Global Policy Forum

by *Jim Schultz

Two months after huge street protests broke up the meeting of the World Trade Organization in Seattle, the grassroots rebellion over the rules of economic globalization erupted in the streets again here in this city of half a million high in the Andes. This time the globalization battle was over something very simple, the price of water.

In 1999, under direct pressure from the World Bank, the Bolivian government sold off Cochabamba's public water system to a consortium of British-led investors. In January, the new owners handed local water users their monthly bills, emblazoned with a spanking new corporate logo and hikes in water rates that for many families were more than double. In a country where the minimum wage is less than $100 per month, many users were hit with water bills of $20 and higher.

The new water company (Aguas Del Tunari) and its government allies may have thought the residents of this valley city would take the increases calmly. They thought wrong. In mid-January, led by a newly-glued together alliance of labor, human rights and community leaders, Cochabamba residents shut down their city for four straight days with a general strike. All transportation came to a halt, roads were blockaded, no buses were allowed in or out of town, and the government was forced to the negotiating table, agreeing to a price rollback and a two week deadline to work out the details.

Bolivian Troops And US Tear Gas

Soon after, however, it became clear that the government's promises were vanishing into thin air. Movement leaders announced plans for a massive but peaceful march to the city's Central Plaza on February 4th. Bolivia's President, Hugo Banzer, who ruled the country as a dictator from 1971-78 (a neighbor and close ally of Augusto Pinochet), responded by bringing in more than 1,000 police and soldiers from outside the city and imposing a military takeover of Cochabamba's center. For two days, while popular leaders and government officials held tense negotiations, police showered tear gas and rubber bullets on rock-wielding protesters, men and women, young and old, poor and middle class. More than 175 protesters were injured and two youths blinded. Almost all the tear gas used was manufactured in the U.S. and Embassy officials here acknowledge that the US has donated gas here before to use against protesters. Asked for this article if US-donated gas was used against the water protesters, the Embassy responded with a waffling, "to the best of our knowledge" no US-donated gas was used.

"Taking Everything And Turning It Willy-Nilly Into A Commodity"

The privatization of water is just the latest in a decade-long series of sales of Bolivian public enterprises to international private investors, the airline, the train system, the electric utility, as government officials carefully toe the neoliberal line that "private is better". While the promises have been about an infusion of new investment, the more obvious results have been a weakening of labor standards, increases in prices, and reductions in services (the train service is gone altogether).

Privatizing Cochabamba's water was a major item in the World Bank's June 1999 country report for Bolivia, which specifically called for "no public subsidies" to hold down water price hikes. Poor countries like Bolivia only reject World Bank advice at the peril of being cutoff from international assistance. In a process with just one bidder, local press reports calculated that investors put up less than $20,000 of up-front capital for a water system worth millions.

The question of privatization is a complicated one, a good idea in some cases, a bad one in others. Yet, for the World Bank and other international funders, privatization is less an analysis than a theology, one that US researcher Thomas Kruse explains, "takes everything and turns it willy-nilly into a commodity." Here in Cochabamba, says Kruse, "Water was the straw that broke the camel's back."

Water or Food?

Tanya Paredes is a mother of five who supports her family as a clothes knitter. Her water bill went up in January from $5 per month to nearly $20, an increase equal to what it costs her to feed her family for a week and a half. "What we pay for water comes out of what we have to pay for food, clothes and the other things we need to buy for our children," she explains. It is worth noting that well-paid World Bank economists in Washington will now pay less for water than Paredes, about $17 per month, what they might spend on one dinner in a Georgetown bistro.

Price hikes like these made support for the protests wide spread. "Everyone took a role," says Oscar Olivera, the Cochabamba labor leader who has become the protests most visible leader. "Youth were on the front lines, the elderly made roadblocks." When protest leaders called on the radio for a citywide transportation stoppage in response to the police takeover downtown crackdown, little old women with bent spines were out in the streets within minutes, building blockades with branches and rocks.

The February uprisings forced government officials to promises a full rate rollback and a review of the water company contract, a pact that movement leaders want annulled entirely. "We're questioning that others, the World Bank, international business, should be deciding these basic issues for us," says Olivera. "For us, that is democracy." If the latest government promises also vanish into thin air more strikes and protests are certain to follow.

*Jim Shultz, executive director of The Democracy Center, lives and writes in Cochabamba, Bolivia.

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