Nationalisations, really?

Bolivian Deputy threatens AB InBev subsidiary with nationalisation in wake of Santa Cruz protests.

Hernán Hinojosa, a member of the Bolivian Legislative Assembly of the ruling left-wing Movement For Socialism (“MAS”), announced that he would introduce a bill to nationalise two Santa Cruz-based cooperatives and two companies which support a civil society strike in the region. The protest, called by the Pro Santa Cruz Committee began on 22 October to pressure the government to carry out a census next year, after the federal government delayed the measure until 2024.

A new census will show the new demographic trends in the country which would show the increase in population of the municipalities of Santa Cruz since the last 2012 census. Thus, the new census will grant more resources and parliamentary representation to Santa Cruz, and delays from the state government in La Paz are widely perceived as a decision from President Arce’s administration to deny them the powers they deserve.

A former vice minister of the economy commented, “The strike in Santa Cruz got out of control. Santa Cruz has a legitimate claim for the census – it has grown a lot over the past decade – and the government, instead of engaging in dialogue, decided to set everything on fire. The crux of the matter is that the government don’t want the census now due to the impact it would have on the elections in 2025. In particular, former President Evo Morales – from Laz Paz – is waiting in the wings and he does not want to see Santa Cruz have more influence.” Nevertheless, Hinojosa’s plan to nationalise these companies is yet to be supported by the MAS party legislators.

In the meantime, the strike in the region has brought to a temporary halt the internal MAS dispute Evo Morales and President Luis Arce, who said that the main goal of the protesters was to carry out a coup. Tensions continue to escalate as the Pro Santa Cruz Committee threatens to call a national strike in the coming days while the government continues to send police forces into the region. Last week, clashes in the streets left one dead.

An Aymaran political researcher despaired, “The government is using every weapon it can to  push back against the Santa Cruz protestors, they are desperate, they have banned agricultural exports, blocked the passage of trucks, and even threatened to nationalise companies. It’s an attack on the region that contributes most to the GDP of Bolivia. It makes no sense. Even Evo Morales, when he was in power, knew he had to get along with the Santa Cruz oligarchy because they are the economic engine of Bolivia.”

“The government is using every weapon it can to  push back against the Santa Cruz protestors, they are desperate.”

Aymaran political researcher, Bolivia.

The former vice minister of the economy agreed, “The companies they have threatened, plus others in Santa Cruz, are among those that pay the most taxes in Bolivia. They are categorised as GRACOs (large taxpayers) and the Bolivian state is bankrupt. How can you nationalise companies in this context? Revenue will fall further.”

Increasing social and political tensions have alerted foreign investors in Bolivia and Hinojosa’s plan brings back the ghosts of the late 2000s nationalisations which cost the state USD 714 million only in compensations from arbitration disputes. Furthermore, the current protests have paralysed exports from Santa Cruz, the country’s largest agricultural hub, which could hinder Bolivia’s economic growth. A financial analyst in New York commented, “This rhetoric could be very damaging for Bolivia, it’s all over the international media and it will scare investors.”

“The government’s behaviour, contrary to what they think, shows weakness. It shows that they are not capable of governing. Their strategy is to show strength but ultimately to give in – I don’t believe they will nationalise anything and they will announce 2023 as the year of the census.”

Political scientist, Bolivia

A Bolivian political scientist didn’t think the government would go as far as to nationalise companies, “The government’s behaviour, contrary to what they think, shows weakness. It shows that they are not capable of governing. Their strategy is to show strength but ultimately to give in – I don’t believe they will nationalise anything and they will announce 2023 as the year of the census. I just wonder, if the plan is to give in at the end, why do so much damage to the country? Damage to the economy, damage to Bolivia’s reputation, announcing nationalisations, etc.”

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