MOYERS: Welcome to NOW.
On this Fourth of July weekend, we want to take you to where protest and dissent still matter.
In 1776, it was a tax on tea that had stirred the rebellion.
In our story tonight, it's the price of water yes, water.
Where I live in New York, we take water for granted.
Turn on the tap and there it is on the cheap.
You'd have a riot on your hands if you tried to auction it to the highest bidder.
But elsewhere