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Bolivia menu - water de-privatization just a pipe-dream?

Date: 10 Apr 2000 08:12:49 -0400

This menu comprises several reports - the final item was posted by The Democracy Center, - which has addresses both in Cocachamba and california - and was published in Saturday's San Jose Mercury News.

Unfortunately the posted story - dated Friday - about the Archbishop having persuaded to Bechtel-linked water company to withdraw from its privatization contract - seems to have been superceded by government action. So the promise of de-privatization may only be a pipe-dream


Agence France Presse
Monday, April 10 12:50 AM SGT

Tense calm settles on Bolivia, police strike ends

LA PAZ, April 9 (AFP) -

A tense calm settled on Bolivia Sunday after a day of violent protests that left two dead and dozens injured in reaction to a government-declared state of emergency, as a police strike ended in the capital.

The government agreed to a 50-percent pay increase for lower level police officers here and guaranteed that the officers who participated in the weekend strike will not face repercussions. Until now, rank and file police earned between 70 and 100 dollars a month.

In the city of Cochabamba, the center of clashes between demonstrators protesting a water project and the military that led to the state of emergency, the streets were quiet Sunday, according to local authorities.

Due to the state of emergency, all of the country's airports are being patrolled by the military while police conducted routine controls.

Saturday, Bolivia's government declared a state of emergency to quell unrest, but the move only angered protesters further and sparked new clashes with authorities.

The 90-day state of emergency, which gives President Hugo Banzer special powers, was declared early Saturday amid continuing unrest in Cochabamba and a new protest by members of a police unit in La Paz.

A 16-year-old protester died after being shot in the head while the army tried to remove a barricade erected by demonstrators.

Protesters also said that four people received bullet wounds in Cochabamba, but police have insisted they are only firing pellets and using tear gas.

The unrest has unsettled officials in Washington, who urged US citizens in Bolivia to exercise extreme caution, and discouraged Americans from traveling to the country.

"While the Bolivian government is working to deal with the situation, it is recommended that US citizens not attempt to pass through or circumvent" roadblocks set up by the government around Cochabamba, the US State Department said in a statement issued late Saturday.

"Although US citizens are not specifically targeted, travelers should be aware that road and airport closures outside of La Paz inhibit travel within the country at this time," the State Department said.

Protest leaders called for the demonstrations to intensify after the arrest of one of their leaders, Felipe Quise Huanca, who was among at least 25 people detained by authorities following the emergency order.

Information Minister Ronald MacLean said the emergency order was issued to restore calm and could be rescinded when "law and order are re-established."

"Chaos is beginning to spread just at the moment when the nation is starting a process of economic recovery," MacLean said in a statement.

According to unconfirmed reports, the government is considering sending a delegation to Cochabamba to try to end the almost week-long protest over a proposal by a Italian-Bolivian consortium to build a dam.

The project faces strong opposition from peasants, coca growers and others who fear it could lead to excessive rate increases for services. Protesters also have been blocking roads in other parts of Bolivia.

MacLean said an announced end to the protests late Friday was the result of erroneous statement from a local official who indicated that the consortium had given up a contract to build the controversial dam.

MacLean said the local prefect, Hugo Galindo, "overstepped his authority" and had been relieved of his duties and replaced by a police commander for the region.

In La Paz, the police strike began when officers refused an order to arrest one sergeant and 13 wives of low-ranking police officers who had been on a hunger strike since Monday seeking 150 percent wage hikes.

Other units were sent in to arrest the hunger-strikers, who were occupying the Bolivian Workers Union (COB) headquarters.

2000 RTE News & RTE Online (Dublin) Sunday, April 09 2000

Bolivian unrest intensifies after declaration of state of emergency

Hugo Banzer Suarez given new powers under state of emergency

The Bolivian government's move of declaring a state of emergency yesterday has further angered protesters and sparked new clashes with authorities. Two people have been killed and an estimated 25 injured in renewed clashes as thousands of people demonstrate against a waterworks projects that will raise the price of water by up to 35%. The 90-day state of emergency, which gives President Hugo Banzer special powers to deal with the crisis, was declared early yesterday. It was declared amid continuing unrest in Cochabamba and a new protest by members of a police unit in La Paz.

Leaders of the Single Union for Rural Workers Confederation said that one protester, who has been identified as Rogelio Callisaya, was shot dead in a clash in La Huachaca, 180 kilometers south of La Paz, and that three others were injured. Government officials confirmed that the protester had died, but said that it was as a result of "cardiac failure" while participating in a roadblock. A 16-year-old protester died after being shot in the head while the army tried to remove a barricade erected by protesters. Protesters also said that four people received bullet wounds in Cochabamba, but police have insisted that they are only firing pellets and using teargas.

