Bolivia, the poorest nation in South America, is on the verge of adopting a new constitution. After approximately 500 years of rule by Europeans and their descendants, the country elected its first indigenous president, Evo Morales, in 2006. Morales has since worked to remove the inequalities stemming from the concentration of land and resources in the hands of a few wealthy families. You may be thinking, ‘That’s great, but for those of us who are not Bolivian, why does this matter?’

The most immediate answer is natural resources. As the supply of oil becomes increasingly unstable and consumers seek greener alternatives to gasoline power, lithium ion batteries are expected to take on a greater share of the power storage burden. Bolivia has approximately 50 percent of the world’s lithium reserves, along with a sizeable amount of the world’s tungsten, tin, antimony, and others — many of which are used in the creation of steel.

Companies including BMW, Mitsubishi and Michigan-based General Motors are currently developing electric cars that rely on lithium batteries; the GM Volt is slated to be released next year, and cell phones and laptops already use them. At a time when car buyers are few, lower lithium prices would contribute to a lower overall cost for the new electric cars and potentially drive higher sales.

Unfortunately, the leftward leanings of the Bolivian government have made it difficult for foreign companies to tap that country’s mineral resources, and given the complexity of lithium refinement, the Bolivians are not in a position to undertake the task alone on any great scale. In 2006, Morales announced the nationalization of oil and gas. As recently as January 23, the Bolivian government took control of a BP subsidiary. This will earn the government additional revenues, but given the potential for a nearly total loss of investments, few new companies are willing to venture into Bolivia. The resources lay unused while Bolivia and potential investors lose.

The seeming justice of nationalization, indigenous empowerment and land redistribution after hundreds of years of oppression is understandable but impractical. Saul Villegas, the official in charge of lithium extraction, only highlights the ridiculousness of the government’s position: “Maybe there could be the possibility of foreigners accepted as minority partners, or better yet, as our clients,” he told the New York Times this week. Bolivian miners are currently loading salt into trucks with shovels, and the government expects foreign companies to set up the industry, only to become minority partners while risking nationalization.

Bolivia’s indigenous population has had a longer period of exploitation than many other indigenous people, partially bankrolling Spain for hundreds of years and then the European-descended Bolivian elite after the country gained independence. But taking back the country and its resources overnight is not a good idea, nor does it excuse wishful thinking.

Granted, “imperialist” resource exploitation agreements impose unfair terms on the host countries, but they work in the long run to develop their economies. These agreements are what fueled the growth of the Middle Eastern oil kingdoms. When the sheikhs were rich in oil but lacked capital and drilling experience, these imperialist agreements helped to transform the oil under their feet into the cash that their nations were built upon.

Bolivia’s new constitution incorporates a land redistribution program that will wrest control of hundreds of square miles of land from the wealthy and transfer it to the state and the poor, but this will also destroy some of the country’s most productive farms. On the surface, indigenous empowerment may seem like a good thing. But after years of operating far behind modern methods of efficiency, empowerment will hurt the fragile economy of Bolivia, which is already in decline due to tumbling metal prices. Of course, it is the “empowered” (i.e., the indigenous people) who will suffer most and who may end up worse off than they were before.

Take the case of Zimbabwe. After the black majority took control of the country (then called Rhodesia) from the white minority in 1980, various black African factions engaged in a civil war. In the early 1990s, the country was gripped by political turmoil with state employees striking over low wages. By 1997, 36 percent of the population had HIV, and the land redistribution of 2000 transformed the country from a model of African agricultural efficiency into the site of a cholera outbreak and home of the $100 trillion Zimbabwean bill.

A large part of Zimbabwe’s plight is due to mismanagement and corruption, but a sense of entitlement along ethnic and national lines helped it to take root.

Luckily for Morales and Bolivia, Chavez and his oil money are there to help if the going gets tough. In the meantime, I’ll have to pay more for that new laptop battery.

Ibrahim Kakwan can be reached at

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