From the Shores of Lake Titicaca

Lake Titicaca -- Bolivia´s gem of a lake, a horizon of clear blue some 13,000 feet high in the Andes. Why does a landlocked nation have a navy? This is it.

I am here with my family on a break for the holidays. The miracle of this place is a reminder that Bolivia is far more than the political struggles that occupy so much of my writing about this land. This country that provokes for most people thoughts mainly of llamas and women in bowler hats is a place of amazing geographic beauty and extraordinary culture.

Tommorrow we will hike the Island of the Sun, terraced with farms that go back before Columbus, the place where the Incas believe the Sun God was born.

I hope that all our readers are having a similar break at this moment before the new year.

Saludos de Lago Titicaca.

The Spanish Water Giant Writes Back

After more than three hundred Democracy Center readers e-mailed the Abengoa Corporation in Spain last week, demanding that the company join Bechtel in dropping its legal action against the people of Bolivia, the company has responded. Below is the letter from Abengoa’s chief lawyer (spelling errors and all).

The letter is stunning both for its ignorance and its arrogance. The corporation apparently doesn’t have a clue about what actually happened in Cochabamba, or even when (they think that the water revolt happened in 1999 when it actually happened in 2000). Bizarrely, they seem to think that the people writing from all over the world are ex-Bechtel employees. Abengoa is also threatening legal action against us if we continue to pressure them.

It is always amazing to me when big corporations are so stupid. The fact is that it is Abengoa and only Abengoa that is holding up an end to the case, according to the Bolivian government. I am preparing a response, which we’ll send by registered letter directly to the company’s chairmen and will post on our Web site. I am sure that the company’s top leaders will be interested to know how incompetently they are being represented by their lawyers.

Keep up the pressure on Abengoa!

LETTER FROM THE ABENGOA CORPORATION

Dear Sir,

We refer to your email of December 16 and wish to inform you that we disagree entirely with the content thereof, given that it is obvious that you are unaware of, and twist the reality of the events.

Therefore, we inform you that the Water Ssupply and Treatment Concession Contract for the city of Cochabamba and the participation of Misicuni in the project was awarded by the Bolivian Government in September 1999 to a company called Aguas del Tunari, in which Abengoa indirectly holds a 25% share, with the majority shareholder, with 55%, being Bechtel and the remaining shareholders being Bolivian companies.

As a consequence of the events that took place in Cochabamba late in 1999, the Bolivian Government unilaterally decided to expropriate the concession it had awarded to Aguas del Tunari and the signed contracts, and this caused a great damaged both Aguas del Tunari and its shareholders, and the determination thereof is foreseen in the aforementioned contracts.

Immediately after the expropriation, Aguas del Tunari made several attempts to reach an agreement with the Bolivian Government, and, upon none being reached, Aguas del Tunari presented the opportune claim at the time. Furthermore, at the present time, negotiations are still being held with the Bolivian Government to try to reach a friendly agreement.

As can be seen from the above, it is Aguas del Tunari, and not Abengoa, who has presented a claim against the Bolivian Government in defense of its legitimate interests, agreed and regulated in the contracts signed in September 1999, as a consequence of the expropriation of the concession and other contracts signed solely and exclusively of the Bolivian Government’s volition.

Finally, we would suggest that you refrain from conducting activities that might in any way prejudice this Company, to avoid us having to take any possible actions we might deem necessary.

Yours sincerely,

Miguel Ángel Jiménez-Velasco Mazarío
Legal Counsel

Saturated with Water -- Happy Holidays!

It seems like I have been writing about the water issue non-stop for the last week. I think I have said about all I have to say for now. In fact, it is time to stop working altogether for a bit and so tomorrow I leave early with my family (dogs included!) for a few days in the wonderful rural village of Aramasi. For anyone interested, here is a slide show on our site that includes some photos from there. Click here.

A last note on water, for those of you whose interest runs especially deep (pardon the pun). I recently wrote a chapter on “The Right to Water” for a book on human rights in Latin America. It is a pretty good reference source if you need that kind of thing. Here’s the chapter.

Most importantly, have great holidays whichever ones you celebrate this time of year, and there are plenty to choose from!

Jim Shultz

Another Water Revolt Begins in Bolivia

Just as the Cochabamba water revolt seems to be entering its final act – the collapse of the $25 million legal case against Bolivia by Bechtel and its co-investors – another water revolt is set to erupt 200 miles north of here in El Alto, the poor neighbor of Bolivia’s capital, La Paz.

As in Cochabamba, the public water system of El Alto was privatized in 1997 when the World Bank made privatization of water a condition of a loan to the Bolivian government. Now the water system is operated by the French water giant, Suez, and a set of minority shareholders that includes, among others, an arm of the World Bank.

According to community groups in El Alto the company has raised water prices by 35% since it took over and poor families who want to connect to the water system are expected to pay more than $445 – an amount greater than six months of the national minimum wage. More seriously, the company has allegedly left more than 200,000 people with no possibility of access to water at all by failing to expand service to El Alto’s growing outskirts.

Here is the link to my complete article syndicated across the US today by Pacific News Service. I offered the water company an opportunity to respond if they did so by my deadline of mid-day Friday. Unfortunately that response came four hours after my article was filed. In the next few days I’ll be sending out an updated article, including the water company’s response, via our Democracy Center newsletter. If you aren’t already receiving it and wish to, send us a note to this e-mail: info@democracyctr.org.

