Daily Archives: June 28, 2011

Negative government intervention and anarchy

Unfortunate news were released today: Negative government economic intervention and violent takeover of a mine resulted in the murder of one woman.

Teresa Morales, Productive Development Ministry, has stated that there will be a range of approved prices for poultry, corn, wheat, sorghum, sugar cane. She said that given the “succesful” control of vegetable oil pricing, government will continue with this type of control. Government believes that the national market should be controlled before allowing exports. In turn, private producers have reduced their production, given the uncertainty. They will produce more only if they can export, and that also allows lowered internal prices. FAO, back in February, stated that this type of government intervention caused inflation and shortages, leading to food imports. I just say this, food security for Bolivia was manageable only six years ago.

http://www.paginasiete.bo/2011-06-28/Economia/Destacados/11Eco0012801.aspx

There will be a reduction of 10% in the supply of gas stations nationwide. Remember the unfortunate attempt to increase the price of gasoline and diesel, and then revoking it? Uncertainty is a prime indicator for entrepreneurial activity. 50 out of 500 gas stations expressed their intention of not renewing their operating licenses. Expropriation or “peaceful” takeover were signals (estimated $150K compensation per station), that politicians from ruling government expressed over time. The association of gas stations (ASOSUR) explains that this is a private decision and will not compromise the supply. I believe that fewer stations generate more discomfort for the demand side; uncertainty forces investors to go elsewhere.

http://www.laprensa.com.bo/noticias/28-6-2011/noticias/28-06-2011_19137.php

A violent clash between two communities (Yaco and Mallasa municipalities)  over a tin mine resulted in one casualty. A woman was hit by a stone and died when people from one Mallasa, after renting from the sole owner, were planning to start working. Chojñacota (cerro verde) mine belongs to Fernando Pereira, in Yaco Municipality. People from Yaco, believe they should be the ones who get to work there, as the mine is located there. People from Mallasa were attacked with stones and small dynamite charges when they intended to start operations. Mining minister said, not so long ago, that new mining law has a 30% advance, after six years… People die, mining has become a no-man-land and anarchy is taking over, and what is more alarming is how citizens behavior turn so much violent against each other. This is a recurring event: on January 20, same communities fought over Laramcota (cerro azul) mine.

http://www.la-razon.com/version.php?ArticleId=132737&EditionId=2572

Less than two weeks ago, Amayapampa and Sayaquira mines were also the source of violent take overs.

http://www.lostiempos.com/diario/actualidad/nacional/20110628/pelea-de-ayllus-por-una-mina-deja-un-muerto_131589_266521.html

The so-called indigenous-community-socialist-marxist government has only caused confrontation inside society in general, not only on mining activities. There is no tolerance, there is no respect for the rights of others. The sense of belonging to a society, to have common grounds is beginning to fade away inside current Bolivia.