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Cochabamba protests of 2000


The Cochabamba protests of 2000, also known as "The Cochabamba Water Wars," were a series of protests that took place in Cochabamba, Bolivia's third largest city, between January and April 2000 because of the privatization of the municipal water supply.

Economic Background

The restoration of civilian rule to Bolivia in 1982 ended decades of military dictatorships, but did not bring economic stability. In 1985 with hyperinflation at an annual rate of twenty-five thousand per cent few foreign investors would do business in the country. The Bolivian government turned to the World Bank as a last refuge against economic meltdown. For the next 20 years, successive governments followed the World Bank's provisions in order to qualify for continued loans from the organization. In order to move towards independent development, Bolivia capitalized (its landmark privatization reform) its railways, telephone system, national airlines, and hydrocarbon industry.

Demand of the World Bank

In 2000 the World Bank, under the belief that poor governments are often too plagued by local corruption and too ill equipped to run public water systems efficiently. [and that the use of private corporations] opens the door to needed investment and skilled management", declared it would not renew a $25 million dollar loan to Bolivia unless it privatized its water services. Believing that charging for resources encourages conservation and avoids shortages and environmental damage, the World Bank, with the goal of countering inefficiencies and waste, said that no subsidies should be given to ameliorate the increase in water tariffs in Cochabamba. The New Yorker reported on the World Bank's motives, Most of the poorest neighborhoods were not hooked up to the network, so state subsidies to the water utility went mainly to industries and middle-class neighborhoods; the poor paid far more for water of dubious purity from trucks and handcarts. In the World Bank's view, it was a city that was crying out for water privatization.

The Aguas de Tunari consortium

Prior to privatization the water works of Cochabamba were controlled by the state agency SEMAPA. The Bolivian government put SEMAPA up for auction for privatization but not capitalization. Only one party was willing to bid on the project. This was Aguas de Tunari, a consortium led by International Water Limited (England), the utility Edison (Italy), Bechtel Enterprise Holdings (USA), the engineering and construction firm Abengoa (Spain) and two companies from Bolivia, ICE Ingenieros and the cement maker SOBOCE. The water network that they envisioned was projected to provide drinking water to all of the people of Cochabamba. This was set to double the existing coverage area and also introduce electrical production to more of the region.

Without regard for its weak bargaining position, the Bolivian government under President Hugo Banzer agreed to the terms of its sole bidder Aguas de Tunari and signed a $2.5 billion, 40-year concession "to provide water and sanitation services to the residents of Cochabamba, as well as generate electricity and irrigation for agriculture." Within the terms of the contract the consortium was guaranteed a minimum fifteen-per-cent annual return on its investment, which was to be annually adjusted to the United States consumer price index. The implementation of ''Aguas de Tunari'sprogram was set to correlate with a government plan to present a $63 million rural development package to peasants with funds for crop diversification, and extending electric and telephone services to remote areas.

Law 2029

To ensure the legality of the privatization the Bolivian government passed law 2029, which verified the contract with Aguas de Tunari. To many the law appeared to give a monopoly to Aguas de Tunariover all water resources. Many feared that this included water used for irrigation by peasant campesinofarmers, and community-based resources that had previously been independent of regulation. The law was seen as "enabling the sale of water resources that had never really been a part of SEMAPA in the first place." It was worried that independent communal water systems which had yet to be connected with SEMAPA would be "summarily appropriated by the new concession." By Law 2029, if Aguas de Tunarihad wanted to, not only could it have installed meters and begin charging at independently built communal water systems, but it could have also charged residents for the installation of those meters. The broad nature of Law 2029 led many to claim that the government would require a license be obtained for people to collect rainwater from their roofs, an unenforceable policy. The first to raise concerns over the scope of the law was the new Feracion Departamental Cochabambina de Regantes'' (FEDECOR) and its leader Omar Fernandez. FEDECOR was made up of local professionals, including engineers and environmentalists. They were joined by a federation of peasant farmers who relied on irrigation, and a confederation of factory workers' unions lead by Oscar Olivera. Together these groups formed Coordinator for the Defense of Water and Life, or La Coordinadora which became the core of the opposition to the policy.

