Steinmeier Concerned About Bolivian Nationalization Plans

After Bolivia announced on Monday it was nationalizing its oil and gas industry, German Foreign Minister Frank Falter Steinmeier, at the start of his South American tour, said he was concerned by Bolivia's decision.

According to Steinmeier, the recent developments in Bolivia could not be seen as a positive starting point for building up trade relations with the neighboring countries or Europe.

"This will certainly make investors think twice before they start building economic relations in the direction of Bolivia," Steinmeier said.

Bolivian top military commanders announced the seizure of 56 oil and gas fields moments after President Evo Morales formally decreed nationalization of the country's oil and gas operations, which had been expected.

"The state is recovering its property, the possession and total and absolute control of these resources," Morales said at a May Day speech at San Alberto gas field in southern Bolivia.

Morales called on the country's "patriots" to "mobilize against any effort by any company to sabotage" the nationalization. Bolivia has the second-largest gas reserves in South America.

A friendly tour

During his tour of Latin America, which will include trips to Chile, Argentina and Brazil, Steinmeier is expected to discuss political and trade relations after a number of countries in the region have elected left-leaning governments in recent years.

According to Germany's foreign ministry, Steinmeier's visits to Chile, Argentina and Brazil are intended to foster this country's strategic partnership with Latin America. Foreign ministry spokesman Martin Jäger played on the World Cup motto -- a time to make friends -- to sum up the overall theme.

"If one were to create a specific motto for these visits, then it could well be 'being hosted by friends,'" Jäger said.

Successive German government and business leaders have, indeed, been eager to maintain close relations with countries in the region even in difficult times of dictatorship and economic degradation.

A star economy

In Chile -- Steimeier's first stop on Tuesday -- the German foreign minister will meet with newly-elected president Michelle Bachelet. The head of the center-left coalition (and Chile's first woman president) spent many years in former communist East Germany where she found political asylum during the military dictatorship of Augustus Pinochet in the 1970s.

The German foreign minister will pay tribute to the victims of the military coup by visiting the infamous "Villa Grimaldi" prison where thousands of Chileans were tortured and disappeared.

Today democratic Chile has become Latin America's star economy with annual growth rates of more than 6 percent. According to Claudia Zilla, a Latin America expert at the Berlin-based Science and Policy Research Foundation, the country's economic development coupled with a stable government is hugely attractive for foreign investors.

"Chile has achieved continuity in its political process, which is based on consensus within society as a whole," Zilla said. "Chileans have been able to create stable political conditions because people there have reached fundamental agreement on common political and economic goals."

Getting the house in order

In Argentina, president Nestor Kirchner is only just beginning to get his country in order after a disastrous collapse of the economy and state finances five years ago. In his talks with Steinmeier and the German business leaders accompanying him, he will try to convince them that Argentina is again a safe place to invest in.

"It's important to remember that not a single German company deserted Argentina during this huge crisis," said Barbara Konner, who is the Latin America spokeswomen of the German Chambers of Commerce and Industry. "This shows that these companies are still full of hope and confident that the economy there will soon pick up steam again."

International ambitions

In Brazil, the German foreign minister's talks with President Lula da Silva will also focus on bilateral trade as well as the two countries' efforts to play a more prominent role in the United Nations.

Germany and Brazil have teamed up with India and Japan in a bid to become permanent members of the United Nations' Security Council. But Steinmeier's visit to the country may also be welcome by the leftist Brazilian president as he is seeking to shore up his political fortunes ahead of October's presidential election.