Cochabamba protests of 2000

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The Cochabamba protests of 2000 were a series of protests that took place in the Bolivian city of Cochabamba between January and April 2000, because of the privatization of the municipal water supply, which was sold to a private company, International Waters Limited (IWL) of London (a subsidiary of Bechtel Corporation; it operated locally as Aguas de Tunari), at the insistence of the World Bank. In its June 1999 report on Bolivia, it specifically called for the cessation of "public subsidies" to keep down water prices. Corruption was a large problem in Cochabamba before privatization, and many citizens received no water at all. According to local press reports, the foreign investors acquired the city water system, in a sale in which they were the only bidder, for less than US$20,000, of up-front capital for a water system worth millions of dollars. Bechtel states that they only purchased the rights to run the water system, which was still owned by the city.

Demonstrations erupted when Aguas de Tunari, a subsidiary of Bechtel, imposed a large rate increase, reportedly to finance the Misicuni Dam project, a week after taking control of the Cochabamba water supply system. In a country where the minimum wage was less than US$70 per month, many dwellers were hit with monthly water bills of $20 or more. These water bills, however, were cheaper than the average South American water bill, and were set by the city, not by Bechtel.

According to Water for Sale, by Fredrik Segerfeldt, Cato Institute, 2005, notes that the mayor of Cochabamba had ties with construction companies that would profit from building the dam and he forced the dam on Aguas de Tunari, against the advice of the World Bank. An alternate plan not requiring a dam, tried in 1997, was blocked by the mayor. Mr. Segerfeldt notes that "The local political situation was a mess of patronage, populism and vanity projects."

In mid-January, Cochabamba residents shut down their city for four straight days with a general strike led by a new alliance of labor, human rights and community leaders. The government was forced to the negotiating table, agreeing to a price rollback and a two-week deadline to work out the details; the protests ended.

Pressing for a settlement, on February 4, 2000, thousands attempted to march peacefully in Cochabamba. But President Hugo Banzer — who was Bolivia's dictator for most of the 1970s — turned once again to the use of violent repression. He called out the police, who engulfed protesters in tear gas for two days, leaving six people dead and 175 injured, including two children blinded.

The people of Cochabamba did not back down. In a survey of more than 60,000 residents in March, 90% said that Aguas del Tunari must leave and the water system returned to public control. Protesters pointed to the privatization of water in Buenos Aires, where 7,500 workers were fired and prices rose, as an example of why they felt privatization was bad. Residents closed down the city again starting on April 4.

Four days into the demonstrations, the government declared martial law. Police arrested protest leaders, taking them from their beds in the middle of the night, shutting down radio stations in mid-broadcast. Soldiers took over control of the streets. On April 8, the military shot 17-year-old Víctor Hugo Daza in the face, killing him. IWL officials claimed that the protests were riots sponsored by cocaine producers against a crackdown on coca production.

However, on April 10, the government finally conceded, signing an accord that agreed to every demand the protesters had made. Since then, Bechtel Corporation has been trying to sue the Bolivian state in order to recover its investment; the request was deposed before the International Centre for Settlement of Investment Disputes (ICSID), a court dependent of the World Bank.

Afterwards, according to Mr. Segerfeldt, "the poor of Cochabamba are still paying 10 times as much for their water as the rich, connected households and continue to indirectly subsidize water consumption of more well-to-do sector of the community. Water nowadays is available only four hours a day and no new households have been connected to the supply network."

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