Multinationals got water-works cheap, then rated Bolivians used to cheap or free water --  5 deaths followed
Drug-growing stopped, but nobody helped farmers fill the money gap

Again - this is not necessarily up-to-the minute. Yes - the Archbishop proclaimed the people's victory on Friday, but on Friday the Bolivian government proclaimed martial law, on Saturday they announced they wouldn't allow the Bechtel crowd to back away from the contract -- and although on Monday the papers announced that the Bechtel crowd had indeed cancelled, I've seen nothing convincing to that effect.

Meanwhile the U$ press is saying that the Bolivians are more discontented with the destruction of the coca crop than with the water privatization and the resulting rate increases.  And the only "useful" info comes from Agence France Presse, from individual correspondents in Bolivia, and from diligent Net search of items like Bechtel. -- Cheers, MichaelP

From: MichaelP <>  Date: Wednesday, 12 April 2000 1:51
Subject: Bolivia - water privatization report

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WSWS : News & Analysis : South & Central America
Protests against water rate rises sweep Bolivia
By Mike Ingram, 11 April 2000

Five people were killed and more than 30 injured in protests across Bolivia against the privatisation of the country's water supply and massive price hikes.  According to local press reports, 17 protest leaders were arrested and flown to a remote jungle prison following the government's imposition of martial law last weekend.

The imposition of emergency rule, the seventh since the so-called transition to democracy in 1982, was in response to a week of protests over a government contract signed last year that sold the region's water system to a consortium of British-based investors. London-based International Water Limited (I.W.L.) is owned by Italian utility Edison, U.S. company Bechtel Enterprise

Holdings and several wealthy Bolivian partners. It acquired Cochabamba's public water system in a one-bidder sale carried through at the insistence of the World Bank.  The sale was the latest in a systematic sell-off of public enterprises to foreign investors and follows the privatisation of the airline, train system and electric utilities.

The protests assumed a particularly violent character over the weekend following a government announcement on Friday, April 7 that it was breaking the contract with IWL, which was subsequently withdrawn and martial law imposed.

In Achacachi, 80 miles north of the capital La Paz, farmers blocked roads and engaged in rock throwing battles against soldiers armed with rubber bullets and tear gas.  Hundreds of protesters stormed government offices, destroying furniture and documents by setting fires.  Some are reported to have entered a hospital, dragged an injured army captain from his bed and killed him on the main square.

Army units fought with Aymaran Indian farmers who formed roadblocks in Batallas, located 45 miles north of La Paz.  Despite the imposition of martial law, confrontations continued through Sunday with three soldiers and two farmers killed and dozens more injured.

Friday's announcement of an end to the contract was seen by protest leaders as a concession to four days of massive public protests, including a general strike and road blockades that began on the morning of Tuesday, April 4 in Cochabama and shut down the city of half a million.  The action closed schools and businesses throughout the city, including the 25-square-block marketplace, which is one of Latin America's biggest.  In fact, the government announcement seems to have been nothing other than the latest in a long series of manoeuvres aimed at disarming the growing protests and carrying through ever more repressive measures.

A similar tactic was used in mid-January when protests over rate increases, organised by a new alliance called the La Coordinadora, exploded with a four-day shutdown of Cochabama.  The government responded at that time by agreeing to reverse the rate increases.

Families were hit with a $20 per month or more increase under conditions where the minimum wage in the city is less than $100 a month.  Tanya Paredes, a mother of five who works as a clothes knitter, said that her increase of $15 per month was equal to one and half weeks' worth of food for the family.  "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 said.

By early February, government promises had still not materialised and La Coordinadora called for a peaceful march on the city's central plaza.   The march was met by 1,000 police and an armed occupation of Cochabama centre.  Two days of confrontations between riot police and marchers left more than 175 protesters injured and two youths blinded.

In response to the February protests, the government and water company agreed to roll back the rate increase and implement a price freeze until November.  A new round of negotiations was also agreed to.  La Coordinadora pressed ahead with demands for the government to break the contract with IWL and return the water system to public hands.

Last Tuesday was set as a deadline for action if the demand was not met, with La Coordinadora declaring it to be la última batalla (the final battle).

As the Tuesday deadline arrived, city residents took to the streets.  By Wednesday they were joined by thousands of people from surrounding rural areas, who reinforced the road blockades.

On Thursday a crowd of nearly 500 surrounded the government building where talks had been convened by the Roman Catholic archbishop between protest leaders and government officials.  The meeting was halted when the government ordered the arrest of 15 La Coordinadora leaders and others present at the meeting.