Rate hike

As a condition of the contract Aguas de Tunari had agreed to pay down the $30 million in debt accumulated by SEMAPA. They also agreed to finance an expansion of the water system, and begin a much needed maintenance program on the existing deteriorating water system. Dider Quint, a managing director for the consortium, said "We were confident that we could implement this program in a shorter period of time than the one required by the contract. [To accomplish this] We had to reflect in the tariff increase all the increases that had never been implemented before."

On top of this, in order to secure the contract Aguas de Tunari had to promise the Bolivian government to fund the completion of the stalled Misicuni dam project. The dam was purportedly designed to pipe water through the mountains, but the World Bank had deemed it uneconomic. While the consortium had no interest in building the dam, as it was backed by an influential member of Banzers megacoalition, the mayor of Cochabamba, Manfred Reyes Villa, it was a condition of their contract. An attempt to privatize the water system had been made without the condition of building the dam in 1997, but Reyes Villa had used his influence to squash the deal. Critics of Reyes Villa held that the dam was a vanity project which would profit some of his main financial backers.

The officials in Bolivia for Aguas de Tunari were mostly engineers lacking marketing training. They were also foreigners unaware of the intricacies of Bolivian society and economics. Upon taking control the company raised water rates an average of 35% to about $20 a month. While this seemed minuscule in the developed nations that the Aguas de Tunari staff had come from, many of their new clients only earned about $100 a month and $20 was more than they spent on food. In complete ignorance of the reality of his situation, a manager for the consortium, Geoffrey Thorpe simply said "if people didn't pay their water bills their water would be turned off." The poor were joined in their protest by January 2000, when middle-class homeowners and large business owners stripped of their subsidies saw their own water bills increase. As anger over the rates mounted, Reyes Villa was quick to distance himself from Aguas de Tunari.

Protests and state of emergency

Demonstrations erupted when Aguas de Tunari imposed a large rate increase, reportedly to finance the Misicuni Dam project, a week after taking control of the Cochabamba water supply system. In a country where the minimum wage was less than US$70 per month, many dwellers were hit with monthly water bills of $20 or more.

Starting in early January 2000 massive protests in Cochabamba began with Oscar Olivera among the most outspoken leaders against the rate hikes and subsequent water cut-offs. The demonstrators consisted of regantes (peasant irrigators) who entered the city either under village banners, or carrying the wiphala, they were joined by jubilados (retired unionized factory workers) under the direction of Olivera and cholitas. Young men began to try and take over the plaza and a barricade across incoming roadways was set up. Soon they were joined by pieceworkers, sweatshop employees, and street vendors (a large segment of the economy since the closure of the state owned tin mines). Self-styled anarchists from the middle-classes came from the University of Cochabamba to denounce the World Bank and International Monetary Fund and neoliberalism. The strongest supporters of the demonstration were drawn from the city's growing population of homeless street children.

Protesters were able to halt Cochabamba's economy by holding a general strike that shut down the city for four straight days. A ministerial delegation went to Cochabamba and agreed to roll back the water rates, still the demonstration continued. On February 4, 2000 thousands marching in protest were met by troops and law enforcement from Oruro and La Paz. Two days of clashes occurred with the police using teargas. Almost 200 demonstrators were arrested, 70 protesters and 51 policemen were injured.

Throughout March 2000 the Bolivian hierarchy of the Roman Catholic Church tried to mediate between the government and the demonstrators. In the meantime, the Coordinadora made their own referendum and declared that out of fifty thousand votes 96% demanded the contract with Aguas del Tunari be cancelled. The Government's reply was that "There is nothing to negotiate."

