Bolivian President Seizes Oil and Natural Gas Fields

Bolivian President Evo Morales has placed his country's oil and natural gas production under state control, raising concerns about the potential long-term effects on the energy and economic interests of other nations. On Monday, he issued a six-month ultimatum to foreign energy companies, ordering them to renegotiate their contracts with the Bolivian government or leave the country. To back up his decree, he sent troops to seize and occupy oil and natural gas fields throughout the country.

According to World News Guide Jennifer Brea, Morales' move came as no surprise most international observers. He had promised to nationalize Bolivia's oil and natural gas production during his election campaign, and members of the radical left had been pressuring him to follow through ever since he took office. Morales said on Monday that seizing the oil and natural gas fields was just the beginning, and promised to nationalize mines, forests and land in an effort to stop what he called "the pillage of our natural resources by foreign companies."

Morales is a socialist, who has called capitalism "the worst enemy of humanity." Under his new nationalized energy program, the companies that operate large natural gas fields in Bolivia will keep only 18 percent of the gas they produce, down from 50 percent. At smaller fields, companies will be allowed to keep 40 percent. Bolivia has the second largest natural gas reserves in Latin America, second only to Venezuela.

Some have argued that Morales' seizure of oil and natural gas production will help to end the country's poverty and social problems, others that it will destroy the country's economy by forcing international businesses to abandon Bolivia and end foreign investment. In her penetrating analysis, World News Guide Jennifer Brea reveals the fallacy of both arguments and shows the potential progress and pitfalls along the road Morales has chosen for his country.

News Coverage:

Bolivia: Gas Nationalization Just the Start (Reuters/Boston Globe)
Bolivia takeover alarms powerful allies (BBC)
Concern growing over Bolivia's decree to nationalize oil, gas industry (Voice of America)
Bolivian seizure of oil, gas fields worries foreign governments (Christian Science Monitor)
Bolivian president defends energy nationalization (Associated Press/Globe and Mail)