MIAMI, Nov. 1 (UPI) -- Bolivia has completed the controversial effort to nationalize its gas industry, a process not nearly as drastic as many had feared, as several foreign companies will still operate under the watchful eye of the leftist government.
Shortly after the stroke of midnight Sunday, Morales signed a deal with eight foreign companies, including firms from neighboring Brazil as well as Spain and France, whereby Bolivia would increase its take from two of the country's most lucrative gas fields from 50 percent to 82 percent.
Morales, who made gas nationalization the top priority during the first nine months of his administration, said Bolivia would no longer be a "beggar state," and that he would continue the country along the path to "recovering its natural resources."
He suffered a setback Tuesday, however, when he announced the nationalization of the country's mining industry would have to be put on hold due to federal financial restraints.
Nationalization talks between the Bolivian government and foreign firms have been at times tense. Following its May 1 decree that Bolivia's state firm Yacimientos Petroliferos Fiscales Boliviano, or YPFB, would take over a majority share of the industry, Bolivia has battled with its foreign investors over the percentage stake it would take.
Officials with Brazilian state energy firm Petrobras initially balked at the notion of delivering a large portion of their profits to Bolivian coffers. But during the talks leading up to Sunday's signing, Brazilian President Luiz Inacio Lula da Silva reiterated his respect for Bolivia's right to handle its energy affairs as it saw fit.
Brazil had by far the most to lose in Morales' nationalization agenda, having invested some $1.5 billion in the country since the industry was privatized in 1996 by President Gonzalo Sanchez de Lozada, who was forced from office in 2003 amid violent protests over the country's handling of its gas industry.
Petrobras officials have vowed to halt any additional spending on the Bolivian industry.
Though Morales appears to have achieved his goal, the effort to return control of the gas industry to the Bolivian state was not without its share of setbacks.
Officials conceded in August that nationalization might be more difficult than initially envisioned after the Bolivian Central Bank turned down a loan request by YPFB for $180 million so that it might assume complete control of country's gas reserves, second only in South America to those in Venezuela.
The bank turned down the request, citing Bolivian law, which states that public institutions are only eligible for loans in a time of crisis.
"These are the financial constraints that everyone knew about," Eurasia Group analyst Christopher Garman noted at the time. "Now they are starting to kick in."
Morales opponents meanwhile took the opportunity to condemn the decision once again, saying the nationalization decree was merely a political maneuver aimed at appeasing those who elected Morales.
The leftist leader loathed by many Bolivian opposition lawmakers has had to make some concessions regarding his nationalization ambitions in light of the setback with the bank and the stiff opposition he faces both at home and abroad.
The state share of Bolivia's foreign gas projects is less than the 100 percent hard-line leftists would like to see, a sign of recognition perhaps by Morales that continent's poorest country is far from ready to take on full responsibility for its No. 1 resource.
Bolivia lacks the necessary resources and technology to wage a complete takeover of the gas industry, analysts say. But it remains a success in its partial state considering the process will quickly inject Bolivia with much-needed revenue to jump-start Morales' social agenda in the coming years.
"It (the nationalization) was something Bolivia needed to do to generate revenue," Roger Tissot, an analyst with PFC Energy, told United Press International.
"It's a much lighter version of nationalization than everyone expected," he said.
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