Daily Archives: January 7, 2013

Early in 2013, and Bolivia continues to scare away private investment!

This is a well-written Editorial from El Diario:

Unexpected “nationalization”

2012-10-02 05.18.58 pmThe unexpected “nationalization” of Elecropaz (La Paz), Elfeo (Oruro), Manager of Empresas S.A. and service company (Edeser), belonging to Iberdrola, with predominant Spanish capitals, comes in addition to previous nationalization of the Transportadora de Electricidad firm, of the same origin, made eight months ago and still pending payment. This measure occurs a few days after the interview in Madrid between President Evo Morales and his counterpart Mariano Rajoy, who first expressed respect for foreign investments, motivating that now the Iberian Government asked “frankness” in official [acts] of the [Bolivian] President and a fair compensation actions, “without delay”. [puzzles me to been shown by the world as a country with no foreign policy whatsoever, and untimely official speeches when visiting and doing the opposite afterwards!]

The corresponding Decree indicates that it intends to reduce fares in the country side, supposedly greater than the electricity rates of the cities, for what would be a residual part of the nationalized utilities. Electropaz and Elfeo are not supplying power to the rural side, so it had no interference in these tariffs. If the Government intends to absorb the tens of co-operatives attending the service in these regions, it will require raising prices in effect of the energy fluid in La Paz and Oruro to fulfill its wish. There is no other source envisioned, other than the grant from the city to the rural side. The ENDE intervention to Emprelpaz, not long ago, supplying power to any region of the Altiplano, was due to mismanagement of its administrators, so it is “another matter” [that prompted that intervention], and not the same as they try to relate it with that topic.

The new situation opened an unknown present and future for urban users, being that Electropaz provided a normal and regular service, on the grounds that their rates referred to the parameters established by the authorities of the service. Against such regularity, there is not a real and evident motif of confiscation by the hands of the State. The possibility of the lifting of tariffs and that the quality of supply will suffer negative impacts, have a history that public state undertakings, in general, are bad managers.

They become addicted to increasing the recruitment of government personnel, they incur unnecessary investments by the lure of the “commissions”, enriching a few. EPSAS gives us example of technical and administrative mishandling since their social and political inclusion. This indicates that we are under a new measure of political action, given that we are indeed in pre-election period and that it is necessary to open-up the expectations of large social sectors, to which are added to those in a sense that lays a “smokescreen” about the scandal of networks of extortion which come splashing high structures of Government.

The unmotivated deployment of police and military force in large numbers in the offices and workstations of the companies concerned, domestically seeks to impress, by giving an image of false nationalist claim, and actually is only one purchase over the long-term, when not a referral to international tribunals. In the external arena, displays authoritarianism with signs of abuse, disrespect to the conventions of investment and insecurity towards potential outside investors, the ones only really generating attraction of honest work and economic reactivation.

http://www.eldiario.net/noticias/2013/2013_01/nt130103/editorial.php?n=28&-inesperada-nacionalizacion

Poor politics and plain demagogue!