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Old 05-01-2006, 04:11 PM   #1 (permalink)
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Bolivia goes insane - gas prices sure to rise

Quote:
Bolivia Military Told to Occupy Gas Fields
Mon May 1, 5:30 PM

In this image taken from a television screen Bolivian President Evo Morales speaks in Tarija, Bolivia, some 700 kilometers (435 miles) south of La Paz, Monday, May 1, 2006. Morales announced the nationalization of Bolivia's natural gas and oil industry, ordering foreign energy companies to send their production to a state company for sale. (AP Photo/ TVB Channel 7)

LA PAZ, Bolivia - President Evo Morales ordered soldiers to occupy Bolivia's natural gas fields Monday and threatened to evict foreign companies unless they give Bolivia control over the entire chain of production.

Morales said soldiers and engineers with Bolivia's state-owned oil company would be sent "immediately" to installations and gas fields tapped by foreign petroleum companies - including Britain's BG Group PLC and BP PLC, Brazil's Petroleo Brasileiro SA, Spanish-Argentine Repsol YPF SA and U.S.-based Exxon Mobil Corp.

Morales, a leftist allied with Cuba's Fidel Castro and Venezuela's Hugo Chavez in seeking to blunt U.S. and outside influence in the region, had pledged to exert greater state control over the industry since he won the presidency in December, becoming Bolivia's first Indian president.

The companies have six months to agree to new contracts, or must leave Bolivia, he said.

"The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources," Morales said in a speech from the San Alberto petroleum field in southern Bolivia operated by Brazil's Petroleo Brasileiro SA in association with the Spanish-Argentine Repsol YPF SA and Total.

"The looting by the foreign companies has ended," Morales declared.

The announcement came less than a month after Chavez ordered the seizure of oil fields from Total and Italy's Eni SpA when the companies failed to comply with a government demand that operations be turned over to Venezuela's state oil company, Petroleos de Venezuela SA.

Bolivia has South America's second largest natural gas reserves after Venezuela, and all foreign companies must turn over most production control to Bolivia's cash-strapped state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, Morales said.

An Army spokesman did not immediately return a telephone message seeking comment on when and how the military would act.

Multinational companies that produced 100 million cubic feet of natural gas daily last year in Bolivia will be able to retain only 18 percent of their production, with the rest being given to YPFB, he said. Morales did not name the companies.

A Repsol spokesman said the company could not respond because it had not received official word of the announcement. Petrobras officials did not immediately return messages seeking comment on Monday, a national holiday in Brazil.

"We are monitoring the situation very closely," said Bob Davis, a spokesman for the world's largest oil company Exxon Mobil Corp. He said Exxon Mobil has a 30 percent interest in a non-producing field called Itau, which is operated by Total.

Morales said the government would begin negotiations immediately with the companies to make sure they are willing to comply, but said they could be stripped of their privilege to operate in Bolivia if they don't sign new contracts within six months.

In the past, YPFB produced Bolivia's natural gas, but it was reduced to an administrative role in the mid-1990s after the country's gas exploration and production business was privatized. Experts have warned that the company is incapable of becoming a producer again without a massive infusion of cash.

Morales has repeatedly said the country's natural resources have been "looted" by foreign companies and must be nationalized so that Bolivians could benefit from the profits that were being sent overseas.

But he has also said that nationalization will not mean a complete state takeover, because Bolivia lacks the ability to tap all its natural gas on its own.

Last week, Morales told Brazil's Valor Economico newspaper that Bolivia would have to "set up a new battalion, a new army of oil and gas specialists to exert the property right" for a complete state takeover of petroleum production.

Morales chose May 1, International Day of the Workers, to announce the nationalization plan. He wore a YPFB helmet as he gave his speech. Afterward, a soldier unfurled a Bolivian flag from atop the natural gas installation.

Morales also said the state would retake majority control of Bolivian hydrocarbons companies that were partially privatized in the 1990s.

Morales is following the path of Chavez, his populist political mentor, said Pietro Pitts, editor-in-chief for the Venezuela-based LatinPetroleum.com.

"You can call Bolivia Venezuela Part II because it seems like he (Morales) is going to try to do the same thing that Chavez is doing," said Pitts, referring to giving the state majority control of hydrocarbons.

