Nationalization is a general policy which beings a whole sector of the economy into public or state ownership, usually indicates an attempt to make a fundamental shift in the organization of the industry within a host economy.
National security
National security and developmental objectives had caused a world-wide trend for government to go nationalization for such popular and economic mentioned investment
Public utility is one of the most popular type of investments which interest investors but due to capital needs of steel and automotive assembly, it is important to have government funding. Petroleum and mining calls for high political risk and because of nationalist feelings, such exploitations should be in the interest of the nations rather than private profits.
Country on nationalizations throughout the 1960s ~ 2010
Nationalizations were an important issue during the 1960s and the 1970s when many colonies
Became independent countries. Later, during the 1980s and the 1990s, their frequency declined as reported by Minor (1994). Despite this evidence, a number of examples in the last few years seems to support a new trend. For instance, in Bolivia in 2006 the leader Morales announced a plan to nationalize the local natural gas industry (Reel and Mufson, 2006); in Venezuela where over the last three years the president Chavez has ordered the nationalization of foreign firms in several extractive industries (Narea, 2010); in Ecuador a contract with the oil company Occidental Petroleum was cancelled in 2006 (Reuters, 2006).
Resource and Energy Economics, Volume 35, Issue 3, September 2013, Pages 295-315
Luca Di Corato
Thus such nationalism pressure will act on the government to take actions towards foreign companies and caused political risk on them in long run.
Anti-privatization sentiments
Bolivia oil and gas sectors (Supreme Decree No.28701)
Announcing Bolivia’s nationalization calling for renegotiation of