Meanwhile, the public pressure aimed at Abengoa of Spain to join Bechtel in abandoning the Cochabamba case continues to be extraordinary. Judging by the copies I am receiving, Abengoa has already received well over 200 e-mails from all over the world. Keep those coming (see my blog below from yesterday).

Taking on the Scrooges of Seville -- Abengoa

This morning The Democracy Center launched a new global campaign to pressure the last corporate holdout to drop the Bechtel case against the people of Cochabamba, a demand for $25 million from Bolivia’s poor. The good news is that, according to the Bolivian government (in an interview I carried out last week), Bechtel is now ready to drop the case, for a token payment of what amounts to thirty cents! This is clearly the result of all of the public pressure people around the world have put on Bechtel and it would be a huge victory for Bolivians and the people who have helped fight on their behalf.

Now we turn our attention to Bechtel’s investment partner, another corporate giant, Abengoa of Spain. Abengoa, based in Seville, has refused to follow Bechtel’s lead to abandon the case. This morning I sent out a request to our readers worldwide to begin e-mailing the company’s chief executives and demand that they drop their case – currently pending before a secretive World Bank trade court. In less than twelve hours more than a hundred people have already written to them!

If you haven’t written yet and would like to, here’s how:

1) Highlight and copy the text below:

Felipe Benjumea Llorente
Javier Benjumea Llorente
Chairmen, The Abengoa Corporation

Along with thousands of others across the world I believe that it is unjustified and unconscionable that you and Abengoa continue to demand $25 million from the people of Bolivia, some of the poorest families on earth. Your water company in Bolivia has already done enormous damage to the Bolivian people, including the death of a 17 year old boy. If you and Abengoa have any sense of decency and morality you will drop your World Bank case against Bolivia and do so immediately. I look forward to hearing your response.

2) Please add your name at the bottom and feel free to add to or edit the note anyway you like. Then send it to these addresses below (a copy will come to us at The Democracy Center).

abengoa@abengoa.com;info@democracyctr.org

We’ll keep everyone up to date on this through both our email newsletter and here on the Blog. For the full story on the case and the Bolivian water revolt click here.

Oil and Gas -- Following the Money

I want to let our readers know about a new report that I wrote, just published by the Soros Foundation and the Open Society Institute. It’s about the tricky politics of countries being wealthy in oil and gas and still ending up poor.

Anyone following current events in Bolivia knows that one of the most important issues here is the debate over how to develop the country’s huge reserves of natural gas. If the global economy is a poker game in which rich countries always end up with the winning hands, Bolivia’s gas is the only chance at three aces it may ever have.

In October of last year the people of Bolivia ousted the President over a proposed gas export deal to California that they didn’t believe would actually deliver any of the benefits past the rich and powerful. At the time the New York Times called the people of Bolivia “economically ignorant”. But Bolivians, looking at their own long history of being ripped off by foreign corporations, knew exactly what they were doing.

Here’s the article we published a few months ago on this story, The Curse of Wealth Under the Ground.

Here is the link to my new report, published this month by the good people at the Soros Foundation, which looks at how poor countries all over the world are dealing with the same issue as Bolivia – how do you make sure that wealth under the ground becomes money in the pockets of average citizens. It is called Following the Money and is currently featured on the Soros Foundation home page.

Once again the story of Bolivia is the story of poor nations all over the globe.

Bechtel Set to Fold and a New Water Revolt Set to Begin

For readers who have followed The Democracy Center’s work on the Bolivian water revolt, two very important updates!

I am just back from a two day trip to La Paz. I met with the Bolivian Vice-Minister who has been handling the government’s negotiations with Bechtel, who you will recall was the mega-corporation behind the water takeover here in Cochabamba. The Vice-Minister verified that our international pressure campaign against Bechtel has worked and that the company is ready to drop its $25 million legal case against Bolivia - for a token sum of two Bolivianos, about 30 cents. The hold out is one of Bechtel’s smaller investment partners in the failed Bolivian water privatization, Bengoa of Spain. Stay tuned as we set to launch a major worldwide effort to bring the same public attention and pressure on Bengoa as we have on Bechtel.

Is Bolivia on the verge of a second public revolt against water privatization? It looks just that way. Citizens in El Alto, the sprawling, poor city above the capital of La Paz, are readying a mobilization to kick out a local water company controlled by the French water giant, Suez. The company has refused to extend service to nearly 200,000 residents of El Alto, and reportedly gives poor service at increasing prices to the families who are hooked up. Citizens have given the government until December 20th to announce the return of the water to public hands, threatening a direct takeover of El Alto’s water facilities. Negotiations between the government and the company continue.

We’ll be publishing a major article on both these events through our email newsletter later this week. If you don’t already receive that newsletter and would like to, write to us at info@democracyctr.org.

Something New - Blog From Bolivia

Dear Readers:

Welcome to something new from The Democracy Center, the "Blog from Bolivia".

In these postings I hope we can share a little more insight into what is happening in this country in the Andes and in doing so bring forward the insight that Bolivia's experience can shed on the world as a whole. So let your friends know that the Blog from Bolivia is here and never hesitate to offer suggestions for topics and feedback on what we write.

All best wishes,

Jim Shultz
The Democracy Center