Ecuador's Congress last month ratified a hydrocarbons reform law designed to cut into windfall profits of foreign crude producers, among them U.S.-based Occidental Petroleum Corp.

The law would give the government 50 percent of oil company profits whenever the international oil market exceeds the prices established in existing contracts. Most of those deals were pegged to 1990s oil prices when crude was worth a fraction of today's market.

The Ecuadorean law sparked sharp reaction from Washington. A U.S. Embassy spokeswoman said recently that the law appeared to violate a bilateral investment treaty between the two nations.

----

AP Business Writers Frank Bajak and Alan Clendenning contributed to this story from Bogota, Colombia and Mexico City.
i dunno if anyone else will be able to get to this link or if you need to be a member of my ISP *shrugs*
http://www.optonline.net/News/Articl...cle%3D18204528

This is certainly the last thing we needed with gas prices. As if the oil companies didn't have enough excuses to raise prices on oil/gas.

Does anyone else think they went more than a little overboard with this?
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Old 05-01-2006, 04:32 PM   #2 (permalink)
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OPEC is probably the middle east equivelent to what Mexico, Cuba, Venezuela and now Bolivia could form. Why should large oil companies just be able to export the natural resources just because they 'own' the land and agreed to $10/barrel back in the 90s?

(I made quite a bit of money in the stock market today probably, in part, because of this)
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Old 05-01-2006, 04:50 PM   #3 (permalink)
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ASU2003 -- Venezuela is in OPEC. In fact, Venezuela was one of the founding nations and it was a Venezuelan who came up with the idea in the first place (and another, Chavez, that, a short while ago made it relevant again).

Regardless of what you think OPEC did or does, you can be assured that Big Oil is making more money than any OPEC nation. Big Oil likes it when OPEC flexes its muscle, their profits go up and up.
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Old 05-01-2006, 04:56 PM   #4 (permalink)
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ObieX, how is it that you view Bolivia as having gone insane? The government is taking back what was given away in the '90's. Seems rather shrewd in my opinion.
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Old 05-01-2006, 08:12 PM   #5 (permalink)
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It's insane because they failed to learn what happened to Egypt when they nationalized... or Cuba... or Russia.

Everytime you nationalize you lose ALL of your foreign investers. They fear all of the other industries are next, so they pull out their money.

Cuba... well you can argue international politics on that one, I wont argue.

In the '50s Nasser nationalized the Suez, Agriculture, and Industry. This caused every single Italian, British, French, and Jewish commercial businessman to leave the country. In their absense Egypt has had close to -9% business growth per year. The cotton fields, although better irrigated and more farmland was opened up failed to yield what the smaller and less water fields did before nationalization. Useless industries were started in order to promote "buy Egyptian", they produced exact replicas of Italian and Japanese cars... however were more expensive (even with imports) and were notorious for breaking down constantly. The only stable income Egypt had post-nationalization was from the Suez Canal (they lost it for a while there too) and exporting cheap laborers to other countries (which only lasted about 8 years till the oil collapse)

While under state-controlled oil production, Russia has notoriously poor oil wells and methods of finding it. With the opening to foreign investment they've found 4x the amount of oil the old method thought there was. I wont even talk about how efficient their agriculture was.

Time and time again people look to states to nationalize their systems looking back to Germany in the '30s. However that entire boom was based off of massive military buildup which if not sent off to war would bleed itself dry. Since Bolivia can't exactly invade and conquor a new country every month, this isnt feasable.

Nationalizing resources sounds good, but it's simply not practical. It's inefficient and slow. Back in the '60's they didnt know any better, now they should.
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Old 05-03-2006, 07:19 PM   #6 (permalink)
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And in the time that it takes for the foreign investment to regain confidence in that economy, a lot of things can happen.
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Old 05-04-2006, 06:57 AM   #7 (permalink)
 
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nice to see "arguments" about efficiency that exclude any and all political considerations, flatten the world into a two-dimensional space equivalent to those absurd diagrams that "describe" economic activity you get in econ 101.

this from today's financial times:

Quote:
La Paz intent on reversing ?unconstitutional? privatisation
>By Hal Weitzman in Lima
>Published: May 3 2006 22:00 | Last updated: May 3 2006 22:00
>>

The Bolivian government?s position on nationalisation begins from the premise that the contracts under which foreign investors are currently operating in the natural gas sector are unconstitutional.

