The Santa Cruz Uprisings – An Analysis

Bolivia has been in the international press all week because of the continuing marches and protests in Santa Cruz demanding “autonomy”. Our readers as well as the foreign press have been asking the same two questions all week. Is Santa Cruz really going to try to become its own country? Is the government of President Carlos Mesa on the verge of falling?

Here’s some thoughts, based on a flurry of conversations the past few days with Bolivians well connected to the country’s various social movements.

First, Santa Cruz is not going to split off from Bolivia. Even one of the mobilizers’ key allies in the department of Tarija called that idea whacko in the local press this week. What does “autonomy” mean in this case.

Much ado is being served up about the fact that President Mesa has announced that he will support a reform allowing each of Bolivia’s departments (essentially the same as states in the US) to directly elect their governors (called prefectos here). Right now those governors are appointed by the President. There is no legislative branch at the state level.

Is this a big change and concession? Yes. Is it a bad policy move? Actually, no. There is nothing wring with making these powerful departmental governments more directly accountable to the people. It might be much better.

I also think that this may end up being example #1 of the unintended consequences of the conservative-based moves for autonomy in Santa Cruz. To be clear, the demand for autonomy in Santa Cruz has come from the right, not the left, sparked by business leaders and others hot to cut a gas export deal and angry at the indigenous movements on the Altiplano who have been blocking it. However, there is a really good chance that the winners of many of these new governor elections (scheduled tentatively for June) could be from MAS, the socialist party. If Evo Morales runs for governor of the state of Cochabamba, I bet he wins. The socialists could even win in Santa Cruz itself.

The real issue with autonomy isn’t going to be whether the departments elect their governments. The real issue is who will control locally collected taxes, especially those for oil production, and how they will get spent. It is there, my friends, that on the issue of autonomy the rubber hits the road. Stay tuned for that.

No on to the other question, is President Mesa about to fall. Don’t buy it. To be sure, a lot of analysts here believe that the Santa Cruz rebellion had the toppling of Mesa in mind. His Constitutional successor is a man named Vaca Diez (cow # 10 in English) from Santa Cruz, who has already been publicly calling on Mesa to “start governing”, code for stop negotiating with the indigenous and the poor and start sending out the troops as President Gonzalo Sànchez de Lozada did before.

When the movements in Santa Cruz, at the start of the month, were about protesting Mesa’s gas price hike, they were allied with the left mobilized in La Paz and Cochabamba. Then it looked like Mesa could be in trouble. After Mesa partially rolled back the increase and agreed to cancel water privatization in El Alto, the left-leaning protests basically ended but Santa Cruz changed issues to autonomy. People in the rest of Bolivia know that that is code for, “We want to control the gas deal and the money from it.” Within days Mesa had declarations of support from they mayors of all of the country’s major cities, except Santa Cruz, and the socialists were essentially backing him as well. Backfire against Santa Cruz #2.

I have had reporters contacting me, commenting on the coverage of other foreign reporters, saying that some are over blowing the tenuousness of Mesa’s position. I agree. Street protests in Bolivia are just the way politics is done here. They are no more a sign that the government is about to fall than big John Kerry rallies were a sign that Bush was on the verge of being defeated.

Beware of exit polls, be they US or Bolivian.

Dick Cheney – US Fashion Prince

Let’s be clear up front. I am not, by any stretch of the imagination, a clothes guy. Here in Bolivia my daily wardrobe selection is pretty simple. Which pair of jeans is clean, which blue shirt is visibly the least in need of ironing, and which of my two pair of sneakers do I want to wear?

The Vice-President of the United States, however, well that must be a good deal more complex. This morning my wife Lynn (who bails me out of badly matched clothing choices on those rare occasions when I have to venture out into the world of suits) brought my attention to a little article in today’s Washington Post about Dick Cheney’s odd selection of wardrobe for yesterday’s somber ceremony marking the 60th anniversary of the liberation of Auschwitz. Here are some snippets:

“The vice president, however, was dressed in the kind of attire one typically wears to operate a snow blower. Cheney stood out in a sea of black-coated world leaders because he was wearing an olive drab parka with a fur-trimmed hood. It is embroidered with his name. It reminded one of the way in which children's clothes are inscribed with their names before they are sent away to camp. Like other attendees, the vice president was wearing a hat. But it was not a fedora or a Stetson or a fur hat or any kind of hat that one might wear to a memorial service as the representative of one's country. Instead, it was a knit ski cap, embroidered with the words "Staff 2001." It was the kind of hat a conventioneer might find in a goodie bag.”

But really, what you want to see is the photo. Really, take a look. You can find the article and the photo here.

