Theft Or People Power: The Battle Over Bolivia's Nationalization Spree

Mineral extraction in Potosi, Bolivia
Mineral extraction in Potosi, Bolivia
Frédéric Faux

LA PAZ - Nationalization is in the air -- and on the ground -- in Bolivia.

On May 1, the country's armed forces were sent to the offices of TDE, a Spanish company that manages three-quarters of Bolivia's electricity network, to "take control of management and administration." On June 20, the Colquiri pewter mine, held by the Swiss Glencore company for the past 12 years, was seized "with immediate effect" to be administered by Comibol, a state-owned company. On August 2, Canadian mining company South American Silver was dispossessed of its indium mine. And last July, Bolivia breached its contract with Jindal, an Indian company that was supposed to run the Mutun iron mine.

Four expropriations of multinational companies in less than four months. Since May 2006, President Evo Morales has also nationalized 16 companies seen as strategic for hydrocarbons, water, metalworking, electricity and mining - a pewter foundry and an antimony exploitation managed by Glencore had already been nationalized in 2007.

On August 6, for Independence Day, a holiday celebrating Bolivia’s independence from Spain, he reasserted his suspicion towards foreign investors: "We have an obligation to reclaim the natural resources that have fallen into private hands; the Bolivian people don’t want these landowners."

A dangerous escalation

It's a radical position that hides a more complex reality. "They seize foreign companies’ assets and call these expropriations ‘nationalizations’," says economist Julio Alvarado.

"Morales wants to reinforce his country's independence, but in fact the opposite is happening. Before the so-called nationalization of hydrocarbons, Bolivia produced its own gasoline and liquefied petroleum gas, which is not the case anymore. We used to drill 20 wells a year, now we are down to 10," he says.

Observers are worried about this escalation, and see Morales’ motivation as much political as it is economic.

If nationalizing the hydrocarbons sector was a big part of Morales’ last electoral campaign, the recent expropriation of foreign mining companies was dictated by the necessity to put an end to conflicts between Comibol and powerful private mining unions. This is what happened in particular to Glencore: when the nationalization of the rich Colquiri zinc mine was announced, the mineworkers’ union, which supported the move, clashed violently with members of four independent mining cooperatives exploiting the same site and were worried about having their mine dispossessed.

Over 1,000 policemen and 600 soldiers were deployed, neighboring roads were cut off and 17 people were injured. After approximately $1 million in losses, production has picked up again, and on August 14 Comibol presented a $90 million five-year plan aimed at increasing production and building a foundry.

Foreign investment flees

But this instability is starting to put off international mining companies present in Bolivia. According to a Glencore spokesperson, "the decision to nationalize the Colquiri mine raises serious questions about the government's future policy on foreign investors." The Swiss group had invested $300 million into the country for its operations, including $70 million for the Colquiri mine. For Glencore, the loss of Colquiri comes at a time when it was finalizing new mining contracts with the government.

According to the Bolivian Institute of Foreign Trade, Bolivia has already started to suffer from its policies: out of the $154 billion of foreign investment in Latin America for 2011, only 859 million, or 0.6 percent, came to Bolivia. One official from the Bolivian Institute said, "Our Foreign Affairs Minister joked about the end of Coca-Cola in Bolivia in December 2012, when the Mayan calendar enters a new cycle. Well, that went around the world and was picked up by all the media as serious information… It goes to show what kind of reputation the country has abroad."

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

A Mother In Spain Denied Child Custody Because She Lives In Rural Area

A court in Spain usurps custody of the one-year-old boy living with his mother in the "deep" part of the Galicia region, forced to instead live with his father in the southern city of Marbella, which the judge says is "cosmopolitan" with good schools and medical care. Women's rights groups have taken up the mother's case.

A child in Galician countryside

Laure Gautherin

A Spanish court has ordered the withdrawal of a mother's custody of her one-year-old boy because she is living in the countryside in northwestern Spain, where the judge says the child won't have "opportunities for the proper development of his personality."

The case, reported Monday in La Voz de Galicia, has sparked outrage from a women's rights association but has also set off reactions from politicians of different stripes across the province of Galicia, defending the values of rural life.

Judge María Belén Ureña Carazo, of the family court of Marbella, a city on the southern coast of 141,000 people, has ordered the toddler to stay with father who lives in the city rather than with his mother because she was living in "deep Galicia" where the child would lack opportunities to "grow up in a happy environment."

Front page of La Voz de Galicia - October 25, 2021

Front page of La Voz de Galicia - Monday 25 October, 2021

La Voz de Galicia

Better in a "cosmopolitan" city?

The judge said Marbella, where the father lives, was a "cosmopolitan city" with "a good hospital" as well as "all kinds of schools" and thus provided a better environment for the child to thrive.

The mother has submitted a formal complaint to the General Council of the Judiciary that the family court magistrate had acted with "absolute contempt," her lawyer told La Voz de Galicia.

The mother quickly accumulated support from local politicians and civic organizations. The Clara Campoamor association described the judge's arguments as offensive, intolerable and typical of "an ignorant person who has not traveled much."

The Xunta de Galicia, the regional government, has addressed the case, saying that any place in Galicia meets the conditions to educate a minor. The Socialist party politician Pablo Arangüena tweeted that "it would not hurt part of the judiciary to spend a summer in Galicia."

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!