Here we go: Bolivia nationalizes the gas industry
May 2nd, 2006
As CNN reported yesterday, Bolivian president Evo Morales ordered nationalization of natural gas industry. I honestly believe this is a decision that will hurt Bolivia in the long run: state-owned companies suffer from acute sense of myopia in terms of extracting money now vs. investing in exploration & production.
In the Soviet Union, for example, maybe one third of all hydrocarbons underground in a particular well were extracted in a rush to move to the next one. In developing countries, the tendency is to suck the money out of the monopoly for electoral purposes while neglecting to find additional reserves.
Update: Nice round up of reactions to Bolivia nationalization over at Off Topic
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