Dick Cheney has a wife named Lynn also, but I guess that she either likes to let him go out looking like a goof or knows better than to make any suggestions to him of any sort (I bet it is the latter). I guess the guy figured:

“I am the Vice President (actually, the President, sort of) of the most powerful country on Earth. I have been reelected and I am never running for office again. If these stupid Europeans (who generally tick me off anyway) are so lame as to plant their countries where it is butt-freezing cold in January, that is their problem. I am at least going to dress to be comfortable.”

So it goes with US image building around the world.

Nervous About Traveling to Bolivia? Come on Down!!

I got a note from one of our new readers this morning, a college instructor in Norway. He wrote about how much he and his family loved Bolivia when they traveled here a few years ago and that they were thinking of coming back. Yet they are nervous to come back because of the ongoing news of Bolivian political unrest.

A message to anyone reading who is thinking of coming our way but nervous to do so – Come on down!! I have NEVER, in more than seven years of living here met ANYONE who was disappointed that they came. I have met dozens upon dozens of people, from the US, Europe, Canada and elsewhere, who found their lives changed in deep ways for having come here.

I am reminded of the feeling that I had a few years back when I attended the ceremony in San Francisco where Oscar Olivera was awarded the Goldman Prize for his work on the Cochabamba water revolt. The Goldman Fund made a video to show that night, one full of violent images of Bolivia. True, what was in those images really happened, but they did not create a true impression of what it is really like to be here. I felt some personal guilt over this, as someone who played a big role in bringing the water revolt story to the world. My response was a slide show which I published on our Web site on my return – Cochabamba, the Place Where I Live.

Even when there is some sort of political turmoil here, as there almost always is somewhere, you have to pretty much deliberately put yourself in the middle of it to end up in the middle of it. More likely you’ll only know its happening from the newspapers, or at least end up learning something from it.

Also, always be a little wary of the travel warnings from the US State Department. The folks there seem like they are paid sometimes to overreact. A couple of years ago during a bout of Bolivian rebellion the US designated the soccer field of my kids’ school as the “official” evacuation point for US families should it become necessary. Supposedly we would be helicoptered out and then flown to the US (for free I think!). The US citizens that I know here thought it was all pretty funny. No one even imagined leaving.

Citizens of other countries were given evacuation priority according to, it seemed, whether or not their nation was supporting the US war in Iraq. Brits came second and I think Canadians were last. I vowed that I would never leave without our two dogs, Simone and Little Bear (mother and daughter, by the way). I joked to my Canadian friends that our dogs would get helicoptered out before they did.

In any event, if you are thinking of coming to Bolivia for a visit, do not give it a second thought. Just come! But do remember, in the event that something really unexpected happens, my dogs leave first.

Lies, Damn Lies, and Those Told by Bechtel and the World Bank

I guess I am not stunned anymore by the willingness of people in high public places to lie. The present administration in Washington has nearly made it a habit. However, I do truly remain stunned by the eagerness with which some people in high places are willing to lie on matters of basic fact, when those facts are so clearly documented by their own institutions.

Today I bring you two examples: The World Bank and the Bechtel Corporation.

This week a flurry of reporters has been in touch, writing stories about this month’s revolt against water privatization in El Alto. Reporters in contact with the World Bank and Bechtel continue to be told by their respective PR people the same goofy lies they have been telling for nearly five years:

LIE #1: The World Bank DID NOT coerce Bolivia into privatizing the public water systems of Cochabamba and El Alto/La Paz.

The Bank has been saying this for years, and has attacked me in print and over the phone for claiming that the Bank did indeed coerce the Bolivian water privatizations. If only the World Bank would read it own reports. Doubters should check out this Spring 2002 report from the World Bank, posted on the World Bank’s Web site. In it the Bank says quite clearly:

“These problems [with advancing water privatization voluntarily] were only addressed when the President of Bolivia decided to privatize the La Paz and Cochabamba water and sewage utilities, a Bank condition for the two-year extension of the [World Bank water development] loan to 1997.”

Note to the World Bank PR office: Do you really think that lying to reporters enhances your credibility with the media?

LIE #2: Bechtel’s water subsidiary, which ran its Cochabamba corporation, NEVER changed its corporate registration from the Cayman Islands to Holland [the maneuver that Bechtel pulled to set up its legal action against Bolivia before a World Bank trade court].

A reporter contacted me with this whopper yesterday, and asked if I could substantiate our claim in the face of Bechtel’s denial. Here again, the evidence can be found right on Bechtel’s own Web site with this corporate news release. It reads [on page five]:

“As an arbitrative body affiliated with the World Bank, ICSID has jurisdiction over this dispute by virtue of a bilateral investment treaty between Bolivia and the Netherlands, where Aguas del Tunari’s majority shareholder, International Water, has been registered since 1999. (When Edison S.p.A. of Italy bought 50 percent of International Water in 1999, registration moved from the Cayman Islands to the Netherlands because Edison required a change of domicile.) The treaty names ICSID the arbiter of record."

