So it Begins... or Continues, in an endless downward spiral

Bolivia continues to face difficulties. Traditional patterns of FDI can certainly be abused, particularly with regards to sending all the profits home. But models do exist for real development through FDI--look at Ireland, Singapore, India... unfortunately, the nature of Bolivia's prime assets--primary goods--does colour the equation quite a bit and increase the difficulty of the situation. However, higher taxes and overtures to nationalisation are almost never the solution--Bolivia is not naturally in a position to substitute ISI pattern growth for an ever dwindling FDI supply. It MUST find another solution, because no real development can occur just sitting on the reserves--and right now, it looks like that's all they'll be doing.

Foreign Gas Companies in Bolivia Face Sharply Higher Taxes - New York Times: "LA PAZ, Bolivia, May 17 - President Carlos Mesa's government allowed passage of a bill on Tuesday that will sharply raise taxes on foreign energy companies, a move officials hope will defuse mounting protests from groups that want Bolivia to squeeze the big multinationals that have flocked to this poor country.

Noah Friedman-Rudovsky for The New York Times
Bolivian miners blocked a road on Tuesday to demand nationalization of energy companies. Years of protest have eroded foreign investment.
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Jose Luis Quintana/Reuters
Marchers in La Paz demanded nationalization of foreign energy companies.But the decision by Mr. Mesa, who has bowed repeatedly to demands from protesters in his 19-month term, appeared to placate few. Foreign oil companies say the law is financially onerous and will prompt them to cut back on investments, and the influential Movement to Socialism Party, led by Evo Morales, has promised more protests, contending the law is too soft on the companies."