Spain demands payment for Bolivia asset snatch
Source: AFP
Spain demanded fair payment Wednesday after Bolivia snatched Spanish firm Red Electrica's local grid, a second blow to the nation's foreign investments in Latin America.
Bolivian President Evo Morales's expropriation came just 15 days after Argentina's much larger nationalisation of oil giant Repsol's YPF subsidiary, which triggered an outcry in Madrid.
It sparked fears that other populist Latin American governments, especially those facing elections, could follow suit, and led to a warning from Europe that world investment may be affected.
Pressure grew on Madrid to take a tough stance to deter raids on other Spanish companies, which provide crucial support to the recession-bound economy.
Read more: http://news.yahoo.com/spain-electric-grid-shares-fall-bolivian-takeover-075234014.html
MNBrewer
(8,462 posts)Investments are RISKS. There is no reason that investors deserve a return.
Warren Stupidity
(48,181 posts)DetlefK
(16,423 posts)Quote from article:
"What the Bolivian government guaranteed is that it will compensate the firm for the costs invested in the electrical grid," De Guindos said on the sidelines of a finance meeting in Brussels.
Costs invested in the electrical grid? What's covered by this?
The cables?
The administrative set-up and the control system?
Installations, real estate, machines, devices, tools, spare-parts?
The costs, brain-power and experience that got the whole system running?
I can't believe the comments I'm reading here.
It's apparently okay to steal your laptop, as long as I compensate you for the cost of the electronics.
Warren Stupidity
(48,181 posts)But of course what is mostly left out of the discussion is the back story. Bolivia was one of several neoliberal experiments in privatization in the 90s. The public sector services, including the electric power infrastructure, we're carved up and sold off under IMF direction. This is an undoing of a past injustice. You can complain about the compensated relationalization of Bolivia's resources and basic infrastructure, and call it theft, but we know who the thieves are.
4th law of robotics
(6,801 posts)countries generally decide that whatever they're doing is just fine.
If this were being done by another nation to a Bolivian company I imagine they'd be screaming about it too.
Comrade Grumpy
(13,184 posts)Oh, dear, those populist Latin Americans are taking their assets back! Let's threaten them.
Warren Stupidity
(48,181 posts)Oh wait, never mind about the shit in Bolivia.
jberryhill
(62,444 posts)provis99
(13,062 posts)fasttense
(17,301 posts)What about our eminent domain laws? They are very similar to what Bolivia did only in our country they steal from the little guy and give it away to corporations and the uber rich. How about when the FED nationalizes corrupted banks that are going bankrupt? Is that any different?
Do you really believe that Communist China wont do the exact same thing with all those American factories in their county if given a reason? Stupid corporations think they have a blanket agreement with corrupt governments to steal from We The People. And sometimes We The People get justice, but not often.
Good on Bolivia.
hack89
(39,171 posts)took control of a business and continued to operate that business?
Warren Stupidity
(48,181 posts)1917-1920.
And:
1862: The Legal Tender Act nationalized the monetary system under fiat currency.
1863: The National Bank Act nationalized the banking system and further monopolized the money supply.
1939: Organization of the Tennessee Valley Authority entailed the nationalization of the facilities of the former Tennessee Electric Power Company.
1971: The National Railroad Passenger Corporation (Amtrak) is a government-owned corporation created in 1971 for the express purpose of relieving American railroads of their legal obligation to provide inter-city passenger rail service. The (primarily) freight railroads had petitioned to abandon passenger service repeatedly in the decades leading up to Amtrak's formation.
1976: The Consolidated Rail Corporation (Conrail), another government corporation, was created to take over the operations of six bankrupt rail lines operating primarily in the Northeast; Conrail was privatized in 1987. Initial plans for Conrail would have made it a truly nationalized system like that during World War I, but an alternate proposal by the Association of American Railroads won out.
1980s: Resolution Trust Corporation seized control of hundreds of failed Savings & Loans.
2001: In response to the September 11 attacks, the then-private airport security industry was nationalized and put under the authority of the Transportation Security Administration.
2008: Some economists consider the U.S. government's takeover of the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association to have been nationalization (or renationalization).[28][29] The conservatorship model used with Fannie Mae and Freddie Mac is looser and more temporary than nationalization.[30]
2009: Some economists consider the U.S. government's actions with regards to Citigroup to have been a partial nationalization.[31] Proposal was made that banks like Citigroup be brought under a conservatorship model similar to Fannie Mae and Freddie Mac, that some of their "good assets" be dropped into newly created "good bank" subsidiaries (presumably under new management), and the remaining "bad assets" be left to be managed under the supervision of a conservatorship structure.[30] The U.S. government's actions with regard to General Motors in replacing the CEO with a government approved CEO is likewise being considered as nationalization.[32][33] On June 1, 2009, General Motors filed for bankruptcy, with the United States investing up to $50 billion and taking 60% ownership in the company. President Obama stated that the nationalization was temporary, saying, "We are acting as reluctant shareholders because that is the only way to help GM succeed"[34]
hack89
(39,171 posts)1. the first two have nothing to do with the government running commercial banks. It involves the establishment of the national banking system.