The new policy of President Evo Morales?s administration says the contracts ?expressly violate? Article 59 of the constitution, since they were never individually approved by Congress. It calls the privatisation process of 1996-97 ?an act of treason against the country that put into foreign hands control and direction of a strategic sector, damaging our sovereignty and national dignity?.

The policy gives the 21 foreign oil companies operating in Bolivia 180 days to hand over to YPFB, the state energy company, responsibility for determining all aspects of production and commercialisation of reserves, including output volumes and prices for internal and external markets.

While new contracts are being drafted, fields that produce more than 100m cubic feet a day will pay 82 per cent of the value of production in taxes and royalties, retaining 18 per cent. In practice, only two fields are affected ? San Alberto and San Antonio, both operated by Petrobras of Brazil.

The 82-18 split is intended to be a mirror-image of the tax regime established by the original privatisation contracts, which fixed a tax rate of 18 per cent. The hydrocarbons law of May 2005 raised that to 50 per cent, a figure that will continue to apply to all other operators.

Under Article 7 of the new policy, the state will buy enough shares to give it control of three former state companies privatised in 1996: Andina, controlled by Repsol of Spain; Chaco, part-owned by BP of the UK; and Transredes, a pipeline company controlled by Royal Dutch Shell, the Anglo-Dutch group.

The Bolivian state currently retains a minority interest in these companies. The government says it will purchase a majority stake without expropriation. Andrés Soliz Rada, hydrocarbons minister, plans to create a special government auditor to determine the value of any compensation. To fill Bolivia?s gap in expertise, Mr Soliz said he would ?be counting on foreign support?, which many observers take to mean advisers from PDVSA, Venezuela?s state oil company.

Oil industry sources in Caracas have told the FT that Venezuela had agreed to send Bernard Mommer, vice-minister for energy, to La Paz to advise on its nationalisation strategy.

Mr Mommer declined to comment.

He was an architect of Venezuela?s model of steeply increasing tax rates and royalty levels.
so you have bolivia reacting against the forced consequences of imf-driven "structural adjustment" programs--a reaction against neoliberal ideology carried out on grounds both legal and political. nationalization may not be an optimal solution, but critiques of bolivia's move that take no acount of context are worthless. neoliberalism--which was is and will be a particular ideology that is oriented by surreal assumptions about the rationality of markets--has been failing all over the southern hemisphere. anyone who looks at the politics of neoliberal ideology understands taht behind the fiction of rational markets there is nothing more or less than an effort to extend a privatized neo-colonialism. as such, neoliberalism is an extension of neo-colonialism----one that does not function except to open up new profits for norhtern corporate interests. it does not work to help people live decent lives. it does not work politically. the reactions against this ridiculous colonial ideology have been legion.

i would expect that, if the united states were being subjected to parallel types of structural adjustment, that the same folk above who tsk tsk at bolivia would be all up in arms, would be waving about claims rooted in "natioanl sovereignty" and so forth.

folk defend neoliberalism because they know about it from econ textbooks. they have no idea what it means in social reality. because there is not alot of information about the daily consequences of this ideology that makes it into the stream of decontextualized factoids that american prefer to pass off to themselves as information, these folk can pretend that there are no socal consequences.
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Old 05-04-2006, 07:27 AM   #8 (permalink)
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Sorry but the last econ class I took was 6 years ago. I take a pragmatic historian viewpoint, not a post-modern one which is so popular today.

You can say what you want about me ignoring the social impact of "privatized neo-colonialism", which is ironic because the only time I've heard that phrase before is by a socialist college dropout (not saying you're a dropout, just found it a bit amusing).

The pragmatic approach I take is that of turning away from the potential economic prosperity governments take when they are going to create it in their own minds. I provided plenty of examples based on historical fact that nationalizing resources cause an evaporation of government income and a complete eradication of international investment which give these poorer countries the infrastructure required to have a truely modern society.