Note to Bechtel’s PR Office: Is there any way possible that I could invoice you for the hours I have had to spend responding to the documentable lies you have told about your Bolivian misadventures? I have two kids headed for college in the next few years and I could really use the money.

Lies, damn lies and the truth-less spin of the World Bank and Bechtel. Tell your friends.

The Art of Visiting But Not Seeing

I see it all the time, reporters, business people and others come to Bolivia for a week or so, become convinced they know what there is to know, and return home to the US to get it all wrong. This week Senator Bill Nelson of Florida joined that crowd. Following a brief Congressional visit to South America, the Senator outlined his prescription for an ailing continent in a Miami Herald opinion article: "South America Beset by `Crisis After Crisis'.” A note, you might have to enter some information and get a free subscription to read the article.

Here’s my letter to the editor in response:

Letters to the Editor
The Miami Herald

Dear Editor,

While it is a good thing that Florida Senator Bill Nelson has traveled here to South America to get a closer look at events (South America beset by `crisis after crisis', op-ed 1/23), it is important that he get the story right.

The Senator writes, for example, that, “In Bolivia, earlier this month, widespread labor unrest brought commerce to a halt.” In fact, the protests across Bolivia this month had nothing to do with labor issues. Outside the nation’s capital, in the city of El Alto, the protests were by neighborhood groups, aimed at ousting a foreign water corporation that left tens of thousands of families without the possibility of access to safe drinking water. Other protests took aim at a steep hike in gas prices approved by the government.

If we don’t analyze the problem correctly, the prescription isn’t likely to fit either. Senator Nelson prescribes the medicine of free trade agreements, such as the FTAA and bilateral accords. He shouldn’t expect either to go down well with average people here. Accords like the FTAA are designed to give foreign corporations even more access to take over natural resources on the continent, exactly the kind of policies behind much of the turmoil the Senator warns about.

As a U.S. citizen who has lived here for more than six years, what I see is a continent that wants economic growth without ceding control of its destiny to US corporations or the US government. When US leaders see and respect that, then we’ll have a genuine starting point for progress.

Jim Shultz
Executive Director
The Democracy Center
Cochabamba, Bolivia

The (Rich) People’s Republic of Santa Cruz, Bolivia

A number of my readers have asked me what observations I have to share about the ongoing protests in Santa Cruz, Bolivia, where civic groups are demanding “autonomy”. I don’t want to hold myself out as an authority on the situation, but here are some thoughts.

First, do not make the mistake of characterizing the Santa Cruz revolt as a rebellion of the poor. I had to clear that up just last night in a radio interview with a station in California.

This one is being led by business leaders and others who are among the wealthiest people in the nation. It is no coincidence whatsoever that the departments of Santa Cruz and Tarija (which is joining the autonomy protests) also happen to be where Bolivia’s huge reserves of natural gas sit under the ground. If you want to translate autonomy, you might begin with: “We are sitting on the gas, we want to do the negotiations with the foreign oil companies, we want to get as big a share as possible, and we want to take control of it.”

The call for autonomy reminds me of the old story about the socialist farmer. One day he tries explaining socialism to his neighbor, who asks:

“So, let me get this straight, if you have two cows and I don’t have any, you give me two?”

“Exactly!”

“And if you have six chickens and I don’t have any, you give me three?”

“That’s right!”

“And if you have four pigs and I don’t have any, you give me two?”

“Hold on there, I HAVE four pigs.”

When Bolivia’s mineral wealth was the silver and tin in places like Potosi and Oruro Santa Cruz and Tarija were plenty happy to be a part of Bolivia. “But wait, I HAVE fifteen trillion cubic feet of natural gas!”

The West Wing, Bolivia, the CIA, and my Parking Space Hero

I just received an email today from a friend of mine in California about an episode of the TV show The West Wing. Since we don’t own a television set I don’t exactly watch the show regularly, but as a political junkie, I catch it when I can while traveling to the US. I’d vote for Martin Sheen any day, ever since the afternoon in Santa Monica a good twenty years ago when he gave me his parking space. You just know George Bush is not the kind of guy who would give away his parking space without charging for it.

Back to The West Wing. According to my friend, they just did an episode in which, “The White House crisis is about U.S. involvement in Bolivia -- CIA operatives posing as engineers are held by the people which creates a crisis for the President.” Way to go West Wing! Imagine, tossing a little questioning of the US presence here into the Hollywood mix.

But then the show did something unbelievably goofy. If you go to the program’s Web site, to the section called Hot Topics, where they have links to where viewers can get more information on the topics in the show (here it is), the information source they link to for more information on Bolivia is…The CIA!! Really, you have to check this out.

So I have just written to the producers of the show and suggested that as an alternative, or at least a slight offset to the CIA, they might add a link to the country profile on Bolivia that I has published last year in the fine British monthly, The New Internationalist. You can view that article here.

