Sunday, May 24, 2009

Ecuador - Resource Nationalism

Ecuador's President Rafael Correa said on Saturday that key sectors of the economy, including oil and mines, must be in government hands.

During his first two years in office Correa has taken a tough stand with mining and oil companies, pushing for new contracts more favorable to the state, but has so far shied away from nationalizing any firms.

"We will fulfill the goal of having strategic sectors in government hands," Correa said.

The U.S.-educated economist has recently said he will not nationalize foreign oil companies, but will push for more state control in the key industry via new contracts.

During a joint news conference with his Ecuadorean counterpart, Venezuelan President Hugo Chavez said his drive to nationalize strategic sectors of his own country's economy would continue.

Many sectors of Venezuela's economy, including energy and telecommunications, have passed into state hands since Chavez took office 10 years ago. In recent weeks he has nationalized oil service companies and iron producers.

Chavez also said that Venezuela and Brazil were in talks to create a joint fund worth billions of dollars. It is likely it would be for infrastructure investment.

"One of the subjects we will discuss is the creation of a joint strategic fund ... worth billions of dollars," said Chavez, adding the fund will have funds from the Brazilian Development Bank, BNDES. He said he will meet with Brazilian President Luiz Inacio Lula da Silva next week.

He said earlier his country and Ecuador had signed a deal for a joint fund for investment in energy projects.

Source - Reuters


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