Bolivia issues an ultimatum

Dan Grech Aug 14, 2007


Doug Krizner: Bolivia is a poor country, rich in resources, particularly natural gas, but it doesn’t have the money to get the gas out of the ground. So it’s invited foreign firms to help. They’re being criticized for moving too slowly, and now Bolivia’s issued an ultimatum. From the Americas Desk at WLRN, Marketplace’s Dan Grech reports.

Dan Grech: Bolivia wants to expand its capacity to sell gas, and it needs the foreign firms to get there.

So the ultimatum’s this: Submit an investment plan by next Monday or get out.

John Williamson is with the Peterson Institute for International Economics. He says this is canny negotiating by Bolivia, but it can be tricky for a business.

John Williamson: Once it’s committed itself to that investment plan, then you have something to measure its performance against. Or else, it announces that it’s not going to do anything, and then you have a ready made excuse for kicking it out.

Chances are good that foreign firms will oblige.

The Spanish oil and gas giant Repsol YPF has committed to investing $900 million through 2010. Brazil’s Petrobras, Britain’s British Petroleum, and France’s Total are expected to follow suit.

I’m Dan Grech for Marketplace.

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