With the truely modern society countries can rely less on the dependancy of foreign nations seeking their natural resources and can more efficiently control how and what structures to be developed.

If that link is correct, and they paid the foreign countries for every share they nationalized then I could be wrong in denouncing it. However you did not post a link, and it dates to 2003... long before this occured.
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Old 05-04-2006, 09:48 AM   #9 (permalink)
 
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it was taken from this morning's washington post, which in turn linked to the articel from this morning's ft.

the link:

http://news.ft.com/cms/s/0b5d64fa-da...0779e2340.html

my apologies about the omission.
i am less sure what to make of your total naivete regarding the simplest realities of north/south relations in the context of this newest mutation of capitalist organization.
even less do i understand your curious opposition between the "pragmatic" and "postmodern"--neither of which mean very much. in this case, the core of the problem i really have is that you take no account of context but feel that it is ok to opine anyway, and then, when challenged, you simply revert to these strange, meaningless categories. you cannot treat the propositions particular to neoliberalism as abstract statements, any more than you can rationally pretend that "efficiency" is a neutral category. if you want to have an actual conversation, then fine--either do some research--a salutary act that would probably demonstrate what i am saying about truncated contexts in your posts better than i could--or make an effort to actually engage with the content of the argument.

not having information is not in itself a problem--i dont have complete info, you dont have it, no-one has it.
but not having information, not being willing to look and being dismissive of other viewpoints--particularly when it is clear from the start that you do not know what you are talking about is annoying (btw--if you want to play the non sequitor game, just look at the list of arbitrary "evidence" you adduce for your neoliberal 101 conclusion in post no. 5.)

i have other things to do.
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Old 05-04-2006, 12:52 PM   #10 (permalink)
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Excuse me?

You claim:

Quote:
the core of the problem i really have is that you take no account of context but feel that it is ok to opine anyway, and then, when challenged, you simply revert to these strange, meaningless categories. you cannot treat the propositions particular to neoliberalism as abstract statements, any more than you can rationally pretend that "efficiency" is a neutral category. if you want to have an actual conversation, then fine--either do some research--a salutary act that would probably demonstrate what i am saying about truncated contexts in your posts better than i could--or make an effort to actually engage with the content of the argument.
I have posted historical facts relating directly to the nationalization of industries and their complete failure. Efficiency is a neutral category. Either it works well in comparison to before or it does not.

Example. Egypt gained more agrarian land during the Nasser period. However they converted some of the land from the production of rice and wheat to the production of feed for cattle. Since that time Egypt has had to import food from outside countries because it can no longer grow enough to supply enough food to the people. Any farmer can tell you that in fertile grounds with abundant water you grow crops, when water is more scarce and you have more land it is more beneficial to grow cattle due to the land that is required. Thus they are inable to independantly feed their own population because of improper and yes... inefficient land usage, not because of a shortage of land.

So here is once again a truth that you fail to reply against. You claim I simply change my argument yet you have failed to once even reply to any of the historical facts I have presented.

You can claim that they are opinions, when economic realities are hard fact. When nationalized Russian oil production was a mess. Once it has been opened to international investment, they have found completely new oil reserves (despite being investigated for decades by the government beaurocracy), upgraded and made much more economically feasable.

If they want to go down the route of government controlled economy that's their right. The problem is every single one of these looks at the reforms of the Soviet and German economies with rose colored glasses in their attempt to gain world power ignoring the realities of economy.

The only conversation you have presented is implying individual investors is a leech on the economy and is in fact a new phase of colonialism, one without either merit or backup. If YOU want to engage in a conversation then so be it. However I would appreciate you using historical or economic fact to back up your statements.
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Old 05-04-2006, 02:05 PM   #11 (permalink)
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roachboy asked you to go look up what he's talking about.
you should before accusing his position of being without merit or backup--because it has both.

yours, however, selects a few historical facts and espouses them as if it's the entire picture.
for example, if you are going to rail against pariticular shifts in production/land use in various countries, you ought to at least have a fundamental understanding of the events (politically, economically, in particular) that precipitated economic changes in the nations you're discussing. are you aware of any linkages between the IMF/World Bank (Roachboy specifically mentioned the role of the Brenton Woods orgs in his post when he referenced structural adjustment programs (sap's) in his post--you should look those up if you're not aware of how they fit into the conversation) and the changes you're referring to as failing policies?

