Thursday, November 4, 2010

Blowback



So, the Canadians have blocked BHP, as predicted.

Good for them.

Commentary is full of the usual one-eyed drivel about a "shock decision". John Durie is typical:
BHP can attempt to overturn the decision and will be as confused as everyone else given this was only Canada's second rejection of a foreign takeover since it loosened regulation guiding foreign investment in 1985.

As well, there is tub-thumping jingoism from Stephen Bartholomeusz who reckons "... the Canadian government has damaged the reputation of Canada as an open economy committed to free flows of capital."

Or, just plain parochialism from Ian Verrender who defends Marius Kloppers is an innocent victim whose last three failures "have been right and his execution has been good" but he's fallen victim to "nationalist fervour".

Give this blogger an almighty break.

The result was entirely foreseeable because BHP is reaping what it has sown. Why would any other country want to hand over its monopoly assets to a company that has an unrivaled recent record of rent-seeking?

Whether it's been relations with customers like China, where BHP flattened the annual benchmark pricing system that had served to balance the iron ore market for decades, as well as made repeated attempts to merge with Rio to create a monster ore monopoly. Or it's at home, where BHP rocked the foundations of Australian democracy in its anti-RSPT campaign, the company has shown itself to be a ruthless vested interest.

BHP is doing much greater harm to free markets than Canada is.

2 comments:

dingo said...

We'll get that potash in the end you closet-lumberjack-loving-traitorous-wench. Aussie Aussie Aussie! Oi Oi Oi! The potash will be ours!

David Llewellyn-Smith said...

I hope so, but I doubt it...