Fighting Privatization in Bolivia

Latin American politicians like Hugo Chavez and Evo Morales have recently made a name for themselves resisting a popular idea: that developing the “developing world” means accepting a role for privatization – usually a role for powerful corporations from the developed world. Many international development programs (from the World Bank, IMF and WTO), make privatization of utilities, infrastructure and other essential services a prerequisite for debt relief. Globally, this provokes domestic crises when the poor rise up against unaffordable rates for things like water and power.

Bolivia has been especially active in this struggle of the poor against the rich.

In 2000, the so-called “Cochabamba Water Wars” flared up when a consortium of corporations (called Aguas del Tunari) tried to privatize the city of Cochabamba’s municipal water supply, and were met with mass protest. The World Bank threatened to cancel its $25 million loan unless the utility was privatized, the contract went through, water prices soared, and the public rose up in protest. In a country where minimum wage was less than US$70 per month, many dwellers were hit with monthly water bills of $20 or more. A four-month brawl between protesters and police ensued, with protest spreading from Cochabamba to other cities La Paz, Oruro, and Potosí. The government declared a state of siege, and eventually canceled the contract, provoking extensive legal action from Aguas del Tunari and the World Bank.

In 2005, the capital La Paz was gripped by more water wars. The capital’s water supply was slated to be privatized under a group called Aguas del Illumani (owned by France’s Suez Lyonnaise company). This time, faced with a general strike and a blockade of roads that isolated the city, Bolivian President Carlos Mesa canceled the contract. As British MP Alan Simpson put it,

Since privatisation in 1997, the company has pushed up water prices by 35% in regions where 60% of the population lives in poverty. Despite this, the World Bank gave the company a launch hand-out of $68 million and declared that it highlighted “the vital role of the private sector in providing the future infrastructure services in Bolivia”.

In 2006, Bolivia opened another round of resistance by nationalizing its oil and gas industry in order to keep multinational hands off of it (as Russia, Saudi Arabia, Iran, Brazil and Venezuela have also recently done – see New York Times story here). Neighbors Peru and Equador are taking a similar strategy.

What interests me in this recent history is that Bolivians are not only fighting for control of particular resources or infrastructures. While they take to the streets to protest private water or gas companies and their rising rates, they also protest something bigger – the growing global, hegemonic trend of American-style privatization of everything. They protest the power of multinational corporations and their buddy-buddy connections with organs of international governance like the World Bank. Finally, they protest the idea that “development” works best when overseen by powerful, private, for-profit multinational corporations. They show that what often counts as “development” is simply capitalist-imperialist exploitation that would make Lenin say “I told you so.”