La Coordinadora's most publicly known leader, Olivera, said, "We were talking with the mayor, the governor and other civil leaders when the police came in and arrested us.  It was a trap by the government to have us all together negotiating, so that we could be arrested."

The arrests provoked an angry response among thousands of city and rural residents, who filled the city's central plaza carrying sticks, rocks and handkerchiefs to block the anticipated tear gas. Media crews speculated about the imposition of martial law and there were reports of army units arriving at the city's airport.

Protest leaders who were freed from jail early on the morning of April 7 agreed to a 4 p.m. meeting with the government, again convened by the archbishop.  By 5 p.m. government officials still had not arrived.  Despite their experiences the previous day, and widespread expectations that the army would arrive instead, the opposition appear to have been completely thrown by Friday's empty promises.

A pro-opposition article, published in the San Jose Mercury News on April 8, gives the following triumphant report of subsequent events:

"Suddenly and unexpectedly, the Archbishop walked into the meeting and announced that the government had just told him it had agreed to break the water contract. Jubilant La Coordinadora leaders crossed the street to a third-floor balcony, announcing the victory to the thousands waiting below, many waving the red-green-and-yellow Bolivian flag, as the bells of the city's cathedral echoed through the city center.

"We have arrived at the moment of an important economic victory,' Olivera told the ecstatic crowd."

Jubilation quickly gave way to mourning as a 17-year-old boy, shot in the head by the Bolivian army, was buried on the second day of martial law. -- Copyright© 1998-2000, World Socialist Web Site, All rights reserved

Date: Tue, 11 Apr 2000 13:02:30 -0700 (PDT)  From: MichaelP <>  To:
Subject: INFO: Bolivia menu: Bechtel spin plus earlier Reuters piece
(Thanks JanetE)

Bechtel's response (below) reads as if they have not really pulled out of the privatization contract, but rather "are in urgent discussions with local leaders to determine an appropriate resolution to the water shortage problems facing the Cochabamba region".

Since some of the truly "local" leaders have been locked away under martial law principles, I suppose the "local leaders" are those who helped develop the original privatization scheme? -- Cheers, MichaelP

In response to what was posted last week-end by "Jim Shultz" <> from Cochabamba,

Michael Pierce McKeever, Sr.[] wrote to Bechtel; the subject was the civil unrest resulting from proposed rate increases associated with privatization of water and sewer utilities.

Here is a reply from someone at Bechtel :
From: "Apps, Gail" <>  To: 'mckeever' <>  Subject: RE: Shame on You  Date: Tue, 11 Apr 2000 10:44:00 -0700

In response to your e-mail message about Cochabamba, we provide the following statement issued Tuesday morning, the 11th, by International Water Ltd., a water development company owned by Bechtel Enterprises and Edison S.p.A.  Edison S.p.A., an affiliate of Group Montedison, is Italy's largest private energy services company.  Aguas del Tunari, mentioned below, is the IWL-led consortium that negotiated the Cochabamba water concession.  If you have further questions or comments, please contact IWL's London headquarters at (44-171) 766-5100. Alternatively, you may send e-mail to

"We are saddened by the violence that has occurred in Bolivia this past week.

"We are equally dismayed by the fact that much of the blame is falsely centered on the government's plan to raise water rates in Cochabamba, when in fact, a number of other water, social and political issues are the root causes of this civil unrest. Several of these factors have all led to the tensions on display throughout the country:

* proposed water legislation (unrelated to the Aguas del Tunari concession) that requires farmers and others to obtain permits for water extraction
* unemployment and other economic difficulties facing Bolivian citizens
* a government crackdown on coca-leaf production
* and police protests over salaries.

"We are in urgent discussions with local leaders to determine an appropriate resolution to the water shortage problems facing the Cochabamba region.   Currently more than 40% of the region's citizens have no direct access to water resources.  We were invited by the government to participate in a privatization program to develop long-term solutions to provide safe and affordable water and wastewater services.  During the past several months we have participated in a number of meetings with government and community leaders to identify acceptable options to ease the transition from public to private management.  We remain flexible in our approach and hopeful that the government and community can reach consensus on a solution that allows the water delivery system to be expanded and improved."

April 11, 2000

Bolivian Water Plan Dropped After Protests Turn Into Melees

LA PAZ, Bolivia, April 10 (REUTERS) -- After violent protests in Bolivian cities on Saturday and Sunday over a bill that would impose charges for water, an international consortium pulled out of a planned $200 million waterworks project today.

