BOLIVIA

1980s and 1990s: Bolivia introduced free market reforms, mainly concerned with increased privatization, in order to continue to receive funding by the World Bank. Investors, usually foreign, were able to acquire ownership up to 50% of public capital.

....as a result of this :

• high income inequality
• frequent gov. changes as people called for change

threat 1: high presence US       economic power in the region

Argument:

• Trade with Columbia and Peru has decreased significantly after they entered into trade agreements with US. US subsidized food is undercutting the market for Bolivian goods.

Action taken:

• Bolivia signed a people's trade agreement with Columbia and Peru. Peru imports Bolivian goods at market prices now and Columbia has agreed to supply oil to meet the domestic shortage.

threat 1: high presence US       economic power in the region

Argument:

• The US is fighting a drug war in South America and wants to end coca production to end the production of cocaine. Bolivia is against illegal drug trade but wants to continue coca production as many Bolivians rely on it for income.

Action taken:

• Legal coca product production being promoted and those unemployed due declining demand foe coca receive support in finding new job. The Bolivian government announced that it wanted to create 360 000 jobs by 2010 but fell short due to financial crisis.

threat 2: the exploitative actions of TNCs for people and environment 

Arguments:

• Even though Bolivia has large national gas and oil reserves only small amounts are being used domestically. Brazils state-controlled oil company Petroleo Brasileiro SA produces 70% of Bolivia's natural gas and sells it for inflated prices.

Action taken:

• Morales nationalized the the country's gas and oil industry. Now, 82% of the oil and gas is controlled by domestic firms and oil/gas from foreign firms is distributed and processed by a state-run company (YPFB).

threat 2: the exploitative actions of TNCs for people and environment 

Arguments:

• The government has little resources and power to control foreign direct investment. It can not address the income inequality it is facing.

Action taken:

• Alike Norway, they have taken control of their natural resources and are attempting to generate revenues that would allow them to fund much needed development. Furthermore, while foreign direct investments continue to be encouraged, the government is taking a bigger role in controlling the economy.