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Water is Life! Cochabamba, Bolivia against Privatization

October 3, 2006 by Administrator in Fall 2006

By Don Leonard

Water is life! This was the battle cry for a coalition of labor unions, activists, cocaleros(coca producers), students, professionals, small farmers and community groups that gathered in the city of Cochabamba, Bolivia in January of 2000. They organized to take back control of the water resources that had been sold to a subsidiary of the U.S.-based Bechtel Corporation. In this, the poorest country in South America, where nearly one child in ten will never reach the age of five because of illnesses largely related to this precious resource, water means both life and death.

The Cochabamba water works was privatized in 1999 as part of the Bolivian government’s 15 year-old experiment in neoliberal structural adjustment. Commonly known as the Cochabamba Water War, the ousting of Bechtel subsidiary Aguas del Tunari (AdT) has become a symbol of hope to citizens and activists worldwide who reject the premise of economic opportunity offered by the neoliberal model of globalization. In April of 2000 a diverse coalition of Bolivian and international activists succeeded in winning a decisive battle in the war to derail the orthodox economic policies adopted by Bolivia’s political elites.

Yet six years after the Water War, Cochabamba is still searching for alternatives that will deliver services to the poorest half of the city, which lacks access to a basic sanitation infrastructure. Ultimately, the ability of the movement to deliver on the promise of “Cochabamba’s water for Cochabambinos” has been hindered by the dynamics of globalization that continue to displace Bolivian families to urban areas with finite water resources, as well as by the failure of the social movement to provide alternative approaches to the often mismanaged and always underfinanced public operation of those resources.

Globalization Fallout

For the city of Cochabamba, located in a semi-arid valley at the heart of the Bolivian Andes, the challenge of providing water services increased dramatically during the 1970s and 1980s, as ongoing but relatively slow urban migration from surrounding rural areas increased to dramatic new levels of migration from the altiplano (highlands). A faltering mining industry and successive droughts during this period began eroding the economic base of rural peasants in the altiplano, and between 1976 and 1992 Cochabamba expanded from 184,000 inhabitants to 397,000.

Beginning in 1986, successive waves of liberal economic reforms were implemented by the Bolivian government under an executive order (Supreme Decree 21060) in an effort to curb the hyper-inflation that by August 1985 had reached 23,500 percent. State subsidies of gas and mining were cut overnight and over the course of the next fourteen years, nearly all state-owned enterprises were privatized. Consequent layoffs and liquidation of assets caused unemployment rates to triple and had the immediate effect of displacing thousands of workers and their families. While inflation was brought under control, the resulting increase in urban migration caused annual population growth in Cochabamba to jump from 3.4 percent during the previous period (1976-1992) to over 5.4 percent between 1992 and 2001, causing the population to nearly double.

Expanding basic sanitation services to this growing population has been the job of Julio Rodríguez. He is planning director of the Municipal Service for Potable Water and Sewage (SEMAPA), the municipality-owned company that returned to assume responsibility for providing basic sanitation services to Cochabamba’s sprawling urban area after the expulsion of Aguas del Tunari. Looking out the south window of Rodríguez’s office in the distance, beyond the wealthier residential and commercial centers of the city that enjoy at least intermittent services from the water works, lie the improvised houses of the largely migrant neighborhoods collectively known as the Zona Sur. For the civil engineer, delivering quality sanitation to the 58,000 households and businesses that currently receive municipal water and sewage services is a formidable challenge; extending coverage to the 470,000 and growing population of the Zona Surthat currently lacks access to the municipal water works is a task that borders on science fiction.

Resistance is not Futile

The coalition that come together in January of 2000 to protest the concession of Cochabamba’s water resources to the Bechtel subsidiary Aguas del Tunari was united by a common recognition of the failure of orthodox neoliberal reforms to deliver greater opportunity. Fifteen years after the Bolivian government accepted carte blanche reforms that have come to be known of as the Washington Consensus, 70 percent of the population remained below the poverty line.

In the fall of 1999 the Bolivian government announced the conclusion of closed-door negotiations for the concession contract with AdT and the Water Services Law that made the privatization move possible. AdT took control of Cochabamba water works on November 1, 1999. Local opposition to privatization quickly emerged when rural neighborhoods with locally-built wells and irrigation systems discovered that the law conceded control to AdT of all water resources within the municipality, including private wells and pre-existing irrigation systems.

The protests that developed received little support from Cochabamba residents already connected to the water works, as many still held hope that privatization would lead to better water services at lower costs. Initially it was only activists and the Federation of Factory Workers who took a political position against privatization and expressed solidarity with these neighborhoods. Organizing community meetings to inform citizens about the details of the privatization concessions, union leader Oscar Olivera observed, “We used to own the railways, the airlines, the gas; now they want to lease the rain.”