I know that if my good old parking space buddy, the alternative Commander-in Chief, Martin Sheen, knew about this he would not be happy. So if you’d like to add your voice to mine on this, send along a note of your own to the fine people at The West Wing. The email address is:

TheWestWing@nbc.com

I’ll keep you posted.

Water Privatization – Getting Beyond the Slogans

With the public uprising last week in El Alto, which resulted in the Bolivian government canceling, once again, the water contract of a major foreign corporation, the issue of water privatization is once again in the news. There has been some, but not much, media attention outside of Bolivia about these events.

Even when there is media attention, limits of space and interest rarely allow coverage to get beyond the superficiality of competing slogans. “Privatization good!” “Privatization bad!” The issue, however, is far more complicated than that and deserves to be analyzed with more care and more substance.

For that reason I am grateful to the on-line business publication, Business News Americas, and one of its reporters, Randy Woods, for publishing a lengthy interview with me this past week on the issue of privatization. Here’s the link. I hope our readers will take a look.

To be sure, for many on both sides of the issue, water privatization is an ideological battle. But behind that are important public policy questions about how to provide the poor of the world safe water, given the fact that the poor of the world can’t afford to pay the actual cost of doing that. So if you are interested in getting beyond the slogans to some substance on the issue, take a moment to read the interview.

In Defense of SpongeBob SquarePants

Today, as the attention of my home country turns to the second inaugural of George W. Bush as President, I am thinking about another distinguished American, Mr. SpongeBob SquarePants, now officially a political target of the Christian Right.

No, I am not making this up. You see, some high profile Christian leaders in the US have accused Mr. SpongeBob of being gay. Here’s the link to today’s article in the NY Times. Granted his head is oddly square, his smile oddly large, his arms and legs ridiculously scrawny for his body. But he is, after all, a cartoon character. Perhaps these are secretly homosexual traits in a sponge. Could be – I never studied the literature on gay sponges that closely.

I have a two-year-old daughter and even though we do not own a television set (more on that battle another day) SpongeBob is one of the few cartoon characters she recognizes immediately. As I type this, I have on the desk beside me a SpongeBob SquarePants. It’s a Bolivian model, quite cool really – handmade, cost a dollar, and if you press his necktie (Hey, do gay guys wear neckties?) it ignites a rousing rendition of the theme from the Titanic. This was my reason for buying it actually, a “two-fer” that appealed to both my daughters, the one that’s two and the one that’s eighteen.

To paraphrase Richard Nixon (who famously said this a half century ago about an illicitly received puppy named Checkers), “I don’t care what they say, I am not giving back my SpongeBob SquarePants.

So, on this day of George Bush the younger seizing another for years at the national reins, there is hope. Never, ever underestimate the capacity of some people to become so convinced of their own righteousness that they just get, well, sort of looney. In the meantime let’s all rally to the defense of the little yellow sponge with brown pants and prepare to watch the political show as those who fear him just start looking sillier and sillier.

Que viva el SpongeBob! Que viva!

After Election 2004, What Now? Winners of The Democracy Center Essay Contest

On Thursday President George W. Bush's will be sworn in for a second term -- not exactly a source of delight for many of our readers. After last November's election we invited our readers around the world to contribute short essays in response to the question: "Elections 2004, What Should Progressives do Next?" The response we received was terrific. Today we bring you the five winners!

We aimed for a diversity of perspectives and that is what we got -- from a progressive advocacy veteran on how to deal with Bush Supreme Court nominations to an invitation from two young Republican conservatives to look for common ground.

Here's the link to read them all.

BUSH AND THE SUPREME COURT: WHAT'S AT STAKE AND WHAT WE CAN DO
By David Cohen, co-chair and co-founder of the Advocacy Institute in Washington and a veteran battler in judicial confirmation fights.

President Bush should be taken at his word. When he says he wants his appointees to the Supreme Court to think the way Justices Scalia and Thomas do we had better believe him. That is short hand for the President keeping his political promises to economic social Darwinists and religious fundamentalists at the same time.

"RETREAT"ING TOWARDS VICTORY: MOVING AHEAD WITH AN OPEN MIND
By Margaret Carolla, a self-described “Yanki” from Missouri who lives in Buenos Aires, Argentina.

The Sunday following the elections, I had dinner with three of my best yanki friends in Buenos Aires. What we should do was the subject of the conversation. Over some stunning bottles of Malbec, my world-wise friend Erin pitched her idea. President Clinton famously attends what are called “Renaissance Weekends”, where “accomplished individuals and families from a broad range of disciplines, backgrounds and political, economic and religious convictions came to learn from each other.” Why not do the same?
HEALTH SECURITY FOR ALL AMERICANS: A STRAIGHTFORWARD PLAN
By Joan Eisner of Fall Church, Virginia.

