Bolivia's Selective Nationalizations

The Bolivian government announced June 10 that it will nationalize all deposits in the Colquiri tin and zinc mine. The decision follows a June 3 statement from President Evo Morales urging all governments, including his own, to nationalize their mineral extraction industries and their utilities.

Morales' rhetoric aside, a local dispute led to the decision to nationalize Colquiri: On May 30, security forces clashed with members of the 26 de Febrero mining cooperative, leaving 15 people injured.

Because Bolivia requires an inflow of foreign capital to keep mineral production online, the country cannot afford the comprehensive nationalization Morales is advocating. The ongoing dispute is typical of business operating conditions in Bolivia, and the government has demonstrated consistently that nationalization is a preferred method for conflict resolution — not a national policy objective. Mining and utilities companies are particularly vulnerable to having their assets nationalized.