Cochabamba, Bolivia

• Bolivia = South America's poorest country and is highly indebted so is subjected to water privatization as a condition for borrowing money from IMF and World Bank
• IMF: 2/3 population below poverty line
• Annual Income per capita is $950
• Bolivian government are trying to privatize as many public enterprises as they can
• Cochabamba is Bolivia's 3rd largest city - 350 miles east of capital city La Paz
• In February and March 2000, protests rose in Cochabamba because of skyrocketing cost of water (many saw bills triple or quadruple after Aguas del Tunari took over the city's water system
• Aguas de Tunari = private company owned by London based multinational international water Ltd
• For 1000s of families, rate hike meant that 1/2 monthly income went to water bill
• Struggle to survive so the people demanded water contract be terminated. After suffering civil rights abuses, injuries and even death (police and military), protests were heard and rights restored
• 1950s to early 1980s: succession of governments attempted to get Bolivia out of poverty through structuralists measures. Bolivian economy did not respond well to measures and structural adjustment programme set up by World Bank and IMF collapsed in 1981
• 1985: stabilization programme began - positive growth since 1987 but social effects hit poor hard

  • Liberalized all prices
  • Restored financial stability
  • Reduced inflation
• Sanchez administration ( 1993 - 1997 ), privatisation = key component of Bolivia's neoliberal economic policy
• World Bank and IMF pushed Bolivian government to sell its public enterprises to international investors

  • Authorities did this after submitting to Bank Pressure
  • Sold Cochabamba's water system in 1999, national air line, electric utilities etc
• Privatisation led to increased foreign investment into Bolivia which helped boost GDP
• 1999: Bolivian government granted a 40 year contract to Aguas de Tunari (subsidiary consortium of London Based International Water LTD and San Francisco based Bechtel Corp) to run SEMAPA (Cochabamba's water system)
• Aguas de Tunari took over in October 1999 and operation in full by the following January
• Increased tariffs on water from $2 per month to $16 per month
• Water tarriffs increased by 200 - 300% just weeks after take over
• World Bank in June 1999 published economic report states "no public subsidies should be given to ameliorate the increase in water tariffs in Cochabamba" so they predicted and knew before they made ESAF that Cochabamba's citizens would face hiked prices
• Water prices too high a burden to service so public staged protests in February 2000.

  • Strikes, roadblocks and more were used and protesters shut the city down for 4 days
• 1st incidence of violence: President Banzer dispatched police armed with tear gas as 1000s of protesters marched peacefully

  • Approx 175 marchers injured
  • 2 blinded
• Municipal government agreed to sit with protesters leader and representatives in April

  • Protest leader = Oscar Olivera ( long term Labour leader )
  • Olivera claims meeting was a set up as when they sat down, they were swarmed by Feds and arrested
  • Days after: crowd protests at city hall in response to events
• Protests spread from Cochabamba to the rest of Bolivia

  • > 50 detained
  • Dozens injured
  • 6 killed
  • Police broke into protest leader's homes - more than a dozen leaders arrested and sent to a remote prison in Bolivian Jungle - confirmed by government minister Walter Guileras and Info Minister Ronal Mallean
• Government of Cochabamba tried to persuade central government to cancel Aguas contract but resigned later that day
• President Ranzer placed Bolivia under martial law in April the same ay a teen was shot through face and killed by police
• State of Emergency (90 days)

  • Suspension of all civil rights
  • Curfew
  • Arrests and confinement of protesters with no warrant
  • Restrictions of travel and political activity
• Banzer banned gatherings of over 4 people and also banned press (reporters at the La Paz Daily Presencia received death threats over the phone)
• 1st day of State of Emergency: Bolivian military temporarily occupied small radio stations (3) in towns surrounding Cochabamba
• World Health Organisation says percentage of people supplied with drinking water [urban and rural areas] = 93% and 55% respectively
• Sanitation is 82% (urban) and 38% (rural)
• Predicted by 2025, 2/3 population (global) will run short of drinking water
• World Bank officials propose going ahead with more rounds of structural adjustments after considering Bolivia's poverty and lack of social improvements caused by delays in privatization schemes
• Key document in shaping privatization movement is the Enhanced Structural Adjustment Facility [ESAF] Policy Framework for 1998 - 2001 [published on August 25th 1998]

  • Prepared by Bolivian authorities, World Bank and IMF staffs
  • Stakes: "the government intends to privatize all remaining public enterprises [...] and plans to sell a water company (SEMAPA) by December 1998"
  • 3 year programme [originally under ESAF] first approved by September 1998 then reapproved in 2001
• ESAF = Provides an outline of macroeconomic policies and structural reforms a country is required to make as a condition for borrowing loans earmarked for poverty reduction
• April 10: Banzer announces termination of water contract (Agua) turned over control of city's water system, including its $35 mn debt to protesters org: coalition for the defense of water and life, led by Olivera. Mandale is to develop a water system which relies on neither government nor transnational corps.
• Unclear what will happen next regarding compensation to the ousted private water consortium.
• Olivera awarded prizes for his work and efforts:

  • 2001 Goldman Environmental Prize
  • 2000 Letelier-Moffitt Human Rights award from the Institute for Policy Studies