The way in which the Bolivian government carries out the nationalization of its oil and natural gas industries will affect foreign investment and the health of the economy, the International Monetary Fund (IMF) said Thursday, reports the World Bank press review.
The decision of Bolivian President Evo Morales to nationalize the oil and gas industry May 1 “has potentially far-reaching economic consequences, IMF Director of External Relations Masood Ahmed said in a regular briefing.
– In terms of how those aspects are handled, it could have an impact on continuing availability of domestic and foreign capital in the production of carbon-based energy, which as you know is an important part of the Bolivian economy, Ahmed said.
The IMF, which has a team of experts in Bolivia, urged the new government to discuss terms of the plan with multinational companies in the coming six months. Ahmed said the talks should cover “discussions on the compensation for the nationalized assets, the nature of new operating contracts and possibly an increase in export prices to Brazil and Argentina”.
– Our view is that it is important that these negotiations lead to a mutually agreed arrangement that provides for a continued inflow for critically needed foreign capital, he noted.
Ahmed told reporters, that “Bolivia should consider how future investment in the sector will be affected by talks on how the nationalization will be implemented, including discussions on compensation and the nature of new contracts.
Ahmed said that over the next six months the Bolivian government and foreign companies – and in some cases their governments – will need to negotiate over the “specific modalities” for implementing the policy.
– Ensuring both domestic and foreign private investors continue to want to invest in Bolivia’s important hydrocarbon sector means the discussions should be done in a careful way, Ahmed commented.
Kilde: www.worldbank.org