the thing is, without taking the time to at least have a rudimentary understanding of what some of us respond with, it's tedious at best to be told one is wrong when one isn't. it's one thing to say, no I know what you're talking about and I disagree with it and you for xyz reasons.
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Old 05-04-2006, 02:58 PM   #12 (permalink)
 
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basic information about the present phase of the bolivian "gas wars"

http://en.wikipedia.org/wiki/Bolivian_Gas_War
http://countrystudies.us/bolivia/71.htm

more generally, on morales:

http://www.pbs.org/frontlineworld/bl...the_ris_1.html

a piece that outlines (schematically) the role played by neoliberal ideology in the present political crisis:

http://www.commondreams.org/views05/0609-27.htm

on the role of imf policies in particular:

http://www.zmag.org/content/showarticle.cfm?ItemID=4359

not surprisingly, the material directly pertaining to th eactivities of the imf come from left-ish sources. the right pays no attention to such details as the social consequences of their metaphysics of markets.
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Old 05-04-2006, 02:58 PM   #13 (permalink)
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Oh I get it.

I make a statement on why total government control over resources is a bad thing. I support it with evidence.

He states I'm ignorant and goes on to discuss little more than how private investment is colonialism.

I ask if he wants to discuss positive effects of complete government intrusion is a positive thing.

He states I'm ignorant.

I state more evidence of ineffective government hording of national resources.

And you fall in line stating I'm ignorant and am not paying attention to your argument.

How about proving nationalizing of resources leads to effient use of said resources. And then we can move on in a discussion from there. Until then do not attack me for my beliefs if you can not make a counter argument.

And by the way... I've re-read Roach's post many times... quote where he mensions the World Bank.
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Old 05-04-2006, 05:02 PM   #14 (permalink)
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Gentlemen

Play nice, please.
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Old 05-04-2006, 09:33 PM   #15 (permalink)
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I would like to apologize. I've had a stressful week and have not carried myself on this thread in the proper manner, therefore I'm bowing out.
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Old 05-04-2006, 11:25 PM   #16 (permalink)
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Quote:
Originally Posted by Seaver
I state more evidence of ineffective government hording of national resources.

And you fall in line stating I'm ignorant and am not paying attention to your argument.

How about proving nationalizing of resources leads to effient use of said resources. And then we can move on in a discussion from there. Until then do not attack me for my beliefs if you can not make a counter argument.

And by the way... I've re-read Roach's post many times... quote where he mensions the World Bank.
Quote:
so you have bolivia reacting against the forced consequences of imf-driven "structural adjustment" programs
That was the first line of roachboy's post. When you don't connect his statement to Brenton Woods organizations (IMF & World Bank) then that indicates to roachboy and myself that you are just as likely to be unaware of the policies they inflicted on developing nations. And if you aren't accounting for such policies in your assessment of the failure of particular marktes, we then wonder how you can make accurate assertions about such failures.

neither of us need or want to prove or argue with you that nationalization is efficient. In fact, roachboy stated that:
Quote:
nationalization may not be an optimal solution
That said, if you don't know how certain Western policies fit into this discussion and how they account for at least some of the failure of particular markets, then how can you, roachboy, and myself have a profitable discussion over the causes of such failures and possible remedies?

It's true I'm assuming that you don't know about the effects of SAP's on the markets you claim failed due to nationalization. But consider where I'm coming from. I asked you a question to determine whether my assumption was accurate:
Quote:
are you aware of any linkages between the IMF/World Bank and the changes you're referring to as failing policies?
Instead of responding, you left the thread. if you felt like I was impugning your intelligence or hinging my participation with you on your level of expertise, I apologize. I engage with students day in and day out that know less than me about certain subjects. I don't ridicule them or think less of them. I encourage them to obtain new and further information before coming to concrete opinions. But if you form unshakable opinions without so much as attempting to assimilate new information into your point of view, at what point are we justified in saying bluntly that if all you want to do is espouse that private markets are good, and nationalization is bad, we don't really want to play that game. Often, these kinds of discussions go round and round without any budging of any sort. no recognition that perhaps one has some more info to benefit from, and etc. such "discussions" really just start to appear like they are venues to vent. and that's frustrating if one is trying to talk with (not to) fellow members about an idea. And that frustration comes to a head every once in a while resulting in posts that come out too abrasively.
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Old 05-05-2006, 08:38 AM   #17 (permalink)
 