In April 2000, demonstrators again took over Cochabamba's central plaza. When the leaders of the Coordinadora (including Oscar Olivera) went to a meeting with the governor at his office they were arrested. Though they were released the following day, some, fearing further government, action fled into hiding. More demonstration leaders were arrested, with some being transferred to a jungle prison in San Joaquin, a remote town in the Amazon rainforest on the border with Brazil. The demonstrations spread quickly to other areas including La Paz, Oruro, and Potosi as well as rural areas. The protesters also expanded their demands calling on the government to resolve unemployment and other economic problems. Soon demonstrators had most of the major highways in Bolivia barricaded. The protest even inspired officers in four La Paz police units to refuse to leave their barracks or obey superiors until a wage dispute was settled..

State of emergency

The Bolivian Constitution allows the President (with the support of his Cabinet) to declare a 90 day state of siege in one or more districts of the nation as an emergency measure to maintain public order in "cases of serious danger resulting from an internal civil disturbance. Any extension beyond 90 days must be approved of by the Congress. Anyone arrested at this time must be released after 90 days unless criminal charges are brought against them before a court. With the roads cut off and fearing a repeat of the 1781 Tupac Katari Amero-Indian uprising that trapped white Spaniards in the city of La Paz for 109 days (forcing them to eat rats and shoe leather to survive) President Banzer on April 8, 2000 declared a "state of siege". Banzer said, "We see it as our obligation, in the common best interest, to decree a state of emergency to protect law and order." Information Minister Ronald McLean described the rationale for the decree, saying We find ourselves with a country with access roads to the cities blocked, with food shortages, passengers stranded and chaos beginning to take hold in other cities. The decree suspended "some constitutional guarantees, allowing police to detain protest leaders without a warrant, restrict travel and political activity and establish a curfew." Meetings of over four people were outlawed, and the freedom of the press was curtailed with radio stations being taken over by the military and some newspaper reporters being arrested. The police moved in to enforce the policy with nighttime raids and mass arrests. At one point 20 labor union and civic leaders were arrested. The police's tear gas and rubber bullets were met by the protesters' rocks and Molotov cocktails. Continuing violent clashes between the demonstrators and law enforcement led to internal exile, 40 injuries, and 5 deaths. International Human Rights Organizations decried the "state of siege" declaration. This was the seventh time since Bolivia returned to democracy in 1982 that the "state of siege" decree has been employed.

On April 9, 2000 near the city of Achacachi, soldiers met resistance to removing a roadblock and opened fire killing two people (including a teen-age boy) and wounding several others. Angry residents overpowered soldiers and used their weapons against military leaders. They wounded Battalion commander Armando Carrasco Nava and army captain Omar Jesus Tellez Arancibia. The demonstrators then found Tellez in hospital, dragged him from his bed, beat him to death and dismembered his body.

Also on April 9, 2000 800 striking police officers fired tear gas at soldiers (to which the soldier then fired their weapons in the air). In response the government gave a 50% pay raise to the La Paz police to end the strike. This brought their monthly income up from the equivalent of $80 to $120. The police then returned to enforcement procedures against those still demonstrating. A group of soldiers soon demanded their own raise, declaring that there was racial discrimination in the pay scale. Police in Santa Cruz, the nation's second largest city, also went on strike demanding a raise.

Government view of the demonstrators

The coca growers of Bolivia led by then Congressman Evo Morales (elected President of Bolivia in December 2005) had joined the demonstrators and were demanding an end to the US-sponsored program of eradication of their crops (while coca can be heavily refined and made into cocaine it is used legally by many in Bolivia for teas and for chewing). Seeing the involvement of the coca growers, the Bolivian government claimed that the demonstrators were actually agents or pawns of drug traffickers. Ronald MacLean Abaroa, the Minister of Information, told reporters the demonstrations were the work of drug traffickers trying to stop the government program to eradicate coca fields and replace them with cotton, pineapples, and bananas. He said that "These protests [were] a conspiracy financed by cocaine trafficking looking for pretexts to carry out subversive activities. It is impossible for so many farmers to spontaneously move on their own." MacLean said President Hugo Banzer was worried because "political groups and traffickers are instigating farmers to confront the army." Felix Santos, a leader of the farmers refuted such claims saying We are protesting because of higher gasoline and transportation prices and a law that will charge us for the use of water.

