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Since
the privatization of the oil and gas sector in 1996, Bolivia has found
large reserves of clean natural gas, which people hope will contribute
to the development of the country, both through exports and through
cheap energy for domestic markets.
However,
unless public natural gas revenues are invested carefully with
redistributive goals in mind, our research indicates that the gas boom
will tend to create more inequality, and depress other export sectors
(mainly modern agriculture and mining).
So far, there has been little discussion about how to invest the
revenues well in order to maximize the long run developmental impacts,
but instead a lot of fighting about the distribution of revenues.
After years of demonstrations, blockades, violent clashes between
military and demonstrators, and several overthrown presidents, the
country
decided
to nationalize the oil companies again for the third time in
the last 100 years. Depending
on how the nationalization is carried out, it may discourage further
private investment, not only in the hydrocarbon sector, but in all
sectors.
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