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http://www.democracyctr.org/waterwar/

the above links to a series of pieces on the longer-term problems raised by the privatization of water supplies in bolivia at the behest of the world bank. the arguments were, of course, elements of the neoliberal mantra--private comapnies would be more efficient, in that little world--fact is that there had been minimal privatization of basic onfrastructure since these infrastructures were developed during the 19th-early 20th centuries. the logic behind this move is strange: it requires a pretty thoroughgoing historical myopia to consider this rational, frankly--the term efficiency functions in an interesting manner in this context: structural adjustment usually functions to make states more efficient in servicing debt to the imf/world bank/bank of the americas.

the contexts within which this abstract notion of efficiency gets put forward are often very complicated--the film "life and debt" is a good introduction--it focusses on the effects of structural adjustment policies on jamaica, and particularly on the jamaican dairy industry. in it, you get a good general idea of the relation of privatization to exploitation of local economies by transnationals which have the 9seemingly insurmountable) advantage of economies of scale. the result of this is a marked increase in dependency on international economic flows, a marked increased in social dislocation, the destruction of autonomous types of production and all the attending political consequences of such destruction. the film exploits the advantages of a case study approach--you get an outline of factors that are at least mappable onto parallel stituations in other southern hemiphere areas.

the effects of transferring control of water supply to a bechtel subsidiary were as they have been across south america when this particular "efficiency" has been applied: rising prices, erratic supply, decreasing quality. these effect entire cities, and obviously the poor disproportionately. in a country already struggling--to say the least--such "efficiencies" are little more than a sick joke.

you have similar situations that have unfolded in chile in particular--the water supply of santiago was transferred to suez lyonnaise des eaux and the same shit quickly hit the fan. neoliberalism has been failing in secot after sector, country after country fundamentally because the whole ideology is predicated on a wholesale ignorance of the history of actually existing capitalism (not the econ 101 fiction about capitalism)--it assumes that the social conditions around markets are incidental and that markets are therefore an abstract entity that remain identical to themelves regardles of the context. that is absurd.

nationalization may not be an optimal response, but it IS a logical one. the evaluation of nationalization in the context of bolivia (but in general as well, as a strategy directed against neoliberalism on the part of areas adversely effected (to say the least)) will have to wait until something actually happens.

i expect that neoliberal ideology will soon be understood as a surreal response to the collapse of the coldwar period, a symptom of irrational exuberance on the part of the then-dominant economic elite that had a fairly short life becuase once it moved from the lingua franca of world bank/imf meeting rooms to an actual policiy, the consequences of it were simply unacceptable.

of course, you wont know any of this from american television.


btw: this links to a good radio documentary produced in canada about privatization of water.

http://www.cbc.ca/news/features/water/
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Old 05-08-2006, 05:57 AM   #18 (permalink)
 
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an edtio from thsi morning's guardian.
more context for the bolivian actions:

Quote:
Morales is taking Bolivia out of the shadow of the US

The president has joined the radical bloc by taking over energy resources and signing a trade deal with Castro and Chávez

Roger Burbach
Monday May 8, 2006
The Guardian



With the nationalisation of Bolivia's natural gas and petroleum resources President Evo Morales, the country's first indigenous president, is dramatically reshaping his country's destiny. On May 1 he proclaimed "a historic day has arrived. Now the gas and oil that flows from our land will no longer belong to foreigners". This came just after his return from Havana, where he signed what was called the people's trade agreement with Fidel Castro and Venezuela's Hugo Chávez.

Until these dramatic steps, it was unclear what direction Morales was moving in during his first three months in office. He and his foreign minister held at least four talks with the US ambassador in Bolivia, David Greenlee, in which both sides seemingly extended the olive branch. As Greenlee said in March after one of the meetings: "We have a constructive dialogue with the government of Bolivia over a wide range of themes and mutual interests."

