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Bolivian Soldiers Walked Into This Spanish Power Company, Hung A Flag And Seized Control

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AP

LA PAZ, Bolivia (AP) — President Evo Morales announced Tuesday that his government is completing the nationalization of Bolivia’s electricity sector by seizing control of its main power grid from a Spanish-owned company.

Morales took advantage of the symbolism of May Day, the international day of the worker, to order troops to occupy installations of the company, a subsidiary of Red Electrica Corporacion SA.

The president’s placing of another of what he deems basic services under state control comes as neighboring Argentina moves to take control of the country’s oil company, YPF, from the Spanish energy company Repsol SA, which had held a majority interest.

Spain‘s ambassador to Bolivia, Ramon Santos, told reporters the electric grid takeover “is sending a negative message that generates distrust.”

Red Electrica is the sole operator of the transmission grid in Spain, and the Spanish government holds a 20 percent stake in the company.

Morales did not say how much the company would be compensated, but the nationalization decree says the state would negotiate an indemnization fee.

Morales said only $81 million had been invested in Bolivia’s power grid since it was privatized in 1997.

The government, meanwhile, “invested $220 million in generation and others profited. For that reason, brothers and sisters, we have decided to nationalize electricity transmission,” he said.

Bolivian soldiers peacefully took over the company’s offices in the central city of Cochabamba, hanging Bolivia’s flag across its entry.

Red Electrica had no immediate comment. A security guard reached at its headquarters in Spain said a statement was expected later.

The company owned 74 percent of Bolivia’s electrical transmission network, or 1,720 miles (2,772 kilometers) of high voltage lines.

Two years ago, on May Day, Morales’ government took control of most of Bolivia’s electrical generation, nationalizing its main hydroelectric plants.

Morales, Bolivia’s first indigenous president, has moved to put energy, water and telecommunications under state control.

But analyst Joao de Castro Neves of the Eurasia Group said the president has been far more pragmatic and less radical than the leftist leaders of Venezuela or Argentina.

“He knows his limits,” Castro Neves said. “The Bolivian state doesn’t have the capacity to take over all these sectors (including mining) and maintain the high levels of investment they need.”

He noted that Morales still hasn’t come to terms for taking over several small mines whose nationalization he announced last May Day.

Bolivia’s government also has not been able to negotiate compensation for the power plants taken from GDF Suez of France and Rurelec PLC of Britain.

Morales continues to deal with multinational companies such as Brazil’s oil company, Petrobras, and Repsol, whose president, Antonio Brufau, he met with on Tuesday after announcing the power grid takeover.

The two men inaugurated a $528 million natural gas plant in eastern Bolivia that represents the single biggest foreign investment in the country under Morales. It is designed to triple the amount of gas sent to Argentina and the local market to 9 million cubic meters a day, said Carlos Villegas, president of Bolivia’s state energy company, YPFB.

In the case of electricity, the government is following a policy of returning to the public domain a sector privatized during the 1990s.

“Just to make it clear to national and international public opinion, we are nationalizing a company that previously was ours,” Morales said.

The 20 percent of the industry the government does not own is in the hands of small companies serving cities in the eastern lowlands that are not connected to the national grid.

In his first year in office in 2006, Morales announced he was “nationalizing” the oil and gas sector. He began extracting concessions from multinational energy companies, renegotiating contracts to give Bolivians greater control of and a bigger share of profits from the natural gas industry, the country’s biggest ahead of mining.

In 2008, he used May Day to announce the completion of the nationalization of Bolivia’s leading telecommunications company, Entel, from Telecom Italia SpA

The nationalizations have not saved Morales from widespread criticism by Bolivians upset over rising consumer prices, lower domestic oil production and discontent over government plans to build a highway through a lowlands nature preserve inhabited by Indians.

Morales’ approval rating is down to about 40 percent from 69 percent when he began his second term in January 2010.

Read more: BI

Obama Hits Iran-Venezuela Ties. Now What?

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Posted By José R. Cárdenas

One certainly hopes that President Obama’s recent criticism of Iran-Venezuela relations indicates a new willingness on the part of his administration to confront the growing menace of the radical Islamist regime in the Western Hemisphere.

In comments submitted to the Venezuelan newspaper El Universal, the president said that Hugo Chávez‘s ties to Iran “have not served the interests of Venezuela or the Venezuelan people” and expressed concern about his anti-democratic behavior and his failure “to contribute to the security in the region.”

“Here in the Americas,” he said, “we take Iranian activities, including in Venezuela, very seriously and we will continue to monitor them closely.”

The president’s comments came on the heels of further explosive revelations on the extent of Iranian subversion of U.S. interests in the region.  Earlier this month, the Spanish-language network Univision aired an investigative documentary,“The Iranian Threat” — the product of months of research — that included incriminating information on Venezuelan and Iranian diplomats in Mexico discussing waging cyberattacks on sensitive U.S. computer systems, including those of nuclear power plants.

Shortly thereafter, U.S. law enforcement officials revealed details of an investigation into a Lebanese bank in Canada that laid out Hezbollah’s sophisticated global money-laundering operations that includes direct involvement by senior officials in the lucrative South American  drug trade.  The revelations put the lie to the State Department’s long-repeated talking point that Hezbollah merely “raises funds” in Latin America for its operations in the Middle East.

Both reports drew sharp reactions from Capitol Hill, where a number of members have expressed deep dissatisfaction with the direction of the administration’s regional policy.  Senator Bob Menéndez (D-NJ), Chairman of the Senate Foreign Relations Subcommittee on the Western Hemisphere, said he would hold hearings on Iran’s destructive role in the region when the Senate reconvenes in 2012.

House Foreign Affairs Chairman Ileana Ros-Lehtinen (R-FL) said she would request the State Department to conduct its own investigation “into Iran’s deeply troubling partnerships with regional dictators such as Chavez, Morales, Correa, Ortega and the Castro brothers.”

(It bears noting as well that in the Nov. 22 Republican presidential candidates’ National Security Debate, the threat posed by radical Islam operating in the Western Hemisphere was featured prominently as a national security issue that official Washington was neglecting.)

Thankfully, it appears the steady drumbeat of concern about Iran and their Hezbollah proxies’ strategic push into the Americas has finally caught the White House’s attention.   To date, U.S. law enforcement agencies have had to confront this threat virtually alone.  It is time the entire Executive Branch foreign policy apparatus joins in, including the slumbering State Department.

Most importantly, it is time for ramping up actions to back up the president’s words.   This includes not only identifying more individuals, companies, and/or governments found to be aiding and abetting Iran and Hezbollah in their nefarious activities and bringing the full weight of sanctions against them, but also conducting a full-bore public diplomacy campaign for regional audiences on Iran’s intentions and activities in the region and the dangers for their societies therein.

To date, consorting with Iran has been a freebie for anti-American demagogues like Chávez, Ecuador’s Rafael Correa, and Bolivia’s Evo Morales.  The administration needs to move now to raise the costs.

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