Life, liberty, and the pursuit of happiness – impossible to achieve without affordable, quality health care. Our next great moral civil rights battle should be to ensure that every American has the right to health care. Let’s keep it simple. No individual or family should have to spend more than 10% of their taxable income on health care. Once that amount has been spent, they are eligible for advance, refundable Federal tax credits to pay their medical bills.

IF YOU CAN'T BEAT 'EM - MAKING COMMON CAUSE WITH PROGRESSIVE CONSERVATIVES SERVES LIBERAL ENDS BETTER THAN SOUR GRAPES OPPOSITION
By Heather and Benjamin Grizzle, two young, self-described progressive Republicans from Manhattan.

In the aftermath of the GOP’s decisive victory this fall, both conservatives and liberals forget that while the two parties disagree about means, “progressive” ends like greater opportunity for immigrants, minorities, and the poor, a cleaner sustainable environment, and responsibility among the capable, remain a vision for many in both parties. If liberal progressives would thoughtfully understand and make common cause with conservative progressives, a GOP administration could be steered toward its best progressive instincts, rather than cast off to its worst elements.

PROGRESSIVES AND MORAL VALUES: A CATHOLIC ACTIVIST URGES PROGRESSIVES TO KEEP THE FAITH
By Dan Moriarty, Social Justice Minister with, Campus Ministry at Seattle University in Seattle Washington.

Asking voters if we are most concerned about war, poverty, health care, the environment, or moral values was like asking if we are fans of classical, jazz, rock, r&b, folk, country, or good music. From Quaker abolitionists to Vietnamese Buddhist monks, Baptist civil rights leaders to Catholic nuns in Central America, people of faith have so often been the visionary leaders of progressive movements here and abroad.

The US Press, Bolivia, and Riots of the Imagination

Perhaps it is more a result of laziness than intention, but a series of US journalists, writing about Bolivia from afar, keep on making the same, whopping mistake. I saw two more such articles in the US press just today.

They keep saying that Bolivia’s ex-President, Gonzalo Sánchez de Lozada, was kicked out of office in October 2003 as a result of violence on the part of the people. In fact, the violence was on the part of the government, directed at the people.

Here are a few examples:

From Jane Bussey of the Miami Herald, September 27, 2004:

"...violent protests against former President Gonzalo Sánchez de Lozada forced his October 2003 resignation and scuttled proposals to build a gas pipeline through Chile -- Bolivia's long-time archrival."

From William F. Jasper in the current issue of the conservative, The New American:

“Riots in Bolivia caused President Lozada to resign in 2003…”

And from columnist Jackson Diehl in today’s Washington Post:

“In Bolivia, the Chavez-funded Movement Toward Socialism has already driven one democratically elected president from office through violent protests.”

One would think that journalists would feel some responsibility to get the story right; especially if they are reporting on events they never got closer to than, say, a hemisphere away.

If you think bad reporting like this has no effect, take a look at how it became a proclamation by the recent Democratic nominee for President in an article he published in the same Miami Herald:

“In Bolivia, [President] Bush encouraged the election of a pro-market, pro-U.S. president and did nothing to help the country when riots shook the capital and the president was forced to flee.”

Here, in contrast, are the facts.

At least 59 people died in the October 2003 uprising over a proposed gas export deal through Chile to the US. Of those, the vast majority were civilians killed by military and police gunfire, troops sent out under the President’s command. The New York Times reported, at the time, that one of the few soldiers killed was shot by his own superior for refusing to fire on a crowd. Violence on the part of the government grew so extreme that high-level United Nations officials formally called on the President to control his forces. Even the President’s own handpicked Vice President broke with Sanchez de Lozada over the violence. In the end the President was not ousted by violent mobs but by a peaceful demonstrations and a broad nationwide call for his resignation led by prominent human rights officials and leaders in the Catholic Church.

Amnesty International recently published a lengthy and authoritative report on the events of October 2003. Here’s the link.

When I write publicly, whether in this Blog, in our Democracy Center newsletter, or in my newspaper articles in the US, I feel a real duty to get the facts right. I can’t understand why these reporters and others are willing to get the facts so wrong. Bad reporting becomes a false assumption of fact, one powerful enough to sway a Presidential candidate and in turn the foreign policy of the United States.

Suez Water Corporation: Should I Stay or Should I Go Now?

Should I stay or should I go now?
If I go there will be trouble
An’ if I stay it will be double
So come on and let me know.

-- The Clash

The water customers of El Alto have made their demand in the streets. The President of Bolivia has issued a formal decree announcing that the country is taking back control of the water. Suez Corporation, the water giant from France, says it isn’t ready to leave. This is where the water revolt of El Alto stands at the end of the week.

