New York (MarketWatch) -- The South American shuffle isn't the latest dance craze in Latin America; it's the move by key countries on the continent to protect vast resources now in burgeoning demand.
The populist sentiment in South America is growing and leaders are listening -- especially those with vast resources. These countries feel they must act to protect and maximize value for the commodities in each nation. Drastic action has included nationalizing resources or offering ridiculously low profit splits. In some cases, 82% of profits go to the government and 17% to the company doing all the work. This is clearly an untenable situation for many companies doing business in Latin America.
Thanks for the help... now get out!
That should be the slogan at the chamber of commerce in Bolivia, and several of the other South American countries too. The most recent action, Bolivia's decision to nationalize oil and gas reserves, is just the latest in a move by several South American leaders to regain full control over their country's natural resources.
Making good on a campaign promise made earlier in the week, Bolivian President Evo Morales nationalized the country's vast oil and gas reserves, positioning military at oil and gas installations. The move sent shivers down the spines of chief executives whose companies sank hundreds of millions of research and development dollars into digging, drilling, and exploration. Now that the resource pi�ata is full of goodies, not only won't they get a swing at it -- they aren't even invited to the fiesta.