Three Spanish-owned airports were nationalized this week in Bolivia.
A Spanish firm, Sabsa, had a contract to operate the airports in La Paz, Santa Cruz and Cochabamba until 2025.
Bolivian President Evo Morales justified the takeover, by suggesting that the airlines weren’t spending enough on infrastructure, but Sabsa has reported that it was operating at a loss due to forced salary raises of 140% since 2005, and a freeze on airport tariffs.
In a stark image of authoritarianism, police were even ordered by Morales on Monday to occupy corporate offices of Sabsa, and control of the company was given to the Ministry of Public Works, Services and Housing.
On Thursday, just days after nationalizing the multimillion dollar airport firm, Evo Morales assured foreign companies that their investments in Bolivia are “guaranteed” during a press conference for the United Nations. Sabsa is asking for $90 million in compensation.
Presumably, Morales was attempting to calm international concern about the rule of law, as Bolivia continues to rely heavily on foreign investment, particularly in the energy sector, for infrastructure, technology, and expertise.
Bolivia ranked 156 out of 177 countries in the Heritage Foundation’s 2013 Index of Economic Freedom; just edging out Ecuador, Argentina, and Cuba regionally.