International Business Issues - Bolivia and Evo Morales

When the President of Bolivia, Evo Morales, nationalized a few of the country's very large mines, he threw out the foreign operators who had put in all the infrastructure, and invested all the money in digging up those resources. These foreign investment companies, as well as the companies that were running the operations lost everything, and they were paying royalties and taxes to the Bolivian government under contract.

Evo Morales claimed in a speech that those resources belonged to the Bolivian people, specifically the Native Bolivian People, and native Indians of that land. Likewise, he said that the money that was generated from the minerals that were taken from those mines belongs to the Bolivian people, and the money generated should be used to help them live better lives, not to the profiteers of foreign companies.

This sent shock waves throughout the foreign investment community, and Bolivia was quickly taken off the short list of foreign countries to invest in. It turns out that when Bolivia took over these mines and kicked out the foreigners, they didn't know enough about the mining industry to make the Mines efficient enough to turn a profit.

In the meanwhile, Evo Morales had promised the Bolivian People that by taking over the mines they could afford to pay for services to the people by the government. Now, the President of Bolivia is running for re-election and many of the peasants have taken over other small mines, claiming that they own them.

This is causing a new set of shock waves, and yet, nothing is being done. It looks like the president of Bolivia has started something that he can't finish now, and so close to the election he doesn't say a word.

According to Reuters Newswire; "ANALYSIS-Bolivia's Morales turns blind eye to mine seizures," Thu Oct 15, 2009, By Diego Ore; "Dozens of mine seizures by peasant farmers are adding to the woes of Bolivia's dilapidated mining industry, but the leftist government is unlikely to crack down on squatters ahead of a presidential election."

It looks as if the socialist tactics have given rise to the mobs in Bolivia, and this seems to be foreshadowing of things to come. Bolivia is definitely at a cross roads, and although the country was once a rising star of South America, things are not looking too good these days. Even as rogue communist and socialist nations move in to make deals with the current government. Please consider all this.

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