The Elixer of Greed

If we win here we will win everywhere. The world is a fine place and worth the fighting for and I hate very much to leave it.
-Ernest Hemingway

On April 2000 in Bolivia, a mob marched towards the city's central plaza carrying the dead body of a 17 year old, defying the government imposed siege. The country's military, confronts them with force and tear gas. Soon violence engulfs the plaza and pandemonium sets in. Days later, a machinist worker, comes out of a meeting announcing victory to his people. Thunderous applause followed by the slogan, "...people, united, will never be defeated..." could be heard. Few miles from that building, some senior executives of a multi national corporation are seen boarding a fight bound to take them home. They look lost and dejected. These men, who earned their stripes winning several board room brawls against smart suits, lost to a bunch of poor, mostly illiterate people from one of the most poorest countries in this world. For once, natural justice prevailed. This incident happened at the turn of this century and is a lesson to all. As master card promo says, "Some things in life are priceless". This is one such priceless story of David slaying Goliath. Only that this Goliath had all the powers that could be had and our David an exact antepodean of this Goliath couldn't be anymore humble and modest.

Background

Bolivia got it independence from Spain in 1825. Until 1950s, Bolivia lost a considerable portion of its land to its neighbours through constant wars and tussles. Every government was plagued by internal and cross border conflicts. By 1980s, social and political unrest became a way of life. Due to constant bickering, social and economic welfare policies took a backseat. By the turn of 21st century, Bolivia was one of the world's most backward countries in the world and not just Latin America. Its super star export product was coco, the raw material used to manufacture cocaine. Enough said.

In the year 1997, ex dictator Hugo Banzer won the general elections promising social welfare and increased state control over businesses. However, he had very little leash considering the perilous nature of his economy. Inflation was spiraling towards obscene levels and the government reserves were vanishing at record rates.

Cometh the hour cometh the sleaze merchant

All bird brained modern governments seem to have only one answer to economic and fiscal pressures. A loan from world bank. As a good friend, world bank never said no to "needy" countries. Bolivia ran to World Bank for loan to which, world bank duly obliged. However, these loans hinged on certain "policy restructuring" to which Bolivia accepted. World Bank proposed measures/plans to privatise state assets and move them into private hands. In no time, oil, railways, airlines, telecom and electric supply were in private hands. These steps gave short term relief to Bolivian government from mind boggling inflation and dwindling reserves. They never created sustainable means of wealth/welfare generation. In late 1997, it went to World Bank with a proposal to improve water supply in major cities in Bolivia.

When the loan for water service improvement was discussed, world bank "asked" the Bolivian government to privatise the water supply system and remove all subsidies to the public. World Bank's assertion of privatizations is that the public system is often plagued by inefficiencies and other bureaucratic bottlenecks. It stated that a private entity will not only improve the system's efficiency, but also bring in much needed capital and technology know-how to improve the system.

World bank's insistence on removal of government subsidy to reduce the burden on public was comic if not absurd. It stated that any service, given at free or very low cost leads to waste and improper usage and when people are charged at the market rate, they will spend wisely and sensibly. Who said they cared about public welfare anyway ?

Aguas del Tunari consortium

The byproduct of the world bank loan is the contract awarded to Aguas del Tunari to provide water to the city of Cochabamba for 40 years, essentially taking over from local public company SEMAPA. Aguas del Tunari is a consortium of International Waters Limited (IWL) of England, Abengoa of Spain and some local companies. IWL, which owned 55% of Aguas del Tunari is a 50% subsidy of Bechtel holdings thereby making Bechtel the controlling partner of Aguas del Tunari.

Key points in the contract:

- The contract is to provide water supply to house holds along with electricity generation and irrigation for agriculture.
- Bolivian government agreed to removing all forms of water subsidies to the public
- The contract gave Bechtel control of local lakes and other community water resources built by local peasant population which was not controlled by SEMAPA.
- Bechtel to pay the $30 million debt accumulated by SEMAPA.
- Bechtel agreed to fund the completion of the stalled but controversial Misicuni Project due to pressure from local Mayor. This project faced many road blocks due to the technical challenges and perceived poor returns compared to the resource invested.

But the real icing on the cake is the clause that guaranteed Aguas del Tunari an annual return on investment of 16%. In other words, Aguas del Tunari had a free hand to charge the people, any amount to cover their investment and guaranteed profits. When the agreement was signed, 40% of Cochabamba was not even connected to the public water supply. By November 1999, Bechtel took control of Cochabamba's water supply facilities from SEMAPA.

Law 2029

In order to transfer control to Bechtel and ensure that people were charged at prevailing market rates, it became essential to make water as a merchandise and not a utility. The Bolivian government passed law 2029 to this effect. It was a broad scoped legislature giving Bechtel complete control over all water resources of Cochabamba. In addition to stopping all water related subsidies to the people, it empowered Bechtel to install meters on all community lakes and wells built by locals over which, government had no control earlier. To add insult to injury, Bechtel was at liberty to collect installation charges for these meters as well. The law necessitated civilians to get appropriate certificates to harvest rain water from their own roofs. However ridiculous and impractical this clause sounds, it showed the kind of clout Bechtel and World Bank executives had over the Bolivian government. Apparently, the law was received with stiff opposition. The Federación Departmental Cochabambina de Regantes (FEDECOR), a group of local engineers and environmentalists was the first to voice the displeasure over the law.