Two factors compelled Morales to seize Bolivia's national resources and to realign the country internationally: the militancy of the country's peasant, worker and indigenous movements, and the decision of the US to foist free-trade agreements on Colombia and Peru that severely damaged Bolivian exports to other Andean nations.

Morales and his political party, MAS, the Movement for Socialism, took power in January with a clear popular mandate. Social uprisings starting in 2000 demanded that the state nationalise the country's natural gas and petroleum so the lucrative profits of these industries could be used to help lift South America's poorest country out of poverty. Three presidents resigned or were forced out of office by these popular protests.

Until May 1, some of the country's popular movements felt that Morales had reneged on his campaign promises as he did little more than state that Bolivia already "owned its resources". His approval ratings dropped from 80% to 68%. But as one observer in La Paz notes, "Evo is a masterful politician". Morales chose this moment to act because of the elections for the constituent assembly, scheduled for July. The assembly will have the power to redraft the country's constitution and reshape its political institutions.

As Vice-President Alvaro García Linares has noted, the goal of MAS is "to achieve hegemony", and the assembly is central to this process. Bolivia has been unstable for years because of poverty, military revolts and the conniving of the country's political elites as they loot the public treasury. As in Venezuela prior to Chávez's election, the traditional parties are viewed as bankrupt. Morales and MAS want to breathe new life into the political and social institutions, to give voice to the country's indigenous poor who have been exploited by the caras, the faces of white oppression that have dominated Bolivia since the Spanish conquest.

With the government's expropriation decree, 15 corporations have been nationalised. These had foreign capital from a wide variety of nations, including the US, Spain, Britain, Brazil, France and the Netherlands. Seizing control of these enterprises goes to hand in hand with Bolivia's audacious steps in the trade arena. MAS and Morales view neoliberalism, US trade agreements and corporate-driven globalisation as major obstacles to the country's development.

This year, Colombia signed a so-called "free-trade agreement" with the US that is particularly harmful to Bolivia. Sixty per cent of Bolivia's major agricultural export, soya beans, currently goes to Colombia. The US-Colombian accord means that cheap, subsidised US grains will flood Colombia, driving out Bolivian soya.

Lima has also just signed a trade agreement with Washington that will have an adverse impact on Bolivian exports to Peru. These accords have ruptured the 37-year-old Andean Community of Nations, a trade pact that included Venezuela and Ecuador as well as Bolivia. Chávez announced in April that Venezuela was withdrawing from the pact because the US had "fatally wounded" the community. Morales has said that Bolivia is reconsidering its membership.

The discontent with the Andean community led to the signing of the people's trade agreement between Cuba, Venezuela and Bolivia on April 29. The accord is particularly favourable to Bolivia, as Cuba and Venezuela have agreed to take all of Bolivia's soya production as well as other agricultural commodities at market prices or better. Venezuela will also ship oil to Bolivia to meet domestic shortfalls in production, while Cuba will send doctors.

The trade agreement and Bolivia's nationalisation mark a dramatic shift in hemispheric affairs. Morales is serving notice on Washington that he is becoming part of a radical bloc of nations in Latin America that are no longer subservient to the US.

· Roger Burbach is director of the Centre for the Study of the Americas, based in Berkeley, California. He is the co-author, with Jim Tarbell, of Imperial Overstretch: George W Bush and the Hubris of Empire. This article first appeared on www.redress.btinternet.co.uk
source: http://www.guardian.co.uk/commentisf...769857,00.html

you cant even start to talk about this unless you understand the contexts that shape it.
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Old 05-08-2006, 08:35 AM   #19 (permalink)
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It may be understandable given the context, but IMO it's a stupid move. I for one would not invest any money in Bolivia (or Venezuela or Cuba for that matter). I can't be sure that the leftist governments will allow me to get a reasonable return on my investment.

