Privatization and corporate take-over of public utilities is happening on an international scale as the World Bank and other powerhouses of persuasive governance force poor states to turn water from a social good into an economic good. Only the privileged few benefit from this global water grab while millions of the world’s poorest people suffer without equal access to basic human needs.

That’s how it went down in Bolivia in 2000. Basically the Bolivian government (and this is the story of lots of other countries in Latin America as well) were so strapped for cash that they were forced to give away ownership of the country’s natural resources in their search for sound economic investment from the World Bank and Bechtel, the largest contractor in the U.S. But when the Bolivians started to feel the effects of this “exchange” –i.e. limited access to clean drinking water, increased poverty due to newly instated price hikes on utility usage (a 200% increase in some areas), and widespread hunger/disease—they made their voice heard.

Bolivians standing up to police in a fight over their right to water

So this all started in 1996 when the World Bank began to aggressively pressure the Bolivian government to privatize its water services as a way of increasing economic development. The Bank made it perfectly clear in these under the table negotiations that a failure to do so would mean an end to international debt relief and infrastructure development loans. In April of 2000, violent citizen revolts erupted in the streets of Cochabamba, Bolivia’s third-largest city.

Citizens shut down Cochabamba, a city of over 1/2 a million people, while protesting in 2000

After a valiant uprising that cost the life of one seventeen year old boy, blinded two youths, and injured 175 others, Bechtel finally agreed to withdraw their contract at the request of the Bolivian government. To add insult to injury, the major corporation filed a $25 million claim with the International Center for Settlement of Investment Disputes (ICSID). Oh, but did I mention that the ICSID is actually a branch of the World Bank and that the lead judge on the case was appointed directly by World Bank officials? In America, the judge and jury are not allowed to have any link to the person being tried… so then why does the World Bank get to sentence its’ brother organization? The good news is that in 2006, Bechtel agreed to drop these charges. However, Bolivia is still reeling from the damaging effects of privatization and struggles to improve water allocation in the public sector.

Related posts:

1. Even the Rain