Will Braun, a solid writer from Winnipeg, Canada managed to get this statement out of Suez spokesperson Luan Greenwood:

“Aguas del Illimani has not been informed officially that the water contract has been revoked. Shareholders will use all the legal recourses at their disposal to protect their rights. Ending a contract that is compliant and obtaining indisputable results will not be an easy task for the Bolivian government."

Suez’s comments are reminiscent of those issued by Bechtel/Abengoa in the waning days of the Cochabamba water revolt. There seems little doubt here that the company owned by Suez, the World Bank and others will eventually leave, but look forward to a lawyer’s holiday as the Corporation and the Bolivian Government sort out the complexities of how to compensate the company for lost assets and what happens to the company’s incurred debt.

For those who might desire to weigh in directly with the company on that lead question – Should they stay or should they go now? – Suez’s CEO is Mr. Gérard Mestrallet. His email is:

gerard.mestrallet@suez.com

Bonjour.

Keeping Score in the Bolivian Water Revolts: Consumers 2, World Bank 0

It appears at this writing that the people of El Alto have won Bolivia’s second citizen revolt against turning over water to foreign corporations. This is an important victory and important lesson for institutions around the world watching the politics of “The Washington Consensus”.

The World Bank has its fingerprints on both these water privatizations, in a big way. In 1997 the Bank made the privatization of water in two cities a pre-condition for loaning the Bolivian government funds it badly needed. Those cities were Cochabamba and El Alto-La Paz.

In the aftermath of the Cochabamba water revolt, the World Bank tried mightily to deny that it had coerced the privatizations, but one of the Bank’s own official reports documents it. For the record, here’s the link to see it yourself.

When Cochabamba’s privatization failed, the Bank declared it was a case of bad implementation, not flawed theory. In 2002 the World Bank declared the El Alto-La Paz water privatization “successful”. This week the people of El Alto announced that the Bank got it wrong.

Observers from all sides will try to pin a label on what happened this week in Bolivia – an indigenous uprising, the work of radicals secretly trying to subvert the government, etc. To be sure, there are many Bolivians philosophically opposed to putting the country’s natural resources into the hands of private corporations, and two failed experiences with water privatizations have proven them far more wise than naïve.

I think that at heart these water revolts are democracy in action, old-fashioned consumer rebellions. The facts are these. No one – not the Bolivian government, not the World Bank, and certainly not the multi-national corporations involved – ever asked the Bolivian people, “Hey, do you want to privatize your water?”

These deals were forced on the Bolivian people without their consent and they were both bad contracts from the start. Cochabamba’s water deal with Bechtel/Abengoa allowed huge rate increases and exorbitant profits. The El Alto-La Paz contract left tens of thousands of families without access to water.

The people who own the water, use the water, and were expected to pay the companies involved – they said NO. Milton Friedman said it – Markets work best when there is choice. Deals hammered out behind closed doors tried to deny that choice to Bolivians. They took it back.

To the water officials at the World Bank – a question. How many citizen revolts against handing water into corporate hands do you need before you start re-thinking the theory?

The Latest from the El Alto Water Revolt

I just spoke a few minutes ago with one of the lead organizers of the water revolt in El Alto. This morning, representatives of Bolivia´s President sent the draft of a proclamation by which the President would announce the immediate cancellation of Aguas del Illimani´s contract with the Bolivian government. If the neighborhood groups agree that the proclamation is a sufficient guarantee of the company´s departure to lift the blockades and end the general strike in El Alto, President Carlos Mesa will sign and release the decree formally, perhaps as early as tonight.

Nothing is certain in Bolivia until it actually happens, but it seems very likely that the groups leading the protests will accept the President´s proposal and that corporate water privatization will come to an end in El Alto and La Paz, just as it did five years ago in Cochabamba. However, this water revolt is very unlike the Cochabamba battle against Bechtel-Abengoa in 2000. To the government´s credit, no state of martial has been declared, no one has been arrested, no city has been militarized, no one has been injured or killed.

If water privatization ends in El Alto and La Paz in a peaceful and non-violent way, the victory for Bolivians will be double.

Latest Bolivian Water Revolt Takes Dramatic Turn

The public revolt against water privatization taking place this week in the city of El Alto took a dramatic turn today – the announcement by the Bolivian government that it is canceling the private water contract, and the rejection of that offer by citizen groups. Below is an article I am syndicating to the US and other foreign press. Stay tuned to this Blog for more updates.


As Public Strikes Mount, Bolivian Government Announces It Will End Contract with Foreign Water Company in El Alto

Neighborhood Organizations Reject Offer as Too Ambiguous

Cochabamba, Bolivia – As the city of El Alto finished the second day of a citywide general strike, demanding ouster of the multinational corporation that controls its water, the Bolivian government announced that it has decided to cancel the company’s water contract. Neighborhood organizations, however, rejected the government’s offer Tuesday night, claiming that it included no firm date for the company’s departure and no real guarantee that the company would leave.

