Another multinational water privatizer is packing itsbags and leaving Bolivia. Last week, neighbourhoodorganizations in the Bolivian city of El Alto launchedan indefinite general strike demanding that Aguas delIllimani — a company whose main shareholder and operatoris French water giant Suez — immediately return thecity’s water system to public control. Three days later, theymarched en masse to the capital to claim their victoryand reiterate their full set of demands.

Given the overwhelming and inescapable publicpressure, the Bolivian government appears committed tocanceling the contract with Aguas del Illimani forwater and sewer services in the twin cities of El Altoand La Paz, the national capital.

While presidents, prime ministers and mayors aroundthe world confidently declare their jurisdictions“open for business,” the people of South America’spoorest country are taking down the “open” sign.

With a water victory seemingly locked up, Boliviannews reports say the citizens of El Alto are bringingfurther demands to the capital. These include reversalof recent government-decreed increases in diesel andgas prices. The increases have sparked major protestsin various parts of a country and resulting turmoil ingovernment. Bolivia has oil and gas reserves secondonly to Venezuela on the continent, and Bolivians arefed up with their resources benefiting foreignshareholders rather than their nation.

With the crescendo of popular unrest and civil societyconfidence, President Carlos Mesa issued a peculiarJanuary 12 release stating he is receiving many emailsasking him not to resign or reduce gas prices. Mesa’spredecessor was driven from the country in October2003 after oil-related protests left dozens dead.

The events in El Alto and La Paz follow the dramatic2000 Water War in Bolivia’s third largest city,Cochabamba. After five months of intense publicrevolt, the people of Cochabamba regained control oftheir water system from U.S. giant Bechtel and itswater privatizing partners.

Concerns about water services in El Alto (pop.800,000), where poverty is extreme, had been heatingup in recent months. People were dissatisfied with thelack of service in certain outlying areas and highcosts. New connections for water and sewer ran as highas $445 (all figures in U.S. dollars). According to UNdata, 34 per cent of Bolivia’s 8.6 million people live on lessthan $2 a day and the minimum wage is about $66 permonth.

Jim Shultz, who helped break the story of the 2000Water War to the world from the streets of Cochabamba,notes how differently this conflict is playing out. Onthe website of The Democracy Center, which he heads, Shultz credits the government for not declaring astate of emergency or militarizing the city ashappened in Cochabamba where one young person ended updead. President Mesa says he will resign if proteststurn deadly.

Water for profit

In 1997, amidst an era of rampant privatization andeconomic neo-liberalization, the Bolivian governmentgranted Aguas del Illimani a 30 year concession to runwater and sewer services in La Paz and El Alto. Theconcession gave the company exclusive rights toprovide water and sewer services within a specifiedarea.

According to a 2004 World Bank document it alsoallowed the company to “charge a fee for privategroundwater extraction in its service area” and todisconnect customers after two months of unpaid bills.The contract required the company to provide “close to100 per cent potable water coverage to the city of El Alto by2001.” This issue has remained contentious.

The World Bank, in its zeal for privatization,pressured the Bolivian government into granting theconcessions. Despite denials of such influence, aSpring 2002 report by the World Bank’s Operations Evaluation Department says “the President of Boliviadecided to privatize the La Paz and Cochabamba waterand sewage utilities, a [World] Bank condition for thetwo year extension of the loan to 1997.” The Bankprovided nearly one quarter of the $68 million pricetag for the initial five year phase of the project.

Between a rock and a general strike

According to Bolivian news reports, discord betweenthe government and Aguas del Illimani had beenincreasing. The government refused to renegotiate thewater contract to include the sharp price increasesthe company wanted. And with public unrest looming,the government was reportedly agitated by a terseletter the company sent to the President on January 7.

At the same time, Bolivan Vice-Minister of BasicServices, José Barragán expressed concern about the40,000 families in El Alto who don’t have access towater. “It is an injustice that they have to live thisway,” he told Bolivian press.

From private to public to participatory

Correcting that injustice will take more than theouster of a multinational. Anil Naidoo, who works oninternational water issues for the Council of Canadians , emphasizes the need look beyond justremoving the corporation to creating an effective anddemocratically responsive public water system. Thealternative to corporatized water must be better thana poorly run public system, which, as Naidoo pointsout, simply creates conditions which open the door tothe peddlers of privatization.

Oscar Olivera, head of the organization that led thecampaign to regain control of water in Cochabamba,says the issue is not simply private versus public butrather the establishment of participatory localcontrol of resources. “The people want to participatein the management of all that affects their dailylives,” says Olivera. “The people want to construct anew model.” In Cochabamba the people continue the hardwork of establishing an effective and democratic watersystem. This is the challenge now in El Alto and LaPaz.