AdT implemented an overnight rate hike of 35 percent in January of 2000. Due to AdT improvements to the water system that increased the hours of water availability, consumption also increased. AdT also implemented aggressive water billing practices. As a result, many families experienced net increases in their water bills far beyond the 35 percent target. For families hovering at the edge of poverty and for middle-classCochabambinos alike, these rate increases triggered a wave of anger that forged a unique solidarity between the activists, students, professionals, small farmers and community groups of all economic strata. During this time, Oscar Olivera of the factory workers union joined forces with Evo Morales of the cocalero syndicate, Felipe Quispe of the peasant trade union confederation (CTUSB) and various grassroots organizations to consolidate the Coalition for the Defense of Water and Life, or Coordinadora.

By April of 2000 the oordinadora had mobilized over 100,000 citizens drawn from the wealthiest to the most impoverished neighborhoods to fight what had become an often violent battle against unresponsive local, state and national governments and their top-down imposition of privatization. After months of protest, intermittent sieges and much spilt blood, the government conceded. On 10 April 2000, AdT was informed by the Bolivian government that its contract was being cancelled. A movement that began with no real expectation of victory succeeded in returning the Cochabamba water works to public ownership.

The success of the Coordinadora contains several lessons concerning how public interests can be organized to achieve their objectives. The Bolivian vice president Alvaro García Linera has likened the coalition of social forces mobilized by the Coordinadora to a modern-day example of sociologist Charles Tilly’s classification of power transitions from local to national levels that occurred in eighteenth century Europe. On the one hand, traditional Bolivian social groupings, such as associations of irrigators and worker unions, were indeed “reacting” to impositions by modern, national powers. But at the same time the Coordinadora “proactively” assembled a new coalition of civil society, one that forged a powerful popular consciousness concerning the ownership of water that achieved, as García remarked, “recognition for its forms of assembly-style democracy as a technique of directing civil demands and institutionalizing other forms of exercising democratic rights.” The Coordinadora leadership, though groomed in the union tradition of clear divisions between members and non-members, adapted to the individualistic ordering of modern urban society to create a new, horizontally organized coalition that for a time proved cohesive enough to unite the most diverse cross section of social actors in the history of Bolivian social movements.

Despite the success of the Coordinadora in orchestrating a social movement to return management of Cochabamba’s water resources to public control, six years later half of the city still lacks access to basic sanitation services. Coordinadora member Marcela Olivera observes that while it was fine to criticize the commodification of water, the movement failed to create new alternatives. To her, the challenge to organizers remains: “What do we do after we put down the stones?”

Cochabamba Water Six Years Later

According to planning scholar John Friedmann, the practice of planning involves both technical and political aspects. For the organizers who coordinated the Cochabamba Water War, planning assumes profoundly political dimensions. The social movements they separately assembled in the form of Oscar Olivera’s Coordinadora and Evo Morales’ socialist/indigenous MAS political party quickly moved beyond the question of water. They viewed their accumulated political capital as an opportunity to confront the Bolivian political elites who suffered from a democratic deficit by failing to understand the relationship between the logic of macroeconomic shock therapy and the traumatic consequences these reforms had on the Bolivian people. For these movements, the de-privatization of Cochabamba’s water represents one battle in a war that now extends beyond water to gas, land reform and the call for a constitutional convention to roll back two decades of neoliberalism.

In the eyes of SEMAPA’s Julio Rodríguez, however, the practice of planning is strictly business. His job is to draw up the technical plans and find the financing to turn the noble ambitions of the water war into a reality. The difference between success and failure in Rodriquez’s planning world is measured in liters per second, kilometers of pipe, leakage and contamination indicators and a spectrum of ratios that tell him (and the international financial institutions on which future projects depend) whether SEMAPA is getting it right or not.

For the Ríos family, which lives in the migrant community of Ch’aqui Mayu in the heart of the Zona Sur, getting it right is measured by a more basic indicator—the portion of its three dollar daily income that must be spent on filling the barrel of water needed each day. While comparable families that live within the SEMAPA service area pay approximately four dollars per month to receive water, the Ríos family pays about twelve dollars per month to the tanquero water trucks that provide a lifeline to communities like Ch’aqui Mayu. The Ríos family doesn’t know what the term structural adjustment means, but it was families like these that took to the streets in 2000 to fight for access to safe, affordable water and sewage services. They joined a social movement to end the privatization of Cochabamba’s water resources based on the belief that publicly-owned water works would give poor communities greater social control and deliver the basic sanitation services they so desperately needed. More than six years later, they are still waiting.

Technical and Financial Problems

The water company inherited by the reformed SEMAPA in 2000 was riddled with both technical and financial problems. First, the grid of pipes that connect central and northern Cochabamba is over twenty-five years old. Replacing the 400 kilometers of failing pipes that provide water and sewage services to the existing grid would cost approximately $48 million. Second, the existing grid was designed to service central and northern Cochabamba. Piping water into the Zona Sur would require the construction of five expensive pump stations to move the water uphill to a network of tanks that would then disperse water throughout the south of the city. Additionally, the urban area under SEMAPA’s jurisdiction increased by 40 percent in August of 2004 as boundary lines were redrawn to reflect the increasing urban sprawl to the south of the city. The total cost of completing an Inter-American Development Bank (IDB)-funded expansion that would connect 120,000 residents (approximately 25 percent of the Zona Sur) to the water grid comes to $24 million. Finally, when SEMAPA was reformed in 2000 it assumed $30 million in accumulated debt from the previous public administration of the water works, a debt it is required to service. The financial implications of these technical issues are formidable, and in the absence of national government subsidies or foreign direct investment, SEMAPA is truly at the mercy of the international financial institutions (IFIs) and their conditional loans.