El Alto’s public water system was privatized in 1997 after the World Bank made water privatization a condition of a loan to the Bolivian government. The private company, Aguas del Illimani, is owned by a consortium led by the French water giant, Suez, the World Bank, and others. Public protests against the company charge that it has failed to extend water and sewage service to tens of thousands of families in the city’s impoverished outskirts and that hook-up costs exceed more than half a year’s income at the Bolivian minimum wage.

“The Bolivian Government will initiate the termination of the concession contract of Aguas del Illimani in a coordinated way through a legal process,” wrote the Bolivian Minister of Public Services, in a letter to the groups Tuesday. The Minister also requested that community groups in El Alto refrain from any action against employees or facilities of the company that could form the basis of a legal demand against the government by the company.

At a community assembly Tuesday night, neighborhood organizations voted overwhelmingly to reject the government’s offer. “The letter is ambiguous,” said Julian Perez, an advisor to the Federation of El Alto Neighborhoods. “There are no dates set for the company’s departure. What we want is a decree from the President that Aguas del Illimani will leave El Alto immediately.”

The neighborhood organizations leading the general strike announced that they would abide by a twenty-four hour break Wednesday to allow the government to respond to their demand. If the government failed to change its position, they warned, the groups would begin a mass march and an indefinite general strike starting Thursday.

The company could not be reached for comment Tuesday night but previously corporate officials told The Democracy Center that it intended to stay in El Alto, denied that residents there were dissatisfied with water service, and threatened legal action if any of its facilities were taken over by the community groups.

El Alto’s public strike over water privatization is taking place simultaneously with huge, nationwide public protests against the government’s hike in gasoline prices the first of the year. These protests have put Bolivia in its most severe state of political turmoil since massive protests over a proposed gas export deal to the US led to the ouster of former President Gonzalo Sànchez de Lozada in October 2003. In an address Sunday night, the man who succeeded him, President Carlos Mesa, warned that if the current protests turned violent he would resign.

The citywide uprising against water privatization in El Alto also comes exactly five years after the launch of the revolt against water privatization in Bolivia’s third largest city, Cochabamba. The Cochabamba water revolt ended with the ouster of a multinational consortium led by the Bechtel Corporation of San Francisco. Bechtel’s company later filed a $25 million legal action against Bolivia in a closed-door trade court operated by the World Bank. Under heavy international pressure Bechtel has reportedly agreed to drop its action and an end to the case awaits an equivalent concession from one of Bechtel’s co-investors, the Abengoa Corporation of Spain.

A Day of Protests

I don’t know how other cities are affected, but Cochabamba is the scene of a large protest today, part of a nationwide demand to rescind the increases in gas prices approved by the Bolivian government. The government claims that if prices aren’t increased that cheap Bolivian gas will be bought up and will disappear over the border, sold as contraband in neighboring countries where gas is more expensive. While the government’s claim may be legitimate, there are certainly ways to stop illegal trafficking in gas and oil besides raising prices for so many families who can’t afford it. Labor groups, the coca growers union, and many others have joined in the protests nationwide.

A reporter for the Miami Herald contacted me this morning and asked a question that is on the minds of many Bolivia watchers abroad – will these protests topple President Carlos Mesa? Mesa himself assumed the Presidency just over a year ago when his predecessor, Gonzalo Sànchez de Lozada, was ousted by a popular uprising over a gas export plan.

I don’t think that Mesa is going to be ousted from office over this. Mesa's public support is much higher than Goni's was and, despite the conflicts, he has a very strong capacity for dialogue with all the groups protesting. The alternatives also aren't too pretty. No one seems to like the President of the House of Representatives who would succeed Mesa and I don’t think many people, even movement leaders, want the uncertainties that a Mesa departure would trigger.

The groups demanding the end of water privatization in El Alto have made it very clear publicly, and privately to me, that they have no interest in toppling Mesa. Evo Morales and the coca growers also don’t seem anywhere close to that demand. They only major group calling for Mesa to resign are those protesting the gas price increases in Santa Cruz and they are probably doing that just to up the rhetorical ante.

If I end up wrong you’ll see it here first.

Update on the Water Revolt on El Alto

For those of you interested in the ongoing story of the water revolt unfolding in the city of El Alto Bolivia, here is a brief update.

On Monday community groups are set to launch a citywide “paro”, which is essentially a general strike, to press their demand that the Bolivian government cancel its contract with the French-led private water company, Aguas del Illimani. For more background see our original story from a couple of weeks ago. Here’s the link.

