine was scheduled to open its first of two plants in 1989. The Mut?ne, the sole responsibility of the Mining Company of the Oriente, was expected to yield 592,000 tons of iron in its first five years of operation. Mut? was also expected to produce manganese.

The prospects for the steel industry, which was controlled by Bolivian Iron and Steel (Unidad Promotora de La Siderurgia Boliviana, formerly known as Sider?a Boliviana), however, were bleak. After more than a decade of planning a national steel plant, Bolivia was still unable to obtain financing for such a project, especially given international overcapacity in steel. The possibility of a national steel plant appeared unlikely at the end of the 1980s.
Bolivia Table of Contents

Source: U.S. Library of Congress

 

[Roxanne Appleby]

it's funny how you don't hear zeb or ami talking about how the house of saud grabbed up the arabian companies.

norway nationalized its oil and there are, contrary to ami and rox's predictions, no slave labor camps.

Are you sure there's no slave labor camps in Norway?

Seriously, I don't know, but I will bet, that whatever Norway did was far more respectful of private property and prior good faith agreements that what is happening in Bolivia and Venezuela. If they maintain their current course those countries are heading toward North Korea-level poverty - for the same reasons. I pity the poor ignorant souls who live there.

 

[Munachi]

The rule of law and limited government are real values, because it has been well demonstrated that humans thrive best where both are present. Creating conditions in which humans can thrive is the real value. To the extent democracy serves that end, it is a useful tool. That's all it is, though - a tool - which can be used for good or ill: "Two wolves and a sheep vote what to have for dinner."

For all the anti-Americanism that is rife on this forum there has never been a place where more people enjoyed more freedom and greater prosperity than the United States. Humans can thrive in the United States, no matter who they are or who their parents were. Go ahead and sneer or snarl, AHers - your hostility does not make it any less true. That makes the U.S. a pretty good model.

Bolivia is just the opposite. No rule of law is possibly the main reason it's the poorest nation in South America, and this kind of action is a symptom of that.

again, i must say i don't know enough about economics or anything to really argue about that. instead, a few questions: what is "the rule of law" and what is "limited government"? wasn't expecially in the earlier times of industrialization the interference of government with trade etc. quite little and that lead to quite disastrous conditions for a lot of people and this was one of the reasons ideas like those of marx etc. even came up? but again, i must apologize if i get facts wrong...

what i wonder also, is - maybe what you say will help one country, a small group of people who are more or less in the same situation - but on a world wide scale? how exactly will it lead to a more fair situation? as long as some countries are considerably poorer than others there will be a great difference also in the situation of people. i am still not sure what you see by "the rule of law", and also by "limited government", and how it would help in the concrete case of bolivia, if all resources are exploited by non-bolivian companies, who will use only a tiny porportion of the local people for working there, and who pay very little taxes.

as for the "anti-americanism" - if those that criticize american politics are anti-american - aren't those that criticize bolivian politics anti-bolivian? who here has ever been anti a whole country, rather than aspects of its politics?

as for humans prospering most and being the freest in the US - well now you might call me anti-american, but it wasn't my impression they are. of course, they are better off than in some places. but best? have you been everywhere else? and where have you been not only for a short vacation but have actually lived? for being as rich a country as it is, i was in fact shocked at how much poorness i saw in the US. of course, by far not as much as what i saw in peru or bolivia, but comparing it to other "western" countries. and freedom... hm, a lot of the control mechanisms are of course self-imposed due to how strongly religious some regions are... but in general, there i often felt there is a police presence that can feel a bit scary, like you are being watched constantly. funnily, a friend of mine who is a few years older and thus remembers the days of communism better - and neither her nor i want them back, before you start thinking the wrong thing - said that when she went to the US, she felt a bit like being back in the GDR.

 

[Munachi]

Are you sure there's no slave labor camps in Norway?

Seriously, I don't know, but I will bet, that whatever Norway did was far more respectful of private property and prior good faith agreements that what is happening in Bolivia and Venezuela. If they maintain their current course those countries are heading toward North Korea-level poverty - for the same reasons. I pity the poor ignorant souls who live there.

i think you can't throw bolivia and venezuela into the same... hm... how do you say that in english??? there are connections, of course, and they are in some aspects working together, but from what i know morales' and chavez' politics aren't all the same. and as i said, i think morales is more planning on renegotiating rather than kicking these companies out.

 

[Roxanne Appleby]

Rule of law (Wikipedia):
The rule of law implies that government authority may only be exercised in accordance with written laws, which were adopted through an established procedure. The principle is intended to be a safeguard against arbitrary rulings in individual cases.

Limited government:
"Limited government" is most commonly government where its functions and powers are prescribed, limited, and restricted by law, usually in a written constitution. In America, the concept of limited government flows naturally from the assumption of popular sovereignty: If the people are sovereign, then any powers had by government are "given on loan", and detract from the people's innate sovereignty. Therefore such powers are inherently limited.

It is curious, but since the fall of the Soviet Union these the presence of these elements have proven to be much better predictors of success than the presence of "democracy."

 

[drksideofthemoon]

Hitler was elected on a platform that included persecution of ethnic and religious minorities. I suppose it would have been undemocratic not to honor that platform.

Perhaps democracy is not a value in itself. I can be, but is not necessarily, a means to a an worthy end, which is liberty.

I think that is a rather extreme stretch. There is huge difference between ethnic, and religous persecution, and the nationalization of a country's natural resources..

 

[drksideofthemoon]

Are you sure there's no slave labor camps in Norway?

Seriously, I don't know, but I will bet, that whatever Norway did was far more respectful of private property and prior good faith agreements that what is happening in Bolivia and Venezuela. If they maintain their current course those countries are heading toward North Korea-level poverty - for the same reasons. I pity the poor ignorant souls who live there.

From what I heard on the news is that the Bolivian government is giving the petro companies 6 months to renegotiate their contracts. What's the big deal with that?

You cannot compare Bolivia with Venezuela, they are two completely different countries...

Yes, pity the poor ignorant souls there, for they are not blessed with the wisdom that you seem to posess...

Get a grip...

 

[R. Richard]

sorry, i have to get back to that phrase. it doesn't go out of my head.

now, you will probably tell me i am over-interpreting, and you didn't mean it all that serious - but i think it is important to be aware of what we are saying even if we aren't concious of that we are saying this.

As a matter of reported historical fact, Morales was a llama herder. I suspect, from your posts, that the job of llama herder is not held in high regard in Bolivia. However, the job of llama herder is honest work.

The job of stealing the work product of other people [nationalizing] is not honest work. I said and I mean that Morales should go back to honest work.

In case you are not familiar with the situation Morales is mainly stealing from other South American nations, not from US companies. Thus, my problem is not with Morales direct impact on the US, but on his impact on other South American countries.

I have never been in Bolivia. I was in Brazil. I watched a rich Brazilian rancher call one of his worker/slaves over to him and ask if the man was happy with his job. The worker/slave told the rancher that the worker/slave was very happy to work for the rancher. I had to wonder that the rancher could not see that the worker/slave wanted to kill the rich rancher. [By the way, I did not help the worker/slave. The government of Brazil was paying me for my services and the worker/slave could not.]

What Morales is doing is playing to the rich in Bolivia, while pretending to help the poor. IMNTHO, Morales should go back to honest work.