About a dozen police have been injured as they patrolled the city, suffering wounds from the rocks and other objects thrown by protesters. Protest leaders called for the demonstrations to intensify after the arrest of one of their leaders, Felipe Quise Huanca, who was among at least 25 people detained by authorities following the emergency order.

BBC Monday, 10 April, 2000, 00:30 GMT

Bolivia protests claim further lives

Demonstrators marched again in Cochabamba

Sporadic fighting has continued in Bolivia, despite a state of emergency declared on Saturday to smother a week of violent protests.

The government called the army onto the streets after protests over water price rises spiralled into violence. At least eight people have died over the weekend.

On Sunday, thousands of farmers angry over the government's handling of an economic slump gathered on the outskirts of the country's third largest city, Cochabamba. Thousands more rallied in the main square.

A commission headed by Vice-President Jorge Quiroga was en route to the central city to negotiate an end to a massive strike called to protest against the new water rates.

In the Andean foothill town of Achacachi, Indian farmers clashed with security forces trying to remove roadblocks.

Two farmers, two soldiers and a police officer were killed, a government spokesman said.

Three protesters were reported dead in separate clashes with police on Saturday.

In the capital, La Paz, and Santa Cruz, hundreds of police officers marched on their own headquarters demanding a 50% pay increase.

Officers in the capital fired tear gas at soldiers monitoring the protest, while thousands of students and other supporters gathered to show their support for the striking police.

In both cities, police won their salary increases.

President Hugo Banzer imposed a 90-day state of emergency on Saturday allowing for arrests without warrants, restricting the right to protest and establishing a curfew.

The demonstrations began in Cochabamba over a $200m waterworks project that will increase the cost of drinking water by up to 35%.

A law, currently under debate in parliament, would force farmers to pay for water they currently get free.

The president, a former coup leader and military dictator who was elected to power in 1998, has stated he will not back down on the water rates, insisting they are necessary for economic development.

This is the seventh time that a state of emergency has been declared since democracy returned to Bolivia in 1982.


Sunday, April 9th
Cochabamba, Bolivia

Dear Friends:

The situation here in Bolivia remains critical. Since the declaration of martial law yesterday at least three people have been killed, including a 17 year old boy shot by soldiers with live ammunition here in Cochabamba. More than 30 people in Cochabamba alone have been injured from conflicts with the military. Respected leaders of the water protests have been jailed, some flown to a remote location in Bolivia's jungle. Soldiers continue to occupy the city's center. However, there is now something very real and straightforward you can do to help.

The massive protests that prompted the declaration of martial law here were prompted by the sale of Cochabamba's public water system to a private corporation (Aguas del Tunari, owned by International Water Limited) which then doubled water rates for poor families that can barely afford to feed themselves. It turns out that that the main financial power behind that water corporation in the Bechtel Corporation, based in San Francisco (Source:

The people of Bolivia have made it very clear that they want Bechtel out. The Bolivian government is so committed to protecting Bechtel that it has declared martial law and killed its own people. While some in the government here are saying this afternoon that Bechtel will leave, given the government's reversal on the same promise Friday the statement has no credibility here ansent a written agreement and end to martial law. It is critical that pressure be brought to bear directly on Bechtel in the US.

You can help, here's how:

  1. Send an e-mail, letter, fax or make a phone call to:
    Riley Bechtel, Chairman and CEO, Bechtel Corp
    Tel: (415) 768-1234
    Fax: (415) 768-9038
    Address: 50 Beale Street, San Francisco, CA 94105
  2. The Message:
    "Bolivians have made it absolutely clear that they want Bechtel's water company, Aguas de Tunari, out of Bolivia, through a week of huge protests that have nearly shut down the country. To protect Bechtel, the Bolivian government has now put the country under martial law, leaving many dead and wounded. Bechtel has a responsibility to honor the wishes of Bolivians and bring the crisis to an end by immediatley signing an agreement to turn the water system back over to Bolivians."
  3. Please send this information as far and wide as you can. More than 1,000 other are receiving this message today. Even 100 e-mails ro calls to Bechtel Monday will make an enormous difference.

To give you some additional context on events here I am including below an article, which I published in Saturday's San Jose Mercury News. The article went to press just before the government reversed position and declared martial law.

Many thanks,

Jim Shultz
The Democracy Center



In a stunning concession to four days of massive public uprisings, the Bolivian government announced late Friday afternoon that it was breaking the contract it signed last year that sold the region's water system to a consortium of British-led investors.

