| International corporate conspiracy, fighting in the | | | | average which earned a monthly income of about |
| streets of Bolivia with tear gas and bullets and a | | | | $100. Increases were justified as payments towards |
| power struggle at the highest levels of international | | | | a dam project. A manager for the consortium made |
| politics and business; it sounds like something from a | | | | matters worse by threatening to shut off water |
| James Bond novel, but it actually happened in Bolivia | | | | supplies if Bolivians were unable to pay. The poor |
| in 2000. High in the Andes, trouble had been brewing | | | | quickly joined in protest; their numbers increased |
| for fifteen years, but no-one expected it to boil over | | | | when the middle class and business owners lost their |
| for the right to drink a glass of water. | | | | government subsidies and their rates also rose. |
| Problems for Bolivia | | | | Panic in the streets |
| Hyperinflation destroyed the Bolivian economy in | | | | The response to the rate increase began in in |
| 1985, rising at an incredible 25,000%. Foreign | | | | January 2000 with a 4 day strike and boiled over into |
| investment possibilities were destroyed, and in the | | | | a national state of emergency that created various |
| financial crisis the World Bank stepped up to loan the | | | | violent clashes, resulting in numerous injured police |
| government money when no-one else would. As | | | | and protesters and five deaths. After a televised |
| condition for it support, the Bank demanded steady | | | | recording of a 17 year old being shot to death by a |
| privatization of Bolivian facilities, including airlines, | | | | Bolivian army Captain, public outcry forced the police |
| telephone networks and railways. Our story begins in | | | | to tell the executives of Aguas de Tunari who had |
| 2000 when, according to The Economist magazine, | | | | been relying on their protection that their safety |
| the World Bank told Bolivia of the possibility that it | | | | could no longer be guaranteed. The executives fled |
| would not 'renew' a $25 million loan. To secure the | | | | to Santa Cruz and resistance to civil protests |
| loan, the government needed to privatize its water | | | | dissolved. Within days the leader of the resistance, |
| systems, based on concerns about the efficiency and | | | | Oscar Olivera, signed an agreement that pushed |
| sustainability of the state system. | | | | Aguas de Tunari out of Bolivia and turned |
| Enter the Consortium | | | | Cochabamba's water resources over to the state |
| Bolivia set the wheel in motion to privatize. Only one | | | | facilities, revoked Law 2090 and released all the |
| bid was put in for the state agency SEMAPA; a | | | | detainees from the conflict. |
| consortium called Aguas de Tunari formed by foreign | | | | The aftermath |
| corporations Bechtel Enterprise Holdings (USA), | | | | It all sounds like a happy ending, but for the $40m |
| International Water Limited (England) and Edison | | | | lawsuit filed by Aguas de Tunari against the Bolivian |
| (Italy). Aguas de Tunari projected a water network | | | | government for being forced out of Bolivia and |
| to provide drinking water to all of the people of | | | | violating their mutual contract. The lawsuit was |
| Cochabamba, a city in central Bolivia. This was set to | | | | eventually dropped in 2005. In Cochabamba water |
| double the existing coverage area and also introduce | | | | prices have dropped to pre-2000 levels, but service |
| electrical production to more of the region. The | | | | and supply are still poor and SEMAPA is even more |
| Bolivian government under President Hugo Banzer | | | | burdened by inefficiency. With an unsuitable budget |
| agreed to the terms of its sole bidder Aguas del | | | | to expand resources and develop what already |
| Tunari and signed a $2.5 billion, 40-year concession to | | | | exists, Cochabamba seems to be in the bizarre |
| provide water and sanitation services to the | | | | position of exactly where it was fifteen years ago, |
| residents of Cochabamba, as well as generate | | | | but with the history of a very messy conflict. |
| electricity and irrigation for agriculture. | | | | So what do we take away from this story? There's |
| Warning signs | | | | the obvious problem of international corporate |
| To legally support the contract, the government | | | | interests paying little attention to the needs of the |
| passed Law 2029. Concerns arose amongst Bolivians | | | | population that they were supposed to be serving, |
| that it would lead to a monopoly on all water | | | | but that's not the most disturbing insight. The reason |
| resources; for example, the communal irrigation | | | | for the violent and passionate protests by the |
| resources used by farmers that had been | | | | Bolivian people was due to the fact that they were |
| independent of regulation. Previously free water could | | | | having their access to water taken away. It's a |
| be charged at the discretion of Aguas del Tunari. | | | | common saying that "Water is life"; as oil becomes |
| Nasty surprises | | | | scarce, will we see water become the new global |
| As soon as they took control of the water supply, | | | | commodity? We can live without oil, but what would |
| the consortium started making some unpopular | | | | happen if our water supply was passing through |
| changes. A 35% rate hike to an average of $20 a | | | | political or commercial interests? |
| month put incredible strain on Bolivian families, the | | | | |