Social equality is all fine and dandy, but without capital investment, their economy will suffer. Why invest when your money is going to be "stolen" by the government anyway?
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Old 05-08-2006, 08:56 AM   #20 (permalink)
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Instead of responding, you left the thread. if you felt like I was impugning your intelligence or hinging my participation with you on your level of expertise, I apologize. I engage with students day in and day out that know less than me about certain subjects.
As stated, it was becaused I carried myself in an unfit manner. My participation in this thread will impede good discussion because it will forever go back to my previous posts. Thus I bowed out.
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Old 05-09-2006, 07:30 AM   #21 (permalink)
 
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maybe the logic behind dragonlich's post above shows why direct foreign investment is not necessarily a great idea for economies like bolivia's--the social consequences of such activity gets ignored, the political implications erased----all are replaced with an abstract notion of where the money is going and an exclusive concern with profit.

this only even beings ot make sense if you understand markets as abstractions--each interchangeable with the other. this kind of financial "thinking" is not working out so well in the states--what makes you think it would work at all in a neocolonial context?
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Old 05-09-2006, 08:50 AM   #22 (permalink)
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Roachboy, it's quite simple really. If I were a big-time financial investor, or company looking for a place to invest, I would think twice about investing in south-america at the moment. There are enough other countries that promise much better profits. Investors want stable countries that support business; they don't want social changes or high taxes.

You may see this "financial" thinking as bad, but IMO it's a fact of life. I don't think companies would be able to compete if they were to look far beyond the "abstract marketplace". Being socially responsible is good, but not when it's bad for business.
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Old 05-10-2006, 06:57 AM   #23 (permalink)
 
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reactions like those of the bolivians are not about being nice, nor are they about some touchy-feely alternative to manly capitalist short-term thinking and the resulting plunder of resources (natural and human).

if you do not have an adequate level of social stability heroic investors cannot extract profit at all...capitalism is a social system, not an accumulation of abstract markets. the social and political consequences of capitalism are part of the system itself--they are not outside, they are not externalized costs, they do not disappear simply because investor viewpoints/neoliberal ideology does not account for them.

reacting to political pressure, modifying the arrangements that constitute markets are significant aspects of the history of actually existing capitalism. the bolivian case is simply one of a long chain of such reactions. the tension that drives this is obvious: capitalism requires system stability to operate in fact--the activities of the system itself tend to undermine the requirements for stability---whence the space for political action. that the ideology of those who cheerlead for capitalism regardless of consequences fails to accont for the effects of their own position is an index of the defucntionalized character of neoliberalism--which is simply the name of the ideological position that you, dragonlich, espouse.

the most sustained phase of capitalist organization--the one with the widest benefit to the greatest portion of the population, was fashioned fully in place after world war 2--at its center was a strong union movement that was co-ordinated with the functioning of the system as a whole via collective bargaining. the union movement--even in its bankrupt american form--constituted a feedback loop that checked the myopia-driven excesses of capitalist types of organization. such feedback loops are required for the system to function. even hayek argued that capitalist agents are not transparent, that firms are not transparent to themselves, and so required indices generated within/by the context to gauge what and how they operated. political opposition is such a feedback loop. that neoliberlism is incapable of understanding this basic historical fact is yet another index of its incoherence.

so manly investors scour the world in search of profits. so these same manly investors see only factors directly related to their narrow strategies and prefer to pretend that the political and social fallout of their actions are irrelevant. this extends to situations like those linked above: attempts to privatize water supply--the attempts to privatize other infrastructures--the attempts to force states to dismantle mechanisms that redistrubute wealth in the name of free trade, on and on--all disasters in situ. but who cares, really? if capitalism implodes in one place, manly investors can simply migrate to places where it hasnt. somehow, a tiny ideological world has developed in which that is seen as a rational response.
but it sounds like old-school colonialism, doesnt it? plunder, pillage, move on. the human cost is irrelevant--all that matters is the green.
if you like capitalism, you should oppose all this.


btw, the us is not outside these problems. at the level of action within the global capitalist order, the us is a prime mover in the generalized defunctionalization of capitalism itself--internally, the american neoliberal model is creating and has created conditions not unlike those which obtain in bolivia for a significant segment of the population--the main difference is that in the states, the dominant ideology--that around which both political parties converge--has persuaded folk that the incoherence of the economic order, and the range of the social consequences of it, are somehow normal, and so there is little in the way of mass politics at the moment that works to alter the system. from this viewpoint, the americans are well behind the bolivians and have much to learn from them.
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