In what has become an under-reported scandal, Bolivia's new government not only wants the Pension funds stock handed over to it, without payment, it just passed a decree that threatens to take over any fund that does not obey its order to unilaterally transfer the stock to the government directly, without any compensation.
VP Garcia Linera, who emitted the decree, also made verbal promises that the old-age pension, Bonosol, will be paid by the government, substituting for the dividends that the pension funds ownership interest in the capitalized oil and gas companies. This is the second decree that the government emits in this respect, and as the pension director pointed out, nowhere in Bolivian laws, including the hydrocarbon laws, does it authorize the government to simply seize these assets without compensation.
In one fell swoop the government will empty out most of the equity of the pension fund. It is undisputed that the airline privatization was a disaster, most of the value is in this ownership interest in the oil fields, valued by Bolivia's ministry in 1.5 billion dollars.
The point of this whole exercise was to keep the state from doing such short-sighted things. And if it did so, to pay the fair market value of the shares, and leave it in trust for the Bolivian people.
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