New Delhi: For the first time since establishing diplomatic relations with India, Bolivia has sent a high-level ministerial delegation to the country.
Bolivian defence minister Reymi Ferreira Justiniano was invited by his Indian counterpart, Manohar Parrikar, to attend the DefExpo in Goa. His colleague in the visiting delegation, minister for development planning René Orellana, had the responsibility of lobbying Indian investment – with the hope of banishing the lingering shadow of the dispute with Jindal Steel.
Orellana told The Wire that a settlement with the Jindal group was “almost finished”. This could mark the end of the legal process that began when the Bolivian government seized Jindal’s guarantee after the Indian firm withdrew from the project to develop one of the world’s largest iron-ore reserves at El Mutun, the largest ever Indian investment in Latin America.
While pulling the plug on the $2.1 billion project in 2012, Jindal claimed they had not got access to the land promised. The Bolivian government had accused Jindal of deliberately going slow and not keeping to the promised roadmap. In 2014, the Paris-based International Chamber of Commerce gave three arbitration rulings in favour of the Jindal group, including an award of $22.5 million. At that time, there were reports that the Bolivian government would challenge the ruling.
Meanwhile, China, despite its economic downturn, continues to make inroads into the land-locked Latin American nation. Three-term Bolivian president Eva Morales said that the red carpet for no-strings attached Chinese credit was part of his policy to reduce the influence of the US in the region. On March 30, China’s Sinosteel signed a contract with the Bolivian state-owned mining company to construct a steel plant at El Mutun with an investment of $422 million.
The diversification of investment sources is always a issue for a country rich in natural resources. India’s relatively stronger economic growth among the top economies has made others to seek investment from its private sector – and Bolivia is not an exception.
Bolivia has been growing at a rate of 5.1% in the last 10 years, but is projected to grow at 5% this year. It has an ambitious multi-billion dollar public investment plan for the next decade, and wants foreign partners on this roadmap.
Bolivia set up a resident mission in India just four years ago. Last year, there was a 95% growth in bilateral trade to $314 million.
Aware that the fate of the Jindal group could be a big concern for Indian firms, the delegation also included Franz Zubieta, director for international arbitration at the Bolivian attorney general’s office. Zubeita also held discussions with Naveen Jindal on Wednesday to bring negotiations over the settlement to a close.
In his presentation at a seminar organised by the Confederation of Indian Industry, Orellana invited Indian capital to invest in developing Bolivia’s massive lithium deposits, which account for 60% of the world’s reserves.
The hydrocarbon sector was flagged as another area for investment, as Bolivia has the second highest per capita gas reserves. Orellana noted that Bolivia had also begun to supply electricity to its bigger neighbours, Brazil and Argentina.
Orellana met with railway minister Suresh Prabhu, as Bolivia is keen for Indian investment in the coast-to-coast Bioceanic train corridor project.
Excerpts from an interview with Orellana:
What is the purpose of the visit to India of the first Bolivian ministerial delegation?
Let me underscore what you have said. This is a strong delegation, which has an agenda of cooperation and dialogue between the two states. The minister of defence was invited for an event that has been organised by Indian government. On the other side, I am here with a delegation from the Ministry of Finance and my Ministry of Development Planning. I had meetings with different ministers of your country. We had a meeting with the minister of state for external affairs (VK Singh), we had a meeting with minister of railways and we had meetings with other ministries of agriculture industry and economic cooperation.
We are beginning to build on an agenda for cooperation, which we are hoping to strengthen in the next month as we are going to have a meeting of both ministers for foreign affairs, which will take place in June.
India is leading in south-south cooperation and we are hoping to engage as part of its program on development assistance.
We have just got a proposal to have access to a program to teach English to Bolivian teachers, technicians and scientists. We welcome it.
You just had a meeting with Indian firms. How was the interaction?
Indian investors are very important. They could provide added value of technology and innovation. India is leading the industry of software, it has a very strong industry in pharmaceuticals, medicine, healthcare as well as in solar energy and automobile industry. So we want to open the doors that have been proposed in the meeting with the private companies.
So, the level of interest met your expectations?
We had a very dynamic conversation, with concrete questions on investments coming from the investors. Some of them, who want to invest in Bolivia in the near future, had questions about banking channels and visa facilitation. We have agreed on a particular agenda with each one of them and will also connect them with their respective chambers for follow-up.
What is the status of your dispute with the Jindal group?
The settlement (with Jindal Steel) is almost finished. There is a very good advance in the agreement. We are discussing how to sign the agreement…I have to say that there have been goodwill with both parties.
Has the Jindal issue been a stumbling block in attracting Indian investment?
We are travelling here with the director of international arbitration. He can give the right perspective on the legal framework for arbitration in Bolivia and address the concerns from Indian investors.
What does the result of the recent referendum (on proposed constitutional amendments) portend for Bolivia?
The referendum is a sign that our democracy is working. The decision shows that the people want the current policies to continue, the process of change to continue with decrease in poverty and inequality and advancing important social indicator. The president has been fostering and empowering poor people. At least two million have been raised to the middle class. We are building infrastructure and services and we have the support of the people.