Foreign investors in Bolivia not shielded from road blockade fallout

Foreign investors are not immune to the economic effects of Bolivia’s road blockades, such as the latest one in Santa Cruz department over a dispute concerning the plans for the new Las Cruces-Buena Vista highway. 

Protests demanding the new US$200mn road resumed on Wednesday after a two-week pause, once again blocking what is the main link between Santa Cruz and Cochabamba, despite ongoing negotiations between the departmental government – which opposes one section of the road over environmental concerns – and national authorities, local news outlets reported. 

“These are situations that affect Bolivia’s entire commerce sector, both for local companies and foreign investors. In that regard there aren’t specific protections for foreign investment that can apply in the case of a conflict of this kind,” Dayana Hevia, a lawyer at Montt Group Bolivia, said in response to a question from BNamericas during a webinar held by the firm on the country’s regulatory framework for companies seeking to invest.

The previous protests in Santa Cruz, which lasted 11 days, left US$110mn in losses, and so far this year there have been over 100 demonstrations of this kind all over the country, according to Bolivia’s foreign trade think tank IBCE, which has also warned of the effects of blockades on economic growth and inflation.

The results of the talks between the national and Santa Cruz governments will be revealed on Friday, daily La Razón reported.

Authorities in La Paz are studying two options for the controversial road: either maintaining the current design but with stronger environmental mitigation measures, or drafting a new design, planning minister Sergio Cusicanqui told news outlet Unitel.

He added that the second option would further delay the project as it would entail new studies and possible new negotiations with financiers, which include Latin American development bank CAF and the OPEC Fund for International Development.