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IMF does not see a ‘nationalization trend’ in South America; Bolivia in compensation talks

Thursday, May 3rd 2012 - 23:35 UTC
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Spokesperson Gerry Rice: “it’s a very diverse region” Spokesperson Gerry Rice: “it’s a very diverse region”

The International Monetary Fund (IMF) said it does not see a trend in South America toward state nationalization of private companies despite moves made by Bolivia and Argentina in recent weeks, a spokesman said on Thursday.

“It's a very diverse region and we would not call what we are seeing a trend,” IMF spokesman Gerry Rice told reporters, responding to a question about Bolivia's decision this week to nationalize the local unit of Spain's Red Electrica.

Rice declined to comment on the Bolivian move, but repeated the IMF position that “a predictable investment climate is crucial in all countries and in all regions.”

He said it was important to remember that the South American region “has enjoyed high levels of FDI, foreign direct investment, in recent years”.

While spokesperson Rice was announcing the IMF position given recent events, the Argentine Congress was about to approve the expropriation of YPF, and Bolivian President Evo Morales announced the nationalization of Spain's REE shares from the power transport company, but hoping to reach a ‘friendly accord’.

Contrary to Argentina, Bolivia announced that in 180 days it would pay compensation for the nationalization of the Spanish company based on a private audit, and revealed a fluid dialogue with Spanish government officials.

TDE was seized on May first just hours before President Morales together with Repsol’s CEO Antonio Brufau opened a natural gas processing plant to increase the supply of the fuel to Argentina.

Bolivian Energy minister Juan Jose Sosa argued that TDE has invested “insufficiently”. From 1997 to 2012 “TDE only invested 81 million dollars”, which breaks down to an annual average of 5 million dollars.

Sosa compared the figure with the 200 million dollars the Bolivian state has invested in Rurelec, nationalized two years ago and which was an affiliate of BP.

The Bolivian minister also revealed having held several cordial exchanges with Spain’s Industry minister Jose Manuel Soria regarding the future negotiation with REE officials to reach a fair compensation price for the seizure of the company which manages 73% of Bolivia’s grid. REE top officials are expected in Bolivia next week.

The nationalization decree also speaks of the Bolivian government’s intention of reaching a “friendly accord” with the Spanish company, including a fair compensation.

Categories: Politics, Latin America.

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  • row82

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    May 04th, 2012 - 06:48 pm 0
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