Cochabamba Water War

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 25000%, few foreign investors would do business in the country. The Bolivian government turned to the World Bank as a last resort 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. ==World Bank==

The World Bank said that "poor governments are often too plagued by local corruption", similarly the World Bank stated that "no subsidies should be given to ameliorate the increase in water tariffs in Cochabamba". The World Bank acknowledges that it provided assistance to prepare a concession contract for Cochabamba in 1997. However, its involvement with water in Cochabamba ended in the same year. At that time the bidding process for the concession had been declared void by the Supreme Court in response to a legal challenge by the municipality of Cochabamba. In the same year the World Bank project in the three cities ended. The World Bank thus was not included any more in the subsequent phase of the privatization. Construction began on the dam in June 2009 and was completed in September 2017. ==Aguas del Tunari consortium==

Prior to privatization the water works of Cochabamba were controlled by the state agency SEMAPA. After pressure from the World Bank, Bolivia put SEMAPA up for auction for privatization but not capitalization. Only one party was willing to bid on the project. This was Aguas del Tunari, a consortium between the British firm International Waters (55 percent) - itself a subsidiary of the construction giant Bechtel (USA) and United Utilities (UK) - the engineering and construction firm Abengoa of Spain (25 percent) and four Bolivian companies including Befesa/Edison, Constructora Petricevic, Sociedad Boliviana de Cemento (SOBOCE), Compania Boliviana de Ingenieria and ICE Agua y Energia S.A., all involved with the construction and engineering industry. The water network that they envisioned was projected to provide drinking water to all 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 del 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." ==Law 2029==

To ensure the legality of the privatization the Bolivian government passed law 2029, which verified the contract with Aguas del Tunari. To many people, the law appeared to give a monopoly to Aguas del Tunari over all water resources. Many feared that this included water used for irrigation by peasant farmers (campesinos), and community-based resources that had previously been independent of regulation. The first to raise concerns over the scope of the law was the new Federación Departamental Cochabambina de Regantes (FEDECOR) and its leader Omar Fernandez. For many Bolivians, the implementation of law 2029 and the concessions that accompanied it symbolized all the issues of the neoliberal development strategy—its obvious lack of concern for equity, its rejection of the role of the state, and in a country with a very long tradition of anti-imperialist rhetoric, the law represented a preferential attitude to foreign capital over the national interest. This opposition expressed by the community arose from across the political spectrum. The traditional left claimed that the transfer of state property to private enterprises was unconstitutional while the right opposed the denationalization of enterprises that it considered vital and strategic. ==Rate hike==

As a condition of the contract Aguas del Tunari had agreed to pay the $30 million in debt accumulated by SEMAPA. They also agreed to finance an expansion of the water system, and began 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 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 del 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, it was a condition of their contract, as it was backed by an influential member of Banzer's mega-coalition, the mayor of Cochabamba, Manfred Reyes Villa. 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 quash 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 del 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 del Tunari staff had come from, many of their new customers 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 del Tunari. ==Protests and state of emergency==

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, 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. This was the seventh time since Bolivia returned to democracy in 1982 that the "state of siege" decree had been employed. Also, on April 9, 2000, 800 striking police officers fired tear gas at soldiers (to which the soldiers 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 (later elected President of Bolivia in December 2005) had joined the demonstrators and were demanding an end to the United States-sponsored program of coca eradication of their crops (while coca leaf 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 rejected 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 (at the time they made $1,000 a year). In the capital city of La Paz students began to fight 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 Víctor Hugo Daza in the face, killing him, intense anger erupted. 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 Víctor Hugo Daza's funeral, Óscar 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 11 April 2000 the law was changed. ==Aftermath==

World Bank and continuing protests On 12 April 2000 when asked about 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." The Cochabamba protests of 2000 are chronicled by Olivera in his book Cochabamba! Water Rebellion in Bolivia. Legal settlement On 19 January 2006, a settlement was reached between the Government of Bolivia (then under the Presidency of Eduardo Rodriguez Veltze) and Aguas del Tunari, it was agreed (according to the Bechtel press release) 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 the shareholders withdrew any financial claims against Bolivia. 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 Víctor Hugo Daza. After Iriarte's acquittal, he was promoted to the rank of major. 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 after Aguas del Tunari was forced out, other international companies are unwilling to give them more loans). 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." == 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 the clauses of the contract. According to the Bolivian ambassador Pablo Solón Romero, the International Finance Corporation (IFC), 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. ==In popular culture==

• Even the Rain (Spanish: También la lluvia) is a 2010 Spanish drama film directed by Icíar Bollaín about filmmaker Sebastian (Gael García Bernal) who travels to Bolivia to shoot a film about the Spanish conquest of America. He and his crew arrive in 2000 during the tense time of the Cochabamba water crisis. • The Cochabamba protests were featured in the 2003 documentary film The Corporation. • The plot of the 2008 James Bond film Quantum of Solace is heavily based on the Cochabamba Water War. == See also ==