World Bank Forced Water Privatization

["glr" <glr_y@iol.it>]

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From:           	<color><param>0000,0000,8000</param>"francesco martone" <<fmartone@cambio.it></color>

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<bold>Subject:        	<color><param>0000,0000,8000</param>[noomc-it] I: (50 Years) World Bank Forced Water Privatization On Cochabamba</bold></color>


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Cari, la storia che segue si spiega da sola. Per chi di voi non si

ricordasse a Cochabamba qualche mese fa c'e' stata una rivolta popolare

contro l'aumento dei prezzi dell'acqua. Ed ora spunta fuori che dietro

quella scelta politica c'era proprio la Banca mondiale!!!


Francesco 

----------

Da: Soren <<Soren@afgj.org>

A: "'stop-wb-imf@50years.org'" <<stop-wb-imf@50years.org>

Oggetto: (50 Years) World Bank Forced Water Privatization On Cochabamba

Data: Sab, 15 lug 2000 22:35



From: Neil Tangri <<ntangri@essential.org>


Published on Saturday, July 15, 2000 in the Minneapolis Star-Tribune

 


                 World Bank Forced Water Privatization On Cochabamba

                 by Jim Shultz

                  

                 The Star Tribune does a service to its readers by 
calling attention to the growing public debate over the World 
Bank's policies in poor countries. 

                 The paper is also right that last April's public uprising 
here, in response to massive increases in local water prices, is 
a good chance to look at what World Bank policies actually 
mean in the lives of real people.

                 However, by eagerly swallowing the World Bank's 
public relations spin, the paper has left readers with a 
misguided picture of the true story.

                 In 1999, following years of direct pressure from the 
World Bank, Bolivia's government finally agreed to privatize the 
public water system of its third largest city, Cochabamba. A 40-
year lease turned over control of the water to a subsidiary of the 
California-based Bechtel Corp. Within weeks, the company 
doubled and tripled local water rates.

                 Families earning less than $100 per month were hit 
with bills of as high as $20. Faced with water bills they simply 
could not afford, the people who live here responded with a 
series of massive protests, shutting their city down for a week 
and refusing to pay.

                 To protect the company's interests, the Bolivian 
government declared a "state of emergency," suspended 
constitutional rights, shut down radio stations, and rousted 
protest leaders from their beds in the middle of the night, flying

them to a remote jungle jail to keep them away.

                 Military forces seeking to squelch the protest used 
not only tear gas but live rounds, killing a 17-year-old boy and 
injuring more than 100 people.

                 In the end, however, the people of Cochabamba 
stood strong and eventually the government and the company 
were forced to back down, suspending the contract and rolling 
back the water hikes. 

                 In his June 25 defense of the World Bank policies that 
set these price increases and the violence in motion, Star 
Tribune deputy editorial editor Jim Boyd misstates some key 
facts and leaves others out. For example, the paper writes: "But 
the bank gets involved only when asked. It advises or suggests; 
it does not force or demand or threaten."

                 Actually, demand and threaten is exactly what the 
World Bank does, and did in Cochabamba.

                 In February 1996 the World Bank told Cochabamba's 
mayor that unless it privatized its water system the city could 
forget receiving any more World Bank aid for local water 
development. In July 1997 World Bank officials told Bolivian 
President Gonzalo Sanchez de Losada during meetings in 
Washington that privatization of the Cochabamba water system 
was also a precondition of receiving international debt relief 
from the World Bank, the International Monetary Fund and 
others.

                 It was only after these threats were made that Bolivian 
officials agreed to privatize Cochabamba's water.

                 Boyd also writes: "And when rate increases are 
suggested, the bank emphasizes making adequate provisions 
for those who cannot afford them."

                 This was certainly not the case in Cochabamba. In 
the heart of South America's poorest country the water rates 
that resulted from bank-induced privatization went way beyond 
what the poor could afford. Bank officials would hardly accept a 
doubling or tripling of their own utility rates, but they seemed 
content to see that happen here. 

                 It is absolutely true, as the Star Tribune writes, that the 
World Bank opposed a questionable local dam project. 
However, even Bechtel concedes that the costs of the dam 
were responsible for less than half of the increases 
implemented. The company also attributes the increases to the 
cost of paying off debt, such as that owed to the World Bank.

                 Rate increases were also fueled by something left out 
of the Star Tribune's story, the company's demand for a 
guaranteed average 16 percent annual return on investment, a 
sweet deal that put all the risks and costs onto Bolivia's poor. 

                 Few people would dispute the need that Bolivia and 
other poor countries have for the foreign capital that the World 
Bank and other institutional lenders provide. 

                 The real issue here is that the bank uses that financial 
power to write the economic rules for poor countries. In the 
case of Cochabamba, the World Bank forced water 
privatization on those who live as if it were a religious theology --
 no questioning, no doubt, and no listening to local 
disagreement.

                 Cochabambinos don't want a water system hobbled 
by government corruption, nor one run by an international 
corporation over which they have no influence or control. 

                 Cochabamba's attention is now focused on 
developing a constructive alternative that operates honestly and 
which puts first the needs of local water users.

                 The World Bank could play a useful role in that 
process, but to do so it will have to set aside its "privatize or we 
hurt you" theology and start listening much more closely to the 
people it is supposed to be helping.

                 Jim Shultz, Cochamba, Bolivia. Executive director of 
the Democracy Center. A complete exchange of 
correspondence between Shultz and the World Bank on events 
in Bolivia is posted on the center's Web site. 


                                      © Copyright 2000 Star Tribune 


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