Sunday, January 07, 2007

Bolivia: Taking the Country's Resources Back

Constituent Assembly or not, Morales is moving his country forward at a very nice speed. This symbolically important event occured a day before the Morales Government signaled a six-fold increase in mining industy taxes after it was disclosed the state had received just $45 million in taxes on $1 billion worth of export in 2006.

Bolivia's Morales celebrates foreign water company's exit, plans more nationalization
The Associated Press
Thursday, January 4, 2007

LA PAZ, Bolivia
President Evo Morales on Wednesday celebrated the departure of French-owned water utility Aguas de Illimani from Bolivia and vowed to continue his administration's reversal of a decade-old privatization of key Bolivian industries.

In a ceremony at the presidential palace in La Paz, Morales officially bid farewell to the affiliate of French transnational Suez, which has provided water to the capital of La Paz and its poorer satellite, El Alto, since a former public utility was privatized in 1997.

"Water cannot be turned over to private business," Morales said. "It must remain a basic service, with participation of the state so that water service can be provided almost for free."

Aguas de Illimani's high rates and a reluctance to expand service into the fringes of the twin cities prompted protests in El Alto in 2005 demanding the water system be returned to state control.

Then-President Carlos Mesa moved to rescind Aguas de Illimani's contract, but negotiations continued for two years before Morales' government and the company agreed to severance terms this week.

"We have achieved an agreeable exit, assuring that foreign businesses will not simply be expelled from Bolivia," Morales said Thursday.

The president echoed other speakers at the ceremony in calling for other foreign companies operating in privatized sectors to be returned to state control, including La Paz power utility ElectroPaz, owned by Spanish energy company Iberdrola, and telecommunications company Entel, a subsidiary of Telecom Italia.
Under pressure from the World Bank and International Monetary Fund, former President Gonzalo Sanchez de Lozada privatized a wide swath of Bolivian industry in the mid-1990s, including the oil and gas, water, power, railroad and telecommunications sectors, as well as the national airline and pension plan. But the privatization has mixed results and failed to create new jobs as Sanchez de Lozada had hoped.
Whole thing


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