The government has already made some modest concessions to El Alto, in an effort to stop the protests. These include a slight reduction in the charges people have to pay to hook up to the water and sewage system, allowing those fees to be paid in installments over ten years, and discontinuing the practice of basing hook-up charges and water rates on the dollar (which translates into an automatic 5% per year increase as the local currency loses value against the dollar). The government also replaced the chief federal official in charge of water and has promised to renegotiate the company’s contract to provide for extension of water service to the tens of thousands of families who do not have it.

That last issue, the failure of the water company to provide service to so many families, remains the real issue and community groups aren’t buying the government’s pledges of making a better contract. They have good reason for their doubts. The company itself, in an interview with The Democracy Center, has said it is under no obligation to extend service to families living in the city’s growing and desperately poor, marginal neighborhoods. The bottom line is that El Alto groups want to return their water to public control, just as the people of Cochabamba did five years ago.

We’ll keep you posted here at the Blog on what happens next week.

A Resource for People Interested in News from Bolivia

Many of the people who visit The Democracy Center’s Web site and who read this Blog are part of a worldwide community interested in what is happening in Bolivia, where we are based. Some of you are Bolivians living abroad. Some of you are foreigners who have lived or visited here. Some are reporters or students doing research. I hear from you often and people seem grateful for a little first hand news from the Andes.

Here is a resource that might be of interest to some of you, Noticias Bolivianas. It is a free, daily summary of the Bolivian news delivered to your email, complete with article summaries and links to stories in eight major daily newspapers. I subscribe to this along with a similar free e-mail news summary available from the NY Times and it is a good way to keep up with the major news in both my countries.

If you are interested, here is the link. Scan the page and look for “Noticias por Email” midway down the left hand column. Just enter your email and you’ll start receiving the news summaries.

Bolivia at a Standstill

Here’s the story in most all of Bolivia today – no public transportation. No microbuses carrying people to work. No big buses carrying people in between cities. A sprinkling of taxis that risk having their tires punctured. In a country where only a small percentage of families own their own car, today’s nationwide transportation strike means that much of life in Bolivia is at a standstill.

The issue is the decision by the Bolivian government to raise oil and gas prices with the new year. In a country where most families are desperately poor and struggle just to afford food, even a minor rise in fuel prices is a big hit for many families. In my neighborhood the buses have just raised their fares by 50% to cover the steady increases in gas prices.

Bolivians are especially angry because, even though the gas is produced cheaply right here, they are still forced to pay prices based on world market prices. Even before the price hike, a gallon of gas in Bolivia sold for about $1.60 per gallon, almost as high as in the US. But here the minimum wage is $66 per month. “We are paying the same for gasoline as if we were buying it from the Persian Gulf,” says Roberto Fernàndez Teràn, an economist at the University of San Simon in Cochabamba.

Once again Bolivia’s wealthy elite seems far more concerned about toeing the global ideological line of markets first and the poor will just have to live with it. The head of the National Chamber of Commerce said here yesterday that subsidizing fuel costs for the poor “is inadmissible in an economy that is open and global like this one.”

With the country shut down for the day, he and the Bolivian government may both need to rethink their positions.

Stories to Watch in 2005

The New Year has come to Bolivia, ushered in as usual with the annual valley-wide firework extravaganza here in Cochabamba. This is not some officially-sponsored show, but the handiwork of hundreds of families all over the city who arm themselves with the unbelievable array of explosives on sale on the street here. The “wildest name” award goes to the massive firecracker known here as a “mata suegra”, or “mother-in-law killer”. Hey, I am just reporting. A slight illness this year kept me from my annual ritual of blowing up an overripe papaya.

As the new year begins, here are some stories to keep you eye on here (and ones we’ll be writing about):

The US Squeezes Bolivia to Exempt it from the International Criminal Court: The US government is threatening to withhold tens of millions of dollars in aid if the Bolivian Congress does not pass a law exempting US soldiers, DEA agents, and others from the global treaty allowing international legal action against people accused of serious human rights crimes.

Water Revolt II: The citizens of El Alto are preparing to follow in the footsteps of Cochabamba and demand the ouster of a private water company that similarly took over the city’s public water after the World Bank demanded privatization.

Fighting the Spanish Water Giant: An international campaign against the Abengoa Corporation of Spain is demanding that the company join Bechtel in agreeing to drop its legal action against the people of Cochabamba, as a result of their local water company’s ouster in 2000.

Rewriting the Bolivian Constitution: In 2005 Bolivia will assemble a nationwide “Constituent Assembly” to rewrite the nation’s constitution, a major demand of indigenous groups and social movements.

Bolivian Children Denied Loving Families: Each year hundreds of abandoned Bolivian children are left to live their lives, needlessly, in Bolivian orphanages, for lack of adoptive parents. Yet there are hundreds of parents in the US who would eagerly adopt them. This year The Democracy Center will launch a campaign to clear away the bilateral bureaucratic obstacles that are keeping these children from having loving parents.

Stay posted to this Blog and to our newsletter for updates on all these stories.