Five people died in the violence over the weekend and at least 40 were injured, the government said today.

About 20 labor union and civic leaders were arrested in the nationwide protests, which occurred in response to proposed legislation on water rates.

Roadblocks had been set up by peasant unions pressing the government to relent on a bill in Congress that threatens to make them pay for water they currently receive free.

Some of the most violent protests took place in the central city of Cochabamba, where a multimillion-dollar electricity and drinking water network was scheduled to be built by Aguas de Tunari, a consortium led by International Water Limited, based in London, which would increase water costs by 35 percent.

Cochabamba is the third-largest city in the poor landlocked country of eight million people.

The company is jointly owned by an Italian utility, Edison, and an American company, Bechtel Enterprise Holdings.

Other members of the consortium include a Spanish engineering and construction firm, Abengoa, and two Bolivian companies, ICE Ingenieros and a cement maker, Soboce.

"The company has decided to pull out of the Misicuni project and the distribution of water in Cochabamba," Luis Uzin, superintendent of basic sanitation, said after meeting with Geoffrey Thorpe, chief executive of the consortium.

During the protests over the past week, farmers unions set up roadblocks on several national highways in five of the nine provinces.

An army captain and two civilians died in clashes on Sunday in the town of Achacachi on the Bolivian high plateau, the Catholic Television Network reported.  Seven people were injured in the confrontation as soldiers tried to remove a roadblock.  The town is 60 miles north of the capital, La Paz.

The captain was killed by protesters.  One of the civilians was a peasant fighting against soldiers, while the other was a tailor watching the confrontation, the network said.  Both were shot.

On Saturday, a teacher was shot and killed when the military tried to clear a highway running from La Paz to Oruro that had been blocked for five days by peasants.

The same day, a youth was killed by a bullet during violent protests in Cochabamba.

At least 20 union and civic leaders have been arrested and confined in an Amazonian town under a state of emergency, which grants President Hugo Banzer extraordinary powers in the deployment of police and soldiers, the police reported.

By Sunday afternoon, the military had cleared most of the routes, which were shut off for five days, the police said, but roadblocks remained in place near Achacachi.  (documents to 12 Apr 2000).

Wanting to control the water of the WHOLE WORLD!

Bolivia's water supply is the latest acquisition of thirsty British firms in the service of Uncle Sam.

With the front pages jammed with photographs of two dead white farmers in Zimbabwe, the news from Bolivia -- 'Protests claim two lives' -- was pushed into a tiny World in Brief in the Guardian, and not mentioned elsewhere.

What a shame.  While Zimbabwe is partially about an imperial past, Bolivia is the story of Britain's imperial future.

Observer (London), Sunday April 23, 2000
by Gregory Palast
"New British empire of the dammed"

First, let's correct the arithmetic.  The count in Bolivia is now six dead after the military fired at demonstrators opposing the 35 per cent hike in water prices imposed on the city of Cochabamba by the new owners of the water system, International Waters Ltd of London.

IWL, like many of Britain's multinational operators, is controlled by a larger US corporation, in this case San Francisco-based construction giant Bechtel.  Best known here as builder of the London Underground Jubilee Line extension, Bechtel recently set off on a quest to own and operate water systems worldwide.  United Utilities, originally co-owner of IWL is now merely 'strategic partner' in the venture.

Following the Cochabamba killings, Hugo Banzer (once Bolivia's dictator, now elected President), declared a nationwide state of siege, abolishing civil liberties.  On 12 April, just after the martial law declaration, World Bank director James Wolfensohn told reporters: 'The riots in Bolivia, I'm happy to say, are now quieting down.'

I contacted Oscar Olivera, a trade union official and leader of the protests, to ask him how he had organised the riots. On 6 April, Olivera -- with a coalition of 14 economists, parliamentarians, lawyers and community leaders -- accepted a government invitation to discuss the IWL price hikes.

After entering the government offices in Cochabamba, Olivera and his colleagues were arrested.

A couple of weeks ago, after Bolivians rioted against rate increases for water, Bechtel -- main component of the privatized water company -- announced it was pulling out of the arrangement. The Brits report that was just NOT TRUE.
Who could imagine that the Bolivian government AND Bechtel AND Wolfensohn of the WorldBank are being dishonest !! -- MichaelP

With Olivera in chains, the riot outside the building could only have been directed by the leader of the 500 protesters, Cochabamba's Roman Catholic Archbishop.

