Water Privatization and
Scarcity in Bolivia Sydney Arsenault
In Bolivia, the water supply has been running low for decades. Since its privatization, in 1997, the fight to control this important resource has begun. Bolivianos have taken to the streets in the form of rioting and protesting to demand that their water rights be returned to the hands of the public.
The water supply was privatized after the World Bank argued that poor governments, like Bolivia’s, lack sufficient organization, stabilization, and cooperation to efficiently run their own water systems. Bolivia’s heavy reliance on foreign assistance and investment puts them in a position where they have to take the World Bank’s advice seriously, preventing them from opposing the World Bank’s suggestions. The Bank argued that water privatization by foreign companies would promote foreign investment and increase entrepreneurial skill, thus improving the nation’s economy. While privatization did indeed foster economic growth and investment, it also accentuated the nation’s existing poverty and inequality.
Bolivia is South America’s poorest country and has been battling issues of debt for years. In 1997, the World Bank refused to renew millions of US Dollars in debt relief to Bolivia unless they agreed to privatize their water (The Nation). Bechtel, a US owned-company, won the contract to operate the municipal water company in Cochabamba (SEMAPA). Eventually Bechtel’s service area was expanded to the surrounding rural communities outside of SEMAPA’s original region in Bolivia.
Foreign companies like Bechtel, who now provided water services in Bolivia, raised prices substantially. The price of water was increased by 35-50%, about 20 USD. This made it very hard on the residents of these areas because their salaries were only about 100 USD a month. The working class could no longer afford to pay for water, perpetuating class antagonism and the nation’s social inequity. Tensions rose, rioting and protesting inevitably resulted, as the people continued to fight against privatization.
Cochabamba’s “Water Wars” have demonstrated significant stratification in socioeconomic status within the borders of South America’s poorest country. The civilian protests have been extremely radical and intense leading to a compromise by Bechtel, leading to a decrease in prices. Despite the reduction in water prices, all problems have not been resolved, as issues of sanitation and access to water still arise. Access to water in rural areas is only 71%; sanitation coverage in these same areas remains as low as 10% (The Nation).
Bolivia’s water wars illustrate the struggle between social welfare and economic productivity. In Bolivia, anarchy in the water market meant unequal access to this basic human right. In recent years, investment in the water sector has improved, with the goal of expanding water access to all. But the political and institutional instability still remains as an underlying problem for Bolivia’s water provision (Council on Hemispheric Affairs). Bolivia’s economic instability allowed private companies to implement profit-maximizing techniques, at the expense of the poor. Here, the dichotomy between water access and economic development becomes clear. With water in the hands of foreign capitalists, the state of Bolivia’s water security comes into question. Arguably, the impact on inequality undermines the benefits of any economic growth achieved through privatization.
1."On Water Scarcity and the Right to Life: Bolivia." Council on Hemispheric Affairs. N.p., n.d. Web. 25 Oct. 2014.
2."The Politics of Water in Bolivia." The Nation. N.p., n.d. Web. 25 Oct. 2014.
3. "Water Supply and Sanitation in Bolivia." Wikipedia. Wikimedia Foundation, 16 Sept. 2014. Web. 24 Oct. 2014.