Daily Archives: January 18, 2013

Bolivia does not offer the best scenario for investments, says Spanish Ambassador Angel Vazquez

Aline Quispe reports for La Razon, excerpts follow:

We must admit it, Bolivia does not offer the best scenario for investments. Angel Vazquez

2013-01-14 09.22.29 amThe Ambassador of Spain valued the natural resources that exist in the country and added that investment and technology of foreign companies is needed, because it is in full development.

However, he pointed out that the expropriation of Spanish firms does not offer the best scenario to attract new investors. Also announced today [January 10, 2013], along with executives of electrical network of Spain, that will meet with the Government in Cochabamba to treat compensation for the actions of the TDE.

– How relations between Bolivia and Spain are assessed?

– Relations between Bolivia and Spain are relations of friendship (…) because Bolivia is a Latin American country and in general Spain links with the countries of Latin America are always very close. The State is in a process of change (…) that Spain has always viewed with sympathy and that wanted to accompany to the extent of its possibilities. Thanks to this, we can say that the political relationship hispano-boliviano is good.

– What you think about the nationalization of the subsidiaries of the company Spanish Iberdrola?

– You know that the Spanish Government regretted that decision and not so much regretted it because we find that the Bolivian Government has no right to nationalize. We believe that it has that right (…) sovereign and we respect that, but what does not seemed suitable was the way it was done without consultation, with a certain media hype and public force that does not seem appropriate to us.

– What is the prospect of the bilateral relationship for 2013?

– Our confidence is to maintain the same level of closeness and friendship between the two Governments and at the same time continue supporting Bolivia (…). Spanish cooperation expressed that Bolivia will continue to be a priority country (…) and that is important to note because it implies an effort of Spain, when there are difficulties in the economic sphere (…). Spain will keep many cooperation projects with substantial disbursements. At the same time, there is a chapter of relations that affect Spanish investments in Bolivia who need work.

– Expropriation of Iberdrola will affect the arrival of Spanish investment into the country?

– Foreign investment and Spanish investment in particular since then, need legal certainty to come to Bolivia, it is a concept without which international investments are not understood. Bolivia announced repeatedly that it would submit an investment law which regulate these matters. So far did not appear, that is a factor of interrogation.

The expropriation of shares in Iberdrola is the second nationalization of Spanish companies in less than a year, recognizing that there is a right of the Bolivian Government, must admit that it does not offer the best scenario to attract new foreign investment to Bolivia and the country needs investments because it is in full development. It also has the importance to exploit resources and needs capital, technology, the business organization of the foreign firms. Spanish companies in the country have contributed capital, technical capacity and entrepreneurship, have also contributed much to the development of Bolivia and we want to continue to do so, but we need a secure frame of reference and an investment law that specifies the conditions for investing in Bolivia can only offer that.

– Do you consider a bad signal to investors expropriations of Spanish firms in less than a year?

– The nationalization of a company is a sovereign right of the Government (…) and Spain respects strictly, we say Yes is that when there is an expropriation is done in accordance with the international rules and the main rule is that the company receives fair compensation and fair compensation is the value that the firm has in the market not a decreased value.

– What is your view of the decision to nationalize Iberdrola subsidiaries, the State from taking control of the chain of generation, transmission and distribution of electricity?

– If the Government establishes that it must have control of the generation and distribution of electricity is in Spain and its law, it respects it. But I must say that the Iberdrola company subsidiaries came playing a superb technical work. Service provided mainly to La Paz, El Alto, and Oruro, was top quality. I don’t think you can criticize them nothing. In addition, were acquired by Iberdrola to other foreign firms, i.e. that, unlike other companies, is a nationalization which never belonged to the State.

– How are the process with electrical network of Spain (REE)?

– Until now the Executive appointed a company to fix the value of the shares of the company to the effect that it compensate it. When that value is known, and if you agree with the figure, there will be a negotiation and there will not be conflict. But if he considers that it is not correct and not able to negotiate with the Government, it will go to international arbitration. I should note at this point that was not even filed an arbitration demand.
– REE filed a dispute. Why?
– After of the nationalization, after the first unsuccessful contacts, what did Red Electrica was sending a letter to ENDE stating that there was a controversy, that does not mean the beginning of an arbitration process. This is a strictly bilateral procedural matter between the two companies. Subsequently, it was not possible to reach an agreement on the appointment of the independent audit firm that set the value of the company. However, the negotiation process is open (…). Red Electrica is still waiting and is open to negotiation, and reach a common agreement.
– Is Spain worried about expropriation?
– While it is true that Bolivia has sovereign ability to nationalize, we must recognize that nobody likes that they nationalize a company (…), and not that becomes a true boast media putting the company in the pillory, occupying its facilities, sometimes this it is a bit shocking. I repeat, all that wouldn’t be of greater importance if the firm receives just compensation.
Profile
Name: Ángel Vázquez Díaz of Tuesta
Born: 12/11/1957
Profession: Diplomat
Position: Ambassador of Spain
A career diplomat
He studied at the diplomatic school of Madrid in 1987. Before his appointment as Ambassador of Spain in Bolivia, he held the position of Deputy Director general in the Office of diplomatic information of the Ministry of Foreign Affairs and cooperation of Spain. He was also Secretary general of Casa Sefarad in Israel and Advisor in the Department of international politics of the Cabinet of the President of the Government. He was also appointed to the diplomatic representatives of the States of Israel, France and Russia, among others. On July 6, 2012 was appointed as a new representative in Bolivia in replacement of Ramón Santos Martínez.
If we read in between the lines of a fine diplomat: political demagogue can be “accepted” as long as just compensation is paid, so more of OUR revenues go down the drain, uselessly, only for political reasons… and chances are that there will be no foreign investment coming to Bolivia if current government does not honor its public speech… if government rulers say will respect and encourage investment, should NOT, repeat NOT do otherwise!!