Bolivia to Widen Control of Industry
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Wednesday, May 3, 2006
LA PAZ, Bolivia, May 2 -- Bolivia's leftist government said Tuesday it would extend control over mining, forestry and other sectors of the economy after President Evo Morales nationalized the country's huge natural gas industry. Foreign governments warned that relations could be damaged.
"We're not expelling any company, but they will not earn much -- not like before," Morales said Tuesday in a television interview with Venezuela's Telesur. "We hope they'll remain partners and if they don't respect these laws, we'll make them respect them with political force."
The move solidifies Morales's role alongside Venezuela's Hugo Chavez and Cuba's Fidel Castro in Latin America's new axis of socialist-inclined leaders united against U.S. influence in the region.
In Peru, Ollanta Humala, the nationalist front-runner in a presidential election that is headed to a runoff, has said he too would force foreign mining and gas companies to renegotiate contracts.
Bolivian Vice President Alvaro Garcia Linera said Tuesday that mining companies could face higher taxes and royalty payments and that the government will intensify enforcement of existing laws to break up large underdeveloped land holdings, apparently to turn them over to the poor.
The government also will crack down on foreign timber companies violating conservation laws, Garcia said, and would steer companies to export finished wood products rather than raw timber.
Analysts said the government moves in the gas sector could drive foreign companies from South America's poorest nation and isolate Bolivia from important allies such as Brazil and Spain.
At the urging of Brazil, Morales will meet Thursday in the Argentine city of Puerto Iguazu with Argentine President Nestor Kirchner, Brazilian President Luiz Inacio Lula da Silva and possibly Venezuela's Chavez. Brazil is the biggest buyer of Bolivian gas.
Spain's Foreign Ministry summoned Bolivia's business attache to express "deep concern about the measure and the possible consequences for bilateral relations."
In Santa Cruz, Bolivia's financial center, business leaders called for a one-day strike Thursday to protest the nationalization plan.