Protesters' demands expand

Teachers of state schools in rural areas went on strike calling for salary increases .

In the capital city of La Paz students began to fight running battles with police. Demonstrators put up roadblocks of stones, bricks and barrels near Achacachi and Batallas, and violence broke out there as well (one army officer and two farmers were killed and dozens injured). Soldiers and police soon cleared most of the roadblocks that had cut off highways in five of the country's nine provinces.

Resolution

After a televised recording of a Bolivian Army captain, Robinson Iriarte de la Fuente, firing a rifle into a crowd of demonstrators wounding many and hitting high school student Victor Hugo Daza in the face, killing him, intense anger erupted. The police told the executives of the consortium that their safety could no longer be guaranteed. The executives then fled from Cochabamba to Santa Cruz. After coming out of four days of hiding, Oscar Olivera signed a concord with the government guaranteeing the removal of Aguas del Tunari and turning Cochabambas water works over to La Coordinadora. Detained demonstrators were to be released and Law 2029 repealed. The Banzer government then told Aguas del Tunari that by leaving Cochabamba they had "abandoned" the concession and declared the $200 million contract revoked. The company, insisting that it had not left voluntarily but been forced out, filed a $40 million lawsuit in the International Centre for Settlement of Investment Disputes an appellate body of the World Bank against the Bolivian government, claiming compensation for lost profits under a bilateral investment treaty. On the day following Victor Hugo Daza's funeral, Oscar Olivera climbed to his union office's balcony and proclaimed victory to the exhausted crowd. The demonstrators declared that they would not relent until Law 2029 was changed. To get a quorum to amend the law the government even rented planes to fly legislators back to the capital. In a special session on April 11, 2000 the law was changed.

Aftermath

World Bank and continuing protests

On April 12, 2000 when asked about the outcome in Bolivia, World Bank President James Wolfensohn maintained that free or subsidized delivery of a public service like water leads to abuse of the resource; he said, The biggest problem with water is the waste of water through lack of charging.

In Washington, D.C. at the April 16, 2000 IMF and World Bank meetings protesters attempted to blockade the streets to stop the meeting. They cited the Water Wars in Bolivia as an example of corporate greed and a reason to resist globalisation. Oscar Olivera attended the protests, saying, "The people have recaptured their dignity, their capacity to organize themselves - and most important of all, the people are no longer scared."

On April 23, 2002 Oscar Olivera led 125 protesters to the San Francisco headquarters of Bechtel the only member of Aguas del Tunari located in the Americas. Olivera says With the $25 million they are seeking, 125,000 people could have access to water. Bechtel officials agreed to meet him.

The victory gained the cocalero and campesino groups international support from anti-globalisation groups. Oscar Olivera and Omar Fernandez have become sought after speakers at venues discussing how to resist resource privatization and venues critical of the World Bank. His actions in the Water Wars raised the profile of Congressman Evo Morales and he became President of Bolivia in 2005. Omar Fernandez joined Morales' socialist party Movimiento al Socialismo and became a Bolivian senator.

The Cochabamba protests of 2000 are chronicled by Oscar Olivera, a Bolivian social leader and participant in the Water Wars, in his book Cochabamba! Water Rebellion in Bolivia.

Legal settlement

On January 19, 2006 a settlement was reached between the Government of Bolivia (then under the Presidency of Evo Morales) and Aguas del Tunari, it was agreed that "the concession was terminated only because of the civil unrest and the state of emergency in Cochabamba and not because of any act done or not done by the international shareholders of Aguas del Tunari". With this statement both parties agreed to drop any financial claims against the other.

