The fallout over Morales natural-gas takeover.

last updated 8 January 2015

Bolivia

Bolivia’s gas reserves now belong to Bolivians, said Armando Mariaca in Bolivia’s El Diario. President Evo Morales has announced that foreign countries will no longer be allowed to plunder Bolivian resources according to an outdated, colonialist model. Investors such as Brazil’s Petrobras and Spain’s Repsol, which run gas fields in Bolivia, will have to renegotiate their contracts to give a greater share back to the state. The president’s decree caused “delight here at home,” because it “corrected the huge mistakes of the past.” Abroad, though, investor countries are “predictably skeptical.” They seem not to believe that they will no longer get to buy gas at a price “infinitely lower than market rates.” To them, we say, Like it or lump it. Bolivia has the gas you need. Out of “a feeling of friendship,” we won’t charge higher prices than necessary—but neither will we cheat ourselves.

What a transparently demagogic move, said Winston Estremadoiro in Bolivia’s El Nuevo Dia. It’s the same old “bread and circuses” that populists have offered since Roman times, only in this case we’re getting “more circus and less bread.” Morales is hyping his nationalization as “the third and definitive nationalization,” comparing it to the 1937 seizure of Standard Oil assets and the 1969 seizure of Gulf assets. But he apparently doesn’t realize that those takeovers “were not free.” The Standard takeover cost this country $1.7 million in Great Depression dollars, while the Gulf fiasco crippled our petroleum production for decades. Placing our faith in our “insolvent” state gas company rather than in thriving companies such as Petrobras is “economic stupidity.” Worse, we’ve traded a cushy position as the “treasured godchild” of Brazil and Chile for an uncertain alliance with far-left governments in Cuba and Venezuela.

So this is what we get for being nice to Bolivia, said Brazil’s Veja in an editorial. Brazilian President Luiz Inácio Lula da Silva had nothing but warm words of welcome for Morales when the former coca farmer was elected president. He was repaid with “treachery.” Just last month, Lula was still the leading light of Latin America. He’s now “one more fool in the court of Venezuela’s Hugo Chavez.” It was Chavez, that ultraleftist buffoon, who “planned the theft of Brazilian property in Bolivia.”