Expansion Plans and Tariff Hikes

To cover the proposed maintenance activities and Miniscui Project, monthly water tariffs were hiked from 30% to almost 300% in the first month. Families which earned $100 a month were slapped with $20 bill for water usage. Any default on paying the water bills resulted in asset confiscation and people ended on the street. Within a month, people were forced to choose between water and children's education. Suddenly, paying their monthly water bills became a priority for them. Perhaps the most enraged and affected by this regime change were the peasants who relied on community wells and lakes for irrigation. Since the agreement made Bechtel responsible for irrigation and electricity generation, it charged the peasants for using the community wells.

Opening Honours

In January 2000, engineers and environmentalists of Cochabamba organised against the government for water rate hikes. When it became clear that Bechtel was the real player, FEDECOR demanded for Bechtel's removal and restore the control of water back to SEMAPA. Soon the industrial factory employees union joined FEDECOR and the peasants thereby expanding the scope and intensity of protests. This gave birth to La Coordinadora Por la Defensa del Agua y la Vida (Coördinator for the Defense of Water and Life) or simply, La Coordinadora. This marriage brought the leader of industrial factory employees union very much into the thick of things. A machinist and staunch believer of workers' rights, this 45 year old leader, would soon became the poster boy of Latin American socialism. He answer's the name of Oscar Olivera. Initially, the protestors blocked highways connecting different parts of Bolivia to its capital and airport. This siege lasted for 4 days and the government started to take note of the protests. By now, women and children joined the protestors against the government. They provided food/water/accommodation to the protestors whenever the need arised.

The empire fights back

Towards the end of February, and no hopeful measures from government, La Coordinadora decided to take things in their own hands. They invited everyone to a referendum on water privatization. An overwhelming majority (97%) voted against Bechtel's takeover. Slowly the protests started spreading to urban areas of Cochabamba and local businesses got involved. One part of Bolivia was completely cut-off from the other and worst affected was the airport traffic from capital.

When situation went from bad to worse, the president did what he does best. He suspended democracy and brought military to the city. He appointed, the local police chief as the governor of Bolivia. This "emergency government" now comprised of President, Governor(cum police chief cum hitman) and Mayor all known for pro US business interests. Soon military took control of the local radio station to prevent La Coordinadora's propaganda. Lots of reporters were arrested for spreading false/in factual news and charged with anything and everything. Slowly, they took on La Coordinadora's leadership and arrested about 20 leading demonstrators. Some even went into hiding.

The Crescendo

As April dawned on Cochabamba, there was no let-up from both sides. The locals kept going with their shutdown strategy while military and local police retorted with tear gas and arrests. As things moved towards a crescendo, on 8th April 2000 a highly decorated military official, Captain Robinson Iriarte de la Fuente, did something that galvanized the locals and hardened their resolve. Captain Iriarte, dressed in civilian clothing took aim at an angry, unarmed mod and shot at them. A 17 year old teenager, Victor Hugo Gaza was shot in the face and died almost immediately. The local Bolivian news network caught this on camera and telecasted it soon. Condemnation followed with Oscar Olivera leading them. He said, "The blood spilled in Cochabamba carries the fingerprints of Bechtel". This sad and tragic incident, garnered popular support to protestors all over the world. One thing became clear. There is no going back for both the parties now. Someone was going to win and win big. People of Cochabamba decided that they will win this war at all costs.

Dawn and New Hope

Many of la Coordinadora's leaders went into hiding due to repressive measures taken by the government. After the shoot out, they all came back to lead a protest march towards the city plaza carrying the dead body of Hugo Gaza. Women, men, children, old and young, rich and poor everybody joined the march. After pounding the protesters with tear gas, rubber pellets, live ammunition and arrest, the Bolivian president finally relented. Few days later, he scrapped the contract with Bechtel and gave the control to La Coordinadora. After months of protests, 6 deaths, 175 injuries, it was over. The people of Cochabamba won a four month battle against their mighty foes. When Oscar Olivera announced this news to the waiting public, he was greeted with loud cheers from the ordinary men who made it possible. These people from very humble backgrounds brought down a government to the knees and kicked-off an MNC from their country. They proved that the voice of common man is paramount and ultimate. No amount of power, money and force could break their will. Not only they kicked-off Bechtel, La Coordinadora gained control of the water supply board.

The incident of Cochabamba proved once again that nothing is impossible to someone who put their mind to something and work relentlessly towards fulfilling it. The people declared in no uncertain terms that water is their right and cannot be controlled by vested foreign interests and showed the whole world what they are capable of. Perhaps the last words must belong to Oscar Olivera.

"At the climax of the struggle, the army stayed in their barracks; the police also remained in their stations; the members of Congress became invisible; the Governor went into hiding; and afterwards, he resigned. There wasn't any authority left. The only legitimate authority was the people gathered at the city square making decisions in large assemblies. And, at the end, they made the decisions about the water. I think people, all of us, young and old, were able to taste, to quench our thirst for democracy"



Senthil Nathan M