Iriarte case

When no sitting judge would hear the case against Captain Robinson Iriarte, it was transferred to a military tribunal (that had final jurisdiction over which cases it hears). In March 2002, Captain Iriarte was acquitted by the tribunal of any responsibility for the death of Victor Hugo Daza. After Iriarte's acquittal, he was promoted to the rank of major.

Continued lack of water in Cochabamba

In the end water prices in Cochabamba returned to their pre-2000 levels with a group of community leaders running the restored state utility company SEMAPA. As late as 2005, half of the 600,000 people of Cochabamba remained without water and those with it only received intermittent service (some as little as three hours a day). Oscar Olivera the leading figure in the protests admitted, "I would have to say we were not ready to build new alternatives." SEMAPA managers say they are still forced to deal with graft and inefficiencies, but that its biggest problem is a lack of money (it can not raise rates and no international company will give them a loan). Luis Camargo, SEMAPAs operations manager in an interview with the New York Times said they were forced to continue using a water-filtration system that is split between an obsolete series of 80-year-old tanks and a 29-year-old section that uses gravity to move mountain water from one tank to another. He stated that the system was built for a far smaller city and worried about shrinking aquifers. A system to bring water down from the mountains would cost $300 million and SEMAPAs budget is only about $5 million a year. The New Yorker reports "in Cochabamba, those who are not on the network and who have no well, pay ten times as much for their water as the relatively wealthy residents who are hooked up", and with no new capital the situation can not be improved. A local resident complained that water-truck operators "drill polluted water and sell it. They [also] waste a lot of water. According to author Frederik Segerfeldt, "the poor of Cochabamba are still paying 10 times as much for their water as the rich, connected households and continue to indirectly subsidize water consumption of more well-to-do sectors of the community. Water nowadays is available only four hours a day and no new households have been connected to the supply network."Frederik Segerfeldt, Water for Sale Franz Taquichiri, a veteran of the Water War and an SEMAPA director elected by the community, said "I don't think you'll find people in Cochabamba who will say they're happy with service. No one will be happy unless they get service 24 hours a day." Another Cochabamba resident and activist during the unrest summed up her opinion of the situation by saying, afterwards, what had we gained? We were still hungry and poor.

Aguas de Illimani

Similar protests took place in La Paz over Aguas de Illimani, a subsidiary of the French multinational Suez. Aguas de Illimani's contract with the state was broken after allegations were made by the Bolivian government that it did not respect all of the clauses of the contract. According to the Bolivian ambassador Pablo Solon, the International Financial Society, part of the World Bank Group, was a share-holder of Aguas de Illimani. The ambassador pointed out that since the case was brought before the ICSID, which is an arm of the World Bank, a conflict of interest arose in this affair .

Film documentaries

The Corporation.

Blue Gold: World Water Wars by Sam Bozzo

See also

ICSID (International Centre for Settlement of Investment Disputes)

Bolivian Gas War

Bolivian presidential election, 2005

External links

PBS program NOW on the Water Wars

Bechtel's version of events

Jim Shultz's version of events

Shultz's blog during the events

"Leasing the Rain" June 2002 Co-Production of NOW with Bill Moyers and Frontline/World.

"Bechtel battles against dirt-poor Bolivia: Nation severed water deal after hefty rate increases led to protests" February 2, 2002 San Francisco Chronicle

"Cochabamba's Water Rebellion -- and Beyond" February 11, 2001 San Francisco Chronicle

"Multinational Company Thwarted by Local Bolivian Community" July 21, 2000 BBC News

"Protests in Bolivia" April 11, 2000 NPR's Morning Edition

"Violence Erupts in Bolivia" April 8, 2000 BBC News

Olivera, Oscar, "The voice of the People can dilute corporate power" Wednesday July 19, 2006 The Guardian

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