2. Amtrak came about because of the imminent collapse of passenger train service. The government did not seize a commercially viable company. Much of its acquisitions came through the bankruptcy of privately owned companies.
3. CONRAIL also involved the government buying the assets of bankrupt private companies. It was turned over to private investors 11 years later. Like Amtrak, it only came about due to the imminent collapse freight train service.
4. Resolution Trust Corporation did not run savings and loans. It was a mechanism to sell the assets of failed and insolvent savings and loans.
5. The TSA did not nationalize any private security companies.
Of the rest, I will give you the TVA even though it is very localized and never replicated elsewhere.
Warren Stupidity
(48,181 posts)You asked. You got the answer: many times. Now you are often working definitional arguments to avoid the answer.
The national banking system abolished (via nationalization) private currencies. Rather huge.
In both AMTRAK and CONRAIL your complaint is that they were in financial trouble. So what?
RTC took over - nationalized - essentially the entire S&L industry.
The airport security industry was private until 2001. The TSA nationalized the industry, a fact that all the neolib market fundies now regret and want to undo. Your argument would be better with the irrelevant "but it was wartime" that you used for the US Rail case.
hack89
(39,171 posts)Is that the US did not reneg on an agreement with a commercial entity to seize a viable commercial enterprise.
Bolivia will pay a high price this. That's all.
Warren Stupidity
(48,181 posts)"So you can point out in America where any government at any level took control of a business and continued to operate that business?".
The answer was given. "Yes, Many times." Next time try google first.
hack89
(39,171 posts)then there is not much I can do.
Lets remember what the thread is about.
Next time I will try to keep things black and white for you.
Ash_F
(5,861 posts)...as they struggle to placate the bad guys.
hack89
(39,171 posts)Does Spain expecting a government to not break contracts make them the bad guys?
Ash_F
(5,861 posts)brought about through undemocratic corruption and violence makes someone the badguy. Yes, Spain are the bad guys.
PS - How's that for black and white?
hack89
(39,171 posts)I see the emotion - how about some facts?
hack89
(39,171 posts)Ash_F
(5,861 posts)Bolivia shouldn't give Spain a red cent.
hack89
(39,171 posts)steady decline in production as their infrastructure decays because they do not have access to foreign capital or expertise.
Bolivia needs foreign investment - they are not a rich country.
Ash_F
(5,861 posts)as will Bolivia. Thank you.
when you consider Venezuela is becoming an economic basket case. You can't depend on a global economy on one hand and poke your global trading partners in the eye on the other.
rayofreason
(2,259 posts)...stock in any company that invests in Bolivia in your retirement account? That would make you the "bad guy", and there is a chance that the Bolivian government would decide that, since you are the "bad guy", they can seize the investment without compensation. That would negatively affect your stock and reduce the amount of money you have for retirement.
Let me assume that you are a rational person. Under those circumstances you would not want any of your retirement funds invested in Bolivia. You would want them invested in places where your property is secure. I, for one, would not invest in Bolivia. Nor would I buy Greek bonds. Apple computer - good, safe buy. And doing well too.
If you are a responsible fund manager, say for a union pension fund, you would definitely not invest money in a country where the property is not secure. Nationalization of assets might mean that union members would not be able to get their pension payments, a very bad outcome indeed. In fact, I would bet that the there are many Spanish workers whose pension plans had a stake in this investment. After all, how do you think retirement works? You save, and invest those savings and how they grow so that when you retire you can use the investment account to pay for your expenses.
Unless Bolivia comes to a mutually agreeable compensation for the nationalization of this property, those Spanish people who property is being seized will be financially damaged and everyone else in the world will think twice before investing in Bolivia.
Bolivia is a poor country that needs investment to develop its infrastructure. No one is forced to lend them money. Investors do that because they get something out of it. Now Bolivia will have to offer investors more in order to get them to risk their money.
Some people, of course, take the position that that is just exploitation. Fine. Bolivia doesn't have to borrow money from anyone and then it won't be exploited. It looks like it is moving in a direction that will produce that outcome. Good luck with that. And speaking of good luck, here is a quote from Robert Heinlein, the science fiction author:
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded here and there, now and then are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as bad luck.
may3rd
(593 posts)They have to save face with the EU banktards
jeanmarc
(1,685 posts)You're just renting it with the idea that you own it. A gov't can snatch up your assets any day.