Bolivia nationalises electricity companies

In 2006 President Evo Morales nationalised the Bolivian oil and gas industry. Last year his government took over a subsidiary o BP which supplies jet fuel and on May Day Mr Morales announced the nationalisation of Bolivia’s four major electricity suppliers.

Bolivia, named for a hero who liberated a continent, is a small landlocked nation in the high Andes. Its ten million people with a poverty level of 60% have one of the lowest accesses to electricity in Latin America.

The four electricity companies that have been nationalised have virtual monopolies in their regions.

Mr Morales has already enacted a “dignity” electricity tariff. If your consumption is lower than 70kWh a month in towns and less than 30kWh a month in rural areas, you get a 25% discount, thereby rewarding those that consume less electricity and helping the poor.

Some reports attribute the motive for nationalisation as part of a redistribution of wealth policy, but I think those reports are wrong. Mr Morales thinks that basic resources and utilities should not be owned by private businesses, but controlled by the state. I agree with him.

I expect that after a period of negotiations the former owners will be compensated for their loss, and that being the case I think Bolivia has made a logical and sensible decision.

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