There is, of course, the possibility that Wolfensohn had got it wrong, and that the people he called rioters were in fact innocent victims of deadly repression.  Olivera, one of five protest leaders released, flew to Washington to try to speak with Wolfensohn.  But the director is a busy man and Olivera left without having a meeting.

The price hikes that triggered the water war were driven by IWL's need to recover the cost of the huge Misicuni dam project.  Water from the dam system will cost roughly six times that of alternative sources.  Why would IWL want water from a ludicrously expensive source?  Just possibly because IWL owns a part of the Misicuni dam project.

The public had one other problem with IWL's charging for the dam project: there is no dam. It has not yet been built.

It is a basic tenet of accounting that investors, not customers, fund capital projects.  The risk-takers then recover their outlay, with profit, when the project produces a product for sale.  This is the heart, soul and justification of the system called 'capitalism'.  That's the theory.

But when a monopoly operator gets its fist around a city's water spigots, it can pump the funds for capital projects from captive customers rather than shareholders.

Samuel Sora, the Bolivian government's former consultant on the water projects, said he was unable to extract from IWL evidence of it having put any funds at all into the operation.  Water prices could, he fears, eventually rise by 150 per cent.

Luis Bredow, publisher of the newspaper Gente told me "no money was shelled out by anybody" for Cochabamba's water company.  His own investigation concluded that the operators grabbed the entire system for nothing.  He attributes these exceptionally favourable terms to IWL's partnership with former Bolivian President Jaime Paz Zamora, leader of a political party allied to Banzer.

IWL's London spokesman said little more than: "How did you find out that IWL was involved in Cochabamba?"  (The company's Bolivian group is called Aguas de Altuni.)  In fact, the British company's involvement is getting to be "misterioso".  President Banzer, to quell the spreading demonstrations, announced cancellation of the water privatisation on 5 April.

But the next day, word leaked that IWL was back in the saddle at the water company and people nationwide took to the streets again.

On 10 April, the panicked government declared that the foreign consortium had "abandoned" its franchise when its British chief executive supposedly fled the country.  But last Thursday we tracked the IWL executive to a hotel in La Paz where, his associates told me, they were about to open negotiations with the Banzer government.

From its US headquarters, Bechtel issued a statement denying that the upheaval in Bolivia had anything to do with its water price hikes.

It can't be said that the British-American operators brought misery to Cochabamba; they found plenty already there. Intestinal infection leading to diarrhoeal illness is Bolivia's number one child killer - the result of water hook-ups and sanitation reaching only 31 per cent of rural homes.

World Bank director Wolfensohn has a solution to the lack of water: raise the price.  So pay up, he demanded of the protesting Bolivian water users.

But this contradicts the internal counsel of his own experts.  In July 1997, at a meeting in Washington, the Bank's technocrats laid before the Bolivians the case against Misicuni, and even warned about social upheaval if prices rose. According to a World Bank insider, the Bank's hydrologists and technicians devised a water plan for Cochabamba at a fraction of Misicuni's bloated cost.

So why did Wolfensohn attack protests against a project the World Bank itself found dodgy?  Because there are larger plans not discussed with the Bank's low-level minions.  Long before ministerial limousines clogged the US capital, the big policy decisions were settled in far-flung 'sectoral' meetings.

In the case of water, nearly 1,000 executives and bureaucrats gathered in The Hague last month to review and refine a programme to privatise the world's water systems.

But private operators can turn profits only if prices rise radically and rapidly.  IWF secured from Bolivia a 16 per cent real guaranteed return.

This profit boost is itself enough to account for the initial 35 per cent hike in rates.

To assist such 'reform', the IMF, World Bank and Inter- American Development Bank have written sell-offs into what they term national 'master plans'.  Consortia such as IWL were formed to capture these cast-off public assets.

The justifiable basis for the sell-offs was that privateers committed to deliver capital for desperately needed system repairs and expansion.  But the promises rapidly wilted.  Cochabamba's protest organisers knew that just across the border in Buenos Aires, the region's first privatisation consortium eliminated 7,500 workers, whereupon the system bled from lack of maintenance and prices jumped.  The new owners of the Buenos Aires system notably include Anglian Water.

Britain is re-establishing imperial reach through rapid low-capital takeovers of former state assets, concentrated in infrastructure where monopoly control virtually guarantees an outsized profit.  It all seemed a riskless romp - until a few thirsty, angry peasants decided they could stop it.

