Thursday, May 04, 2006

Bolivia adopts Alliance policy on energy


You don’t hear anything from the so-called “peace movement” about a government sending its military in to steal the assets of private companies – this being what is now happening in Bolivia, as President Evo Morales (pictured) – pinup boy of the left because he is indigenous (though they don’t regard Margaret Thatcher as a pinup because she is a woman, because she didn’t espouse their ideology) – confiscates what he calls “our natural resources”. This is the step beyond unbundling that the Alliance (they still around?) would approve of. Trevor Loudon warned us of Morales when he was elected and Morales links to Hugo Chavez and Fidel Castro say it all.
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The BBC reports that the Bolivian army has now taken over the Palmasola refinery, and Morales has demanded that gas companies “renegotiate” the terms of their contracts with the government, and they must “sell” 51% of their assets to the state – no doubt at a price the state demands. He demands that the Bolivian state take 60% of production from all gas fields except the two largest, which will have to give up 82%.
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Soldiers have been sent to 56 locations, and Morales has said this is just the start. According to the BBC “Mr Morales said the gas fields were "just the beginning, because tomorrow it will be the mines, the forest resources and the land".
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Fool.
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Ironically, the left wing (but decidedly pragmatic) President of Brazil Lula da Silva and left wing Spanish government are both concerned – because two of the biggest investors in the Bolivian energy sector are Brazilian (Petrobras) and Spanish (Ripsol) companies respectively. On top of that, Brazil imports half of its gas from Bolivia. Gas isn’t a good commodity to transport in large quantities other than by pipeline, so substitute suppliers wont be easy to find.
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Petrobras of Brazil has cancelled all plans to invest more in Brazil and Bloomberg reports that these moves are likely to increase prices in Brazil and Argentina.
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The appropriate response by the companies is to demand that property be returned, otherwise they should use force in self defence. An alternative would be to exit and demolish the refinery, pipes and the rest, take their skills and run. Of course neither will happen – they will face the prospect of having half of their property stolen and negotiate to keep the rest. Ideally the Brazilian and Spanish government should threaten military action to protect their nationals – much as was threatened against Iran in the 1950s when it did the same to British and American oil companies.
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I expect the left will be cheering this on – claiming that the gas “belongs to the people”. Well good on “the people” – let all the companies remove their expertise and see how well the average Bolivian peasant does in figuring out how to get the gas out of the ground, refine it and sell it. If it weren’t for foreign companies using THEIR knowledge and training people to access the gas, then the gas would be useless to Bolivians – much as radio spectrum was useless to Maori (and in fact everyone on the planet) in the 18th century, as nobody even knew it existed, let alone knew how to use it. Bolivian gas, like Venezuelan and Saudi oil only exists because of the application of the mind by scientists and entrepreneurs to the resource, which previously wasn’t even known to exist. The Brazilian, Spanish and other foreign companies accessing, refining and selling it paid substantial royalties to the government to do something the government could not do – now the companies should walk and take everything left of their’s with them.
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The confiscation of property in Bolivia is utterly repulsive, and if Morales does the same to other property, then the people of Bolivia will get what they voted for – a wasteful socialist autocracy, whereby success gets confiscated by the state. I am sure Morales is hoping to make a fortune from high energy prices and redistribute the income – but he will have successfully killed off foreign investment from Bolivia. South America's poorest country will remain so.
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By the way, there is parliamentary support for Evo Morales. Hone Harawira praised him in his inaugural speech, and Tariana Turia and Pita Sharples by press release. I guess because he is indigenous, it's ok to confiscate property and chase off tau iwi investment is it?
- Evo Morales profile on Wikipedia

1 comment:

Nichlemn said...

It's those damn foreigners. You know, the people that live across the abitrarily defined borders, they're worse than the corrupt people in our country for that reason.