Water privatization case study cochabamba bolivia
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In Bolivia, shifts towards the privatisation of water supply and sewage services caused strong dissatisfaction, resulting in the eruption of social conflict. Because of the severe dissatisfaction, action was taken to cancel the previous agreements and instead launch a forum where government representatives, social organizations, the private sector and municipalities participate to formulate of a new policy. This case illustrates the crucial importance of rooting policies with the public. One month later, the Act No. In addition, rules that aimed to regulate the use and exploitation of water resources were adopted. Both events caused reactions and led to mass mobilization of the population.
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Daza, a seventeen-year-old student, had been shot in the face by the Army during protests sparked by an increase in local water rates. These protests had been growing for months, and unrest had also erupted in other parts of the country. The national government had just declared martial law. In Cochabamba, a city of eight hundred thousand, the third largest in Bolivia, a good part of the population was now in the streets, battling police and soldiers in what people had started calling la guerra del agua —the Water War. Peasants from the nearby countryside manned barricades, sealing off all roads to the city. Some of their leaders had been arrested and taken to a remote prison in the Amazon; others were in hiding.
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Throughout the 90s, Bolivia came under increasing pressure from the World Bank to privatize public goods in order to fulfill loan conditionality. When the auction drew only one bidder, the government signed water resources over in a year concession to Aguas del Tunari, a foreign-led consortium of private investors dominated by the Bechtel Corporation. The company waited until October to announce the concession it had been granted. By then, the Bolivian Parliament had rushed through a new water law —Law —to ensure the legality of the privatization. Many communities met their water needs with autonomous systems, such as cooperative water houses and cisterns.
The World Bank and the International Development Bank highlighted water privatization as a requirement for the Bolivian government in order to retain ongoing state loans. Renouncing the deal was seen as unthinkable to the leaders who felt pressure to keep the trust of international investors, as the economic crisis in Argentina was partly caused by a loss of credibility with international bankers. Many of the poorest neighborhoods were not connected to the network of water systems, and paid even more for lower quality water from trucks and handcarts.
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