Wednesday, February 20, 2013

Bolivia nationalizes Spanish firm that operates Bolivian airports


Bolivia nationalized the company that runs the three largest airports in Bolivia because the government claims the company did not invest in improving the airports.
Servicios de Aeropuertos Bollivianos SA (Sabsa) is a division of Spain's Abertis Infraestructure SA but Sabsa is also partly owned by Aena Aeropuertos SA based in Madrid. Bolivian president Evo Morales said that the privatization of Sabsa in 1997 was equivalent to "robbery" and "looting". He claimed that since that time the company's profits have been exorbitant and investments "ridiculous".
Since taking office in 2006 Morales has moved to put telecommunication, energy and water industries in the hands of the state. As reported in Digital Journal he took over Spanish power companies the end of last year.
The parent company of Sabsa says that it respects the government's decision but trusts it will receive adequate compensation. The company claims that the government had frozen the fees that Sabsa can collect a decade ago. This new decree marks the third time in the space of a year that Morales has nationalized Spanish companies that operate in Bolivia. In 2006 he took over oil and gas fields, and refineries owned by by Brazil's own state-run Petroleo Brasileiro.
Spain's Foreign Ministry was more negative than the company nationalized:“The Spanish government deeply regrets the Bolivian government’s decision to nationalize Sabsa, and particularly the police occupation of its headquarters. Spain does not consider this a friendly act.”
While foreign investors may be wary of investing in Bolivia, the economy is estimated to have grown by at least 5% in 2012 according to the International Monetary Fund. Finance Minister Luis Arce told reporters that he expected the economy to grow by 5.5% in 2013. As the appended video explains, nationalization is sometimes used as a threat to get companies to provide more for Bolivians rather than risk being taken over. Obviously, it is not an idle threat.

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