Windfall profits tax proposals are nothing ?

The Bolivian president, Evo Morales’s May Day decision to send in troops to “occupy” the country’s oil and gas fields has, predictably, upset foreign investors in South America’s poorest country. The decision to re-nationalise – Bolivia’s hydrocarbons industry has twice been nationalised before – confirms the worst fears they had when Morales came to power in January following his landslide election victory a month earlier. The two largest firms involved – Brazil’s Petrobras and Spain’s Repsol – have made clear their disquiet. Up until now, a good deal of ambiguity has surrounded the notion of nationalisation, but the government consistently made clear its determination – at the very least – to force foreign companies to sign new contracts, abrogating those signed at the time of privatisation in 1996. It is now clear that these will be service contracts, and that control of the industry and reserves will be in the hands of the state.