The World Bank Tries to Re-Write Bolivian History

As any Bolivian newspaper reader knows, paid political propaganda is a staple of the Sunday editions. Running full-page ads, or whole inserts, aimed at self-promotion is a practice that crosses ideological lines.

In the same edition readers might be treated to twenty column inches of Evo Morales wrapping himself in the wonders of Bolivia's new aid plan for the elderly, side-by-side with four pages of photos of Cochabamba Governor Manfred Reyes Villa cutting ribbons at newly paved roads. All this of course is at Bolivian taxpayer expense.

Well, now the World Bank's Bolivia office has decided to get into the propaganda game. This month it produced a snazzy little 22-page booklet that it is distributing by the tens of thousands in three major Bolivian dailies, in La Paz, Cochabamba, and Santa Cruz. The booklet is titled, "Ten Things They Never Told You About the World Bank in Bolivia."

There is, however, a good reason that Bolivians aren't used to hearing some of the Bank's ten boasts – it's because they aren't true. In fact, a few of the Bank's claims wander so far into fiction that one wonders whether the Bolivia office has hired Pinocchio and Associates Inc. as its new public relations firm.

Inside the Imagination of the World Bank: We Won the Bechtel Case for You!

The real whopper among the Bank's claims is 'Thing They Never Told You #6': "The Aguas del Tunari Conflict [the Bechtel vs. Bolivia case] was resolved by an arbitration facilitated by the World Bank."

The Bank writes:

In 2002, after being expelled from Cochabamba the company Aguas Del Tunari [Bechtel's subsidiary] presented a demand before ICSID [The International Center for the Settlement of Investment Disputes, the World Bank-operated trade court]. In the end the controversy resulted in favor of the Bolivian state, which bought the shares of the company for a price of 2 dollars. This shows that arbitrations can prevent trials against countries and serve to resolve conflicts.

Perhaps a short look at the facts the Bank seemed to miss:

First, it was the World Bank itself that set the entire Bechtel-in-Cochabamba fiasco in motion. In 1997 the Bank made privatizing Cochabamba's water a condition of any further aid for expanding water service in the country. In the aftermath of the 2000 Water Revolt – following the bloody death of a 17-year-old boy and the wounding of more than a hundred others – Bank officials went to work to disclaim any connection to the privatization. But even those denials ended after The Democracy Center led reporters to a World Bank report confirming the Bank's demand that the water be privatized.

Second, the World Bank did not protect Bolivia from facing a case against it by Bechtel. It provided the venue where Bechtel filed the case, shielded from the public and press. Under the Bank's helpful graces Bechtel sought $50 million from Cochabamba water users, after having invested less than $1 million.

In 2002 when Cochabamba water users petitioned the Bank to open the case to public participation and media scrutiny, a tribunal headed by a World Bank appointee rejected the request, insisting that the case be handled in secret. Not surprisingly, none of this appears in the Bank's little booklet.

It seems quite clear that the Bank would love for Bolivians to believe that the Bank itself deserves credit for the case being settled for pennies. That honor however, goes not to the institution that aided Bechtel, but to Bolivian Waqter Revolt leaders and the thousands of citizens on five continents that pressured Bechtel to drop its Bolivian demand.

Other Bedtime Stories from the Bank

The Bolivia office of the World Bank's attempt at spin does not end with its re-write of history on Bechtel vs. Bolivia.

Take 'Thing They Never Told You #3': "The World Bank decided not to collect the debt that it had with Bolivia." This makes it sound like Bank officials just woke up one day with a big smiles on their face and a song in their hearts and out of great generosity suddenly decided to excuse Bolivia from paying back all the money it owed. Not mentioned is the fact that debt cancellation, in Bolivia and elsewhere, came only after a decade of aggressive campaigning by religious communities and others worldwide, who pointed out the heavy burden that the world's poorest were bearing to finance bogus development deals pushed and financed by the Bank. Maybe Bank officials just missed all those protesters outside the doors of their annual meetings.

Or consider ‘Thing They Never Told You #4’: “The World Bank is one of the least expensive sources of financing on the planet.” Whether this is true with regard to the Bank’s interest rates may be a reasonably debated point. But not included in the Bank’s definition of ‘cheap’ is the payment taken in lost democracy. Assistance from the World Bank is never a simple cash transaction, but one full of dictates and conditionalities about how nations should conduct their economic life – such as thou shalt privatize.

Banks making student loans, for example, do not generally dictate your college major. Nor do banks making home loans insist that you should paint your house green and not yellow. The World Bank however does not blanche at such demands and as a result of these conditions over the past decades; the price of World Bank loans in Bolivia has been very high indeed.

A History That Can Not Be Rewritten with Spin

There is certainly one thing that the World Bank got right – its image in Bolivia is miserable. The World Bank played a leading role in decades of so-called 'structural adjustment' policies that wrecked Bolivian industries, traded away natural resources at bargain prices, and left the country deeply in debt for boondoggle projects that often just benefited the small elite that cozied up to the Bank's ideological agenda. In fact, during the time in which Bolivia was supposedly deciding these issues 'democratically', the Bank had dozens of Bolivian public officials on its own consultant payroll, just to make sure the Bank's bidding was done correctly.

I am not, as some others are, a 'World Bank hater'. However, if the Bank's office here thinks that it can remake its image through public relations and spin, it may have another hard Bolivia experience ahead of it. Asked by e-mail about how much in Bank dollars the Bolivia office spent on the booklets, the Bank offered only that they cost 14 cents ($US) a piece to print but would not reveal how many they had printed nor the cost of distributing them. Secrecy, it seems, remains a World Bank reflex. But based on the number of Sunday papers distributed in the three cities (well more than 100,000), the Bank's public relations project was not a cheap enterprise.

The World Bank has a new representative in Bolivia, Oscar Avalle. If fiction is how Mr. Avalle intends to guide his tenure in Bolivia, he won’t be doing Bolivia, the World Bank, or himself any favors. My guess is that he can expect to hear from Bolivian social movement leaders about his opening act, and the welcome will not be a warm one.


Note: We have sent this Blog post to the World Bank's Bolivia office and invited officials there to respond, as they may wish, in the comments section below.