CHAPTER 9

New Bolivian Energy Policy Causes Concern

1. Evo Morales, the new president of Bolivia, started his term by

Establishing a new food stamp program for the poor

Declaring war on Peru

Nationalizing the natural gas industry

Announcing a new exploration program in the mountains

2. David Wyss of Standard and Poor's believes that the Bolivian nationalization will not have much impact because

The government does not have the strength to enforce it

Bolivia produces comparatively little oil and gas

Bolivia's neighbors will oppose the move

The UN will block the move

3. Under the decree, private concerns operating in Bolivia have been ordered to

Cease production

Sell all their production to the government

Sell controlling stakes in their operations to the government and renegotiate royalty payments

Provide free fuel to Bolivian citizens

4. Companies must renegotiate contracts and royalties with the Bolivian government within

2 years

1 year

6 months

1 month