In order to fulfill the conditions of the IFIs, SEMAPA must demonstrate that it has income to sustain itself. SEMAPA finds itself in a difficult situation, whereby the funds to improve services require either expanding the service area to increase the number of users, a strategy that requires initial capital that the water works cannot raise without the assistance of IFIs, or increasing rates, a politically sensitive issue. Between April of 2000 and October of 2005, political constraints prevented the company from raising rates. This has had the practical impact of hindering SEMAPA’s ability to meet the conditions for Phase I of the IDB expansion project, which were due in August 2005 and as of July 2006 were still unmet. Since October 2005 SEMAPA has gradually raised rates 12.5 percent in an effort to improve its bottom line. The revenues, however, are just beginning to arrive. Meanwhile the Ríos family and the Zona Sur wait.

Contributing to the already formidable obstacles of infrastructure and finance facing Rodriquez’s Department of Planning, SEMAPA’s organizational structure has been unable to escape its reputation for highly politicized and unresponsive decision-making that is so typical of state bureaucracies in South America. Previous to the AdT privatization move, the SEMAPA board of directors had no provision for social control beyond the symbolic representation offered by the participation of the mayor. The goal of the social movement following the Water War was to create social spaces for a more democratic administration of the water works.

While the negotiations between the government and the Coordinadora following the cancellation of the AdT contract resulted in the creation of three elected “citizen director” positions to the SEMAPA water board (out of a total of seven directors), these changes did not reflect the kind of horizontal, open and responsive social control that activists sought. With only one representative for each of Cochabamba’s three major zones (North, Center and South), each citizen director represents approximately 20,000 users. There are several problems with this arrangement. First, citizen directors do not receive a salary. The positions have attracted more aspiring politicians than qualified representatives. Second, the excessively vertical distribution of power means that citizen directors have not proved capable of representing the full spectrum of civic groups, especially the water committees, which hold a stake in the management of SEMAPA. Finally, the communities that lie within SEMAPA’s nominal service area but lack service have no voice on the board.

In addition to organizational weaknesses, the board of directors also suffers from a deficit of technical input. Nominally the engineers of SEMAPA are represented by a director appointed through the Federation of Professionals. In practice, however, there is a near-total disconnect between the water engineers and the Federation representative. The current representative is an architect, and anecdotal evidence suggests that her secondary role as a political advisor to the state governor influenced her appointment as a director. While the general manager appointed by the board to direct day-to-day operations of the company could be the focal point of consensus among the engineers of SEMAPA, in practice previous managers have proved unwilling to press controversial issues that run counter to the political current of the board.

The net effect of these organizational deficiencies is a politically charged environment at SEMAPA whereby neither the input of company engineers nor the petitions of citizen stakeholders are involved to any major degree in the decision-making processes of the board of directors. For Rodríguez, the practical impact of the political maneuverings of the board is a less efficient company for him to sell to international donors. For the general public, perceptions that the publicly-owned company is less than transparent translates to voter participation for water board elections that hover in the single digits.

As it exists today, the nominal social control over Cochabamba’s water resources won by the Coordinadora has not reflected the principles of horizontal, assembly-style consensus-building it demonstrated during the conflict. The speed by which theCoordinadora shifted its focus after the expulsion of Bechtel to new fights such as gas nationalization, airline labor issues and constitutional reform has meant that the social capital that once focused a movement and carried it to victory has since dissipated. In the meantime, SEMAPA continues to win small battles as coverage is expanded incrementally and improvements to services are realized through the technical and financial help of a network of international organizations that continue to search for avenues to support the struggling public water works.

The families of the Zona Sur also continue to work towards a future with safe and affordable water, enjoying the counsel of one organizer who has not lost his focus on water in the years following the rejection of the Bechtel model. Rosalio Tinta, the son of an altiplano miner who brought his family to the Zona Sur in 1986 after losing his livelihood to the shock reforms of the Washington Consensus, works as organizer and technical advisor for the Association of Water Committees of the Zona Sur. Inspired by the ability of these communities to organize on the grassroots level to find locally appropriate solutions for their shared need for basic sanitation, he sees the debate not as one of privatization versus municipal management—where one vertical structure of unresponsive, hierarchical decision-making is traded for another. He looks to a future, rather, where municipal water systems are owned by the communities and managed through the horizontal democratic processes he learned from the Coordinadora as an activist during the Water War. For Rosalio Tinta, the key to delivering basic sanitation services to the developing world is to produce a direct conversation between the two most important actors in the real water war: citizens like members of the Ríos family who organize to define their vision for the distribution of water, and planners like SEMAPA’s Julio Rodríguez who are charged with turning that vision into reality.

Don Leonard is a returned U.S. Peace Corps volunteer who served in the Department of Cochabamba from 2004-2006. He received a master’s degree from the Department of Regional Economic and Social Development at the University of Massachusetts Lowell in 2003.

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