Bolivia needs investments to exceed the deep economic crisis that it is going through. As many experts have pointed out, part of the solution of this crisis is to attract foreign investment in different sectors of the economy. The country already has experience in this area; Since 1986 the governments called “neoliberals”, with success and patriot commitment the entry of foreign investments into various areas. This resulted in the increase in gas production and export and the growth of other sectors, such as mining and agriculture.
Foreign investment requires an adequate legal framework, with international and internal standards that, in addition to motivating, grant legal certainty to both investors and the country receiving investments.
From the Washington consensus, an economic model was imposed by multilateral organizations such as the World Bank and the International Monetary Fund. Under that umbrella, worldwide, the signature of bilateral treaties on investments (TBIS) was promoted, also called agreements for the promotion and reciprocal protection of investments (APPRIS). According to the United Nations Conference for Commerce and Development (UNCTAD), all of the world’s countries signed about 2,300 tbis; Even those countries with critical governments to the policies of financial agencies, such as China that signed 129 Tbis, Russia 64 Appris, Cuba 51, Iran 61, among others.
The TBIS or APPRIS are agreements arranged by two states, in order to promote and protect national investments of a contracting state in the territory of the other contracting state. Between 1987 and 2002 Bolivia signed 23 tbis with countries from various continents and adapted its regulatory framework to that purpose, under whose protection many foreign investors invested in Bolivia.
The tbis should not be satanized as the MAS did and the radical activists detractors of foreign investment, since the legal matrix of these treaties is harmony with important international instruments that protect the rights of sovereign states, such as the letter of rights and economic duties of the states, approved by resolution 3281 of the NNUU AG, whose text establishes that “states have full sovereign Dictate measures of nationalization or expropriation, provided that they pay appropriate compensation, taking into account their applicable laws and regulations and all the circumstances inherent to that measure ”, this provision agrees with resolution 1803 also of the NNUU AG of NNUU relative to the“ permanent sovereignty on natural resources ”that protects the right of states to enjoy, enjoy and dispose of free and sovereign of their natural resources.
Since 2006, the beginning of the MAS cycle, the opening policy to foreign investment changed completely. The Political Constitution promoted by the MAS and approved in 2009 introduced regulations that in addition to discouraging foreign investment, opened space to denounce the Tbis, promising a subsequent renegotiation, which never specified.
In this logic of nationalizing the economy, the Government of Evo Morales began the process of nationalizations and expropriations of the investments managed by the governments that preceded it. These measures against foreign investment generated millions of losses that have not yet been quantified, product of poor negotiations, poorly administered arbitrations and/or permeability in the government bureaucracy.
In thus, unfortunately, nationalized or expropriated companies often carry out excessive requests covered in the long notion of investment, seeking remuneration that are not real, which frequently derives in arbitration demands that request millionaire compensations for payment of the reversal investment, damages and damages caused, alleged unemployed profit, emerging damage and costs of the arbitration process.
Regarding the arbitrations faced by the Bolivian State, remember that Law 1770 of arbitration and conciliation approved in 1997 was repealed by the MAS and replaced by a new law (708) that incorporates a clause that allows evading the obligation to transparent the arbitrations on investments. What the International Standard (CNUDMI) established as a rule (transparency and advertising in arbitrations on investments) the most legislated it as an optional exception to the political interest of the bureaucracy.
It is clear that the objective was to prevent the Bolivian citizen from knowing information about international arbitrations that were established against the State following nationalizations. In this way, all information about the arbitrations was kept as a state secret, that is: demanded amounts, compensation paid to investors, fines, damages and damages, fees of the referees, coasts, etc. Let us remember some controversial arbitrations: Entel (Eti Euro Telecom) Guaracachi SA (Rurelec), Quiborax, Pan American Energy, South American Silver, Red Eléctrica de España (Ree), Jindal and others.
With their antineoliberal rhetoric, they also denounced the International Agreement of Arrangement of Differences Relating to Investments (CIADI) arguing that when the CIADI being a World Bank Agency, it was an enemy of the Investment Receiving Countries. Nothing more false, since the UNCTAD has provided data that realizes that in most arbitration cases CIADI rejected the claims of investment companies.
The nationalizations arranged by the MAS government did not report any benefit to the State, but rather millionaire losses derived from the aforementioned arbitration demands. This disaster that severely affected the economy of Bolivia did not flinch Evo Morales or its Minister of Economy Luis Arce Catacora, since the arbitration costs were solved with the gain that by then reported the gas contracts and the exports managed during the governments called neoliberals. Of course, he who does not work does not know what it costs! The fruits of the work and effort of the neoliberals enjoyed them and won them the socialist leadership of the MAS.
We will have to start again and to face the serious economic crisis that overwhelms us we must manage efficient and reliable foreign investment. For this, the new government must show a country with political stability, with efficient governance, with solid and incorruptible public institutions, with guarantees and administrative, legal and judicial security; that is to say a country with a rule of full, healthy and attractive law for investments.
