Mister Self Destruct

Bolivia is heading down the same path that Cuba took 40 years ago as Bolivia just went about nationalizing the gas wells and production facilities. No doubt expect the oil businesses to abandon Bolivia because of impending awful business climate. Val at Babalau Blog wonders what Bolivia will be like in a decade. It wont be pretty.

Laura at Ace of Spades has more.

As always, look at who else is pushing for these kinds of changes: Hugo Chavez and Fidel Castro. They're out and about looking for fellow travellers who can fight against the big bad United States, and the quickest and easiest way to do so is through oil (or so they think). These countries will have no problem bankrupting their people by nationalizing corporations operating in country, driving business out.

Some articles are more forthright in just who Morales is siding with:

Mr Morales' announcement fulfilled an election vow. Reconquering ownership of natural resources, he said, was "a fundamental means for recovering our sovereignty". The move solidified his role along with Venezuela's Hugo Chavez and Cuba's Fidel Castro in Latin America's new axis of populist leaders opposed to U.S. and corporate influence in the region.

The populist thing would be to have democratic governance, not the kleptocracy and totalitarianism that we see in Cuba and Venezuela. Chavez and Castro stay in power because they've managed to make the US the bogeyman for their own failed economic policies (if you can even call them policies).

Look no further than Brazil, which had significant oil interests in Bolivia. Expect blowback in the Brazilian-Bolivian relations. It's more than merely concerning. It's the taking of assets without compensation. Don't think that businesses (including state-run outfits) wont notice.

The energy markets have also taken notice.

UPDATE:
For a far more current example of how a economic situation can deteriorate when idiots, thugs, and despots rule the roost, look at Zimbabwe since the thug Mugabe came to power. They're now experiencing hyperinflation, and toilet paper is a luxury item. Bolivia can expect to see many of the same problems within a short period of time, as investments flee the country to safer havens.