A general strike and road blockades that began Tuesday morning in Cochabamba shut down the city of half a million, leaving the usually crowded streets virtually empty of cars and closing schools, businesses and the city's 25-square-block marketplace, one of Latin America's largest.

The government's surprise agreement to reverse the water privatization deal follows four months of public protest. It came just as it appeared that President Hugo Banzer Suarez was preparing to declare martial law, possibly triggering fighting in the streets between riot police and the thousands of angry protesters who seized control of the city's central plaza.

Greater meaning

While rumors are surfacing that the government might backtrack on their promise, for Bolivians the popular victory apparently won over water has much wider meaning. "We're questioning that others, the World Bank, international business, should be deciding these basic issues for us," said protest leader Oscar Olivera. "For us, that is democracy."

The selling-off of public enterprises to foreign investors has been a heated economic debate in Bolivia for a decade, as one major business after another — the airline, the train system, electric utilities — has been sold into private (almost always foreign) hands. Last year's one-bidder sale of Cochabamba's public water system, a move pushed on government officials by the World Bank, the international lending institution, brought the privatization fight to a boil.

In January, as the new owners erected their shiny new "Aguas del Tunari" logo over local water facilities, the company also slapped local water users with rate increases that were as much as double. In a city where the minimum wage is less than $100 per month, many families were hit with increases of $20 per month and more.

Tanya Paredes, a mother of five who supports her family as a clothes-knitter, says her increase, $15 per month, was equal to what it costs to feed her family for 1 1/2 weeks. "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.

Public anger over the rate increases, led by a new alliance, known here as "La Coordinadora," exploded in mid-January with a four-day shutdown of the city, stunning the government and forcing an agreement to reverse the rate increases.

In early February, when the promises never materialized, La Coordinadora called for a peaceful march on the city's central plaza. Banzer (who previously ruled as a dictator from 1971-78) met the protesters with more than 1,000 police and an armed takeover of La Cochabamba's center. Two days of police tear gas and rock-throwing by marchers left more than 175 protesters injured and two youths blinded.

February's violent clashes forced the government and the water company to implement a rate rollback and freeze until November, and to agree to a new round of negotiations.

Deal scrutinized

Meanwhile, La Coordinadora, aided by the local College of Economists, began to scrutinize both the contract and the finances behind the water company's new owners. While the actual financial arrangements remain mostly hidden, the city's leading daily newspaper reported that investors paid the government less than $20,000 of upfront capital for a water system worth millions.

Amid charges of corruption and collusion in the contract by some of the officials who approved it last year, La Coordinadora announced what it called la última batalla (the final battle), demanding that the government break the contract and return the water system to public hands. The group set Tuesday as the deadline for action.

Government water officials warned that private investors were needed to secure the millions of dollars needed to expand this growing region's water system. They argued that breaking the contract would entitle the owners to a $12 million compensation fee, and pleaded for public patience to give the new owners time to show the benefits of their experience.

Among the vast majority of Cochabamba water users, however, that patience had run out. Two weeks ago, an inquiry surveyed more than 60,000 local residents about the water issue and more than 90 percent voted that the government should break the contract. During one of the marches this week protesters stopped at the water company's offices, tearing down the new "Aguas del Tunari" sign erected just three months ago.

Tuesday, city residents took to the street with bicycles and soccer balls — only a few cars moved across town to take advantage of the day off from work and school. By Wednesday, armies of people from the surrounding rural areas, fighting a parallel battle over a new law threatening popular control of rural water systems, began arriving, reinforcing the road blockades, and puncturing car and bicycle tires. Thursday night, with another day of wages lost and no sign of movement from the government, public anger started to erupt.

Protesters arrested

A crowd of nearly 500 surrounded the government building where negotiations, convened by the Roman Catholic archbishop, were taking place between protest leaders and government officials. In the middle of negotiations, the government ordered the arrest of 15 La Coordinadora leaders and others present in the meeting.

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

In response, thousands of city and rural residents filled the city's central plaza opposite the government building, carrying sticks, rocks and handkerchiefs to help block the anticipated tear gas. Television and radio reports speculated all day that the president would declare martial law, and there were reports of army units arriving at the city's airport.

Freed from jail early Friday morning, the leaders of water protests agreed to a 4 p.m. meeting with the government, called by the archbishop. At 5 p.m., government officials still had not arrived and the plaza crowd waited tensely for the expected arrival of the army.

Suddenly and unexpectedly, the archbishop walked into the meeting and announced that the government had just told him that 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.

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