March 4, 2003
Bolivian Water Officials Call on World Bank to Acknowledge, Discuss Cochabamba Privatization Disaster at This Week’s Water Conference
Bank-Led Water Fiasco in Bolivia Omitted From “Water Week” Discussion
WASHINGTON, D.C. – Bolivian water officials are calling on the World Bank to include in this week’s international water conference a discussion of the privatization disaster in Cochabamba, the Bank’s most notorious failure in its push for privatization.
The Bank, convening an international conference on water issues today in Washington, D.C., has conspicuously left off the list of discussion topics the failure of water privatization in Cochabamba, Bolivia, which occurred as part of the Bank’s worldwide push for water privatization.
In a letter sent last week to World Bank officials, Cochabamba water officials demanded that the forum take up the devastating impact of water privatization.
“We think this is a critical opportunity for water officials to look at the real experience of privatization in Cochabamba, ” the letter said.
Three years ago, under direct pressure from the World Bank, the government leased the public water system of its third largest city to a subsidiary of the San Francisco-based Bechtel Corporation. When Bechtel charged poor consumers rates far beyond what they could afford, citizens rebelled and forced Bechtel to return the water system to public hands. A 17-year-old boy was killed and more than a hundred others were injured in the anti-Bechtel protests.
“The World Bank believes in water privatization as a matter of theology,” said Jim Shultz, executive director of The Democracy Center, based in Cochabamba. “Bank officials forced that theology onto Bolivia by directly threatening to withhold up to $600 million in debt relief if the government didn’t privatize the water. Now Bank officials would like to keep the Bolivian water fiasco from coming up at their Washington cheerleading session for privatization. After the international attention Cochabamba received, it’s a glaring omission.”
“The Bank is no doubt wary of including the whole story because it’s such a delicate time for proponents of water privatization,” added Sara Grusky, a water policy analyst with Public Citizen. “With the recent failure of projects in cities as far apart as Manila, Buenos Aires and Atlanta, putting a happy face on water privatization at this conference will depend a great deal on what is left out. Far from providing access to clean and affordable water, privatization has meant rapid increases in consumer water rates, public health crises, job losses, secret deals and weak regulation. “
The World Bank has invited water officials from all over the world to the three-day conference on “Water and Development.” Featured topics include “Beyond the Public-Private Debate” and “New Approaches to Private Sector Participation” (Click here to view a full program). The director of Cochabamba’s new public water company, Gonzalo Ugalde, was invited less than two weeks before the session was to open – and only as an observer. There is no scheduled forum for talking about the Bank policy of forced privatization or notable failures such as in Cochabamba.
The World Bank’s water conference comes just weeks after the announcement by a secret World Bank trade tribunal that it would not allow the public or media to participate in or even witness proceedings in which Bechtel is suing the government and people of Bolivia for $25 million. The panel, whose chair was appointed by World Bank President James Wolfensohn, rejected an international citizens petition calling for an opening of the case, endorsed by more than 300 citizens groups from more than 43 countries. (Click here to view a release issued by the petitioners at the time of the decision.)
“The World Bank is not only imposing its ideas and programs on us, it is also preventing the people affected from participating in a case that directly affects our lives,” said Oscar Olivera, a leader of the coalition of Bolivian peasants, workers and others that formed in opposition to Bechtel. “This is profoundly undemocratic.”
Bechtel’s legal action is being heard by the International Center for the Settlement of Investment Disputes (ICSID), a tribunal administered by the World Bank that holds all of its meetings in secret. Bechtel is suing Bolivia for the profits it claims it would have made from the water privatization scheme had the rate hike protests not led to its unplanned departure from the city of Cochabamba in April 2000. (Click here to view a background story)