(Added to this Webpage 26 Apr 00)

Bolivia - martial law ends , government restructures

IPS World News
POLITICS-BOLIVIA: Banzer, the Siege and the Market
By Alejandro Campos

LA PAZ, Apr 21 (IPS) - The end of the government-declared state of siege in Bolivia does not necessarily ensure a definitive social peace in a country whose people have accumulated 15 years of frustration with the market economy model, say political observers.

One military and four civilian deaths, 88 people wounded, 21 union leaders arrested and various governmental defeats is the balance after 13 days of siege, lifted Thursday by president Hugo Banzer, though it had originally been set to last 90 days.

IPS World News
POLITICS-BOLIVIA: Banzer, the Siege and the Market
By Alejandro Campos

Though all forms of protest had been banned, streets and roads were occupied by demonstrators throughout the 13-day siege.

The declaration of a state of siege was Banzer's lowest point in his two years and eight months in the presidency, because not only was it incapable of containing the protests, it deepened existing conflicts and created a general feeling of contempt for the government.

The use of force only helped the sectors caught up in the conflict entrench their demands, and contributed to widespread criticism of Banzer's government, even from some of its political allies.

The government lifted the state of siege after the Catholic Church and trade unions stepped up pressures and when it became apparent that a foreign debt relief programme financed by the International Monetary Fund (IMF) and the World Bank was in jeopardy.  The funding was conditioned on government dialogue with civil society in defining how the resources would be used.

In Bolivia's 15 years of democracy, the three governments preceding Banzer's implemented a state of siege five times.  In each of those cases, the siege lasted the three months established by the Constitution, but none of them resulted in human deaths.

The 13 days of violence seem to have left warnings, not lessons.  Felipe Quispe Huanca, leader of the Union Confederation of Peasant Workers of Bolivia, which organised the largest blockade of national roads in the last two decades, warned that recent events were "just a rehearsal."

"The peasants have made their stand," an indigenous leader known as "Mallku" ('condor' in his native Aymara language) told the press, adding that what occurred this month "are the first stones towards taking political power."

"Here the Indian question is not an issue of land, it is about power," he announced.

From: MichaelP <> Date: Tuesday, 25 April 2000 8:00
Subject: Bolivia - martial law ends , government restructures (fwd)

"When the neoliberal economic model was implemented in 1985, government leaders asked the Bolivian people for patience and sacrifice, but now, 15 years later, patience has run out because the model did not meet their expectations." -- Maria Teresa Segada

During the state of siege, the peasants won a battle with the government over the controversial Water Act, a law that had forced them to pay for using water from natural springs and wells.

Political analysts see the failed siege and the public's discontent as an expression of disenchantment with a democracy that is limited to the electoral sphere.

"Such as it stands, democracy is reaching its limits," warned Erick Torrico, an expert at the Simon Bolivar Andean University, of the Andean Community of Nations (CAN).  "The content of recent demonstrations responds to a situation that reveals the inadequacies of a merely (electoral) democracy."

The voting ritual no longer satisfies and the siege is a reflection of the dangerous and unproductive hardening of the system, according to Torrico.

The population's patience has reached its limits, agreed sociologist Maria Teresa Segada, a specialist from the government-run Higher University of San Andres.

When the neoliberal economic model was implemented in 1985, government leaders asked the Bolivian people for patience and sacrifice, but now, 15 years later, patience has run out because the model did not meet their expectations, Segada said.

Analyst Rafael Archondo predicted that what occurred during the two-week siege, which was generally disobeyed by the public, is the beginning of the end for government models dictated by the Supreme Decree 21060, which in 1985 initiated the full implementation of the market economy in Bolivia.

To resolve this conflictive situation, the nation's democracy must move beyond being an elected dictatorship and become an authentic process of co-leadership in the social and political spheres, "where there is more society and less State," concluded Archondo.  (Sent also through Bob Olsen, Toronto  (Added to this Webpage 26 Apr 00.) 
Entire cabinet of Bolivia resigns for restructure

Agence France Presse

LA PAZ, April 24 (AFP) -- The entire cabinet of Bolivian President Hugo Banzer's government resigned on Monday, only four days after a controversial state of emergency was lifted, plunging the country into a new political crisis, the foreign minister said.

Javier Murillo, announcing the resignations of the 15 ministers, said: "We have agreed to leave the president with the widest and most absolute freedom to choose his collaborators."  (Added to this Webpage 26 Apr 00)



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