BOLIVIA: President Morales - One Year in Charge

Of most interest to Australian investors are the Government’s plans for the mining sector.

President Evo Morales continues to lead South America’s poorest country, more than a year after his historic election victory in December 2005. For a country with four presidents in the four preceding years, Morales’ tenure represents a degree of stability. His vote was surprisingly broad-based, but strongest in Bolivia’s indigenous and poorer communities. In the 14 months since his inauguration, Morales’ Government has convened a constituent assembly designed to rewrite Bolivia’s constitution, overseen a period of rapid economic growth and structural budget surpluses, and faced calls for greater autonomy from wealthier, lowland provinces.

On the economic front, much attention has been drawn to the Government’s nationalisation policies, which have spread in one form or other to Bolivia’s hydrocarbons, telecommunications, electricity and rail sectors. Of most interest to Australian investors are the Government’s plans for the mining sector, where Australian companies are present as direct operators of mining concessions, or suppliers to other mine sites. Bolivia’s plans for the sector have not yet been fully articulated; however in January, Morales sent a proposal to Bolivia’s Congress involving a number of measures, including large increases in mining royalties for foreign companies.