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In Bolivia, a World Bank-sponsored experiment in privateization of the water supply almost ended in disaster. Until the people took back their water system

In an April 2000 editorial in the Toronto Globe and Mail, I charged the World Bank and Betchel, a giant San Francisco engineering company, with masterminding a water privatization scheme that brought Bolivia to its knees. Both responded to my charges with furious denials. So in December 2000, I went to Bolivia to see for myself. It was an incredible journey. But first, the history:

Privatizing the water supply

Bolivia is one of the poorest countries in South America, and since the 1960s, a series of military leaders,notably Hugo Banzer, a Pinochet-style dictator, has
presided over deepening economic and social unrest. In 1980, a civilian government came to power, but corruption and nepotism abounded, particularly in the current coalition government led by none other than Hugo Banzer.

Banzer and his coalition adopted the tenets of globalization and complied with the dictates of the IMF and the World Bank. Under these institutions’ structural adjustment programs, the powerful tin miners’ union was brought to its knees and the country’s oil reserves and forests were plundered.

Today, much of Bolivia’s water is polluted as it flows down muddy slopes from the Andes and Cordillera mountain ranges. As a result, potable fresh water is now the most precious commodity in Bolivia. Manycommunities have no access to water, so residents must haul muddy water from trickling streams miles away or set up camp along polluted waterways in the heart of the cities.

In 1998, the World Bank, which has endorsed water privatization schemes in many parts of the world, linked the renewal of a $25-million loan to the privatization of water services in Cochabamba. Only one bid was considered, and the water system was turned over to Aguas del Tunari, a subsidiary of a conglomerate led by Bechtel and several other construction companies.

Prompted by the World Bank, the Bolivian government granted absolute monopolies to private water concessionaires, announced its support for full-cost water pricing, pegged the cost of water to the American dollar, and declared that none of the World Bank loan could be used to subsidize water services for the poor. Then in December 1999, the private water company announced increases in water prices ranging from 35 percent to 300 percent. For most Bolivians, this meant that water cost more than food; for those on minimum wage or unemployed, water bills suddenly accounted for close to half their monthly budgets. Permits were required for all access to water, even from community wells Peasants and small farmers even had to buy permits to gather rainwater on their property.

For some time, the selling off of public enterprises such as transportation, electrical utilities, and education to foreign corporations has provoked heated economic debate in Bolivia. But when it came to water, there was little disagreement: polls showed that 90 percent of the people wanted Bechtel kicked out of their country. Debate turned to protest, and one of the world’s first water wars began.

Led by Oscar Olivera, a machinist-turned-union activist, a broad-based movement of workers, peasants, farmers, and others created La Coordinadora de Defensa del Agua y de la Vida (Coordinator in Defense of the Water and of Life) in opposition to Bechtel. Hundreds of thousands of Bolivians marched to Cochabamba in a showdown with the government, and a general strike and transportation stoppage brought the city to a standstill. Police reacted with violence and arrests, and in early April the government declared martial law. Activists were arrested in the night; radio and television programs were shut down mid-program. A 17-year-old boy, Victor Hugo Danza, was shot through the face and killed by the military.

Finally, on April 10, the directors of Aguas del Tunari and Bechtel fled Bolivia, taking with them key personnel files, documents, and computers, and leaving behind a broken company with substantial debts. Under popular pressure, the government revoked its hated water privatization legislation. In response, Bechtel is suing the government of Bolivia for close to $40 million in the World Bank’s International Court for the Settlement of Investment Disputes, claiming NAFTA-like investor-state rights.

Water service by the people, for the people

Deeply chagrined at the failure of its pet project, the local government handed over the running of the local water service, SEMAPA, complete with debts, to the protesters and La Coordinadora. The call went out for help. We responded.

Our delegation consisted of Jamie Dunn, the Council of Canadians’ water campaigner, Chief Gary John with the B.C. Interior Alliance and the Assembly of First Nations, Cam Duncan, director of the Latin American region of Public Services International, Antonia Juhasz of the International Forum on Globalization, and me.

The evening we arrived, we attended a special meeting with SEMAPA workers, met the people who now run the company, and heard the story of their struggle since the uprising.

One of the first acts of the new company was to operationalize a huge water tank in the poorest southern neighborhoods, establishing connections to 400 communities that had never had water services. Then it established an active presence in the neighborhoods, listening to the people and working with them to solve problems.

In the summer, La Coordinadora organized its first public hearing on SEMAPA, in order to begin a public process of building a broad, consensus-based definition of what the company must become. It received many proposals from civil society. Also, Dr. Jorge Alvarado, SEMAPA director, hosts a weekly television show in which he answers the public’s questions and hears their concerns about water issues. SEMAPA has also taken a strong stand against any compensation to Bechtel for its “losses.”

The SEMAPA workers’ position is very clear: they refuse to believe that their only choice for water services is between corrupt government and for-profit foreign corporations. Water is a public good, they insist, that must be provided by the people on a nonprofit basis. The water company must be efficient, free of corruption, fair to the workers, guided by a commitment to social justice (providing first for those without water), and a catalyst to further engage and organize the grassroots.

On our second day in Bolivia we were taken by bus, first to the country to visit with workers and peasants who had built the irrigation system in their communities to learn about their complex water distribution system, and then to several very poor communities in the city to see for ourselves the miracle of water in their lives.

In Alto Cochabamba, one of the poorest neighborhoods in Bolivia, we were greeted like royalty by the whole community. We listened to speeches and testimonies, most given through tears. When we left, Cochabamba literally came to see us off, waving to us as our plane left the ground.

In my travels I have often seen terrible situations of injustice and deprivation. What moves me particularly in Bolivia is that these people, among the poorest in the world, are fighting back. Once again, my belief is confirmed: the antidote to economic globalization is not going to come from the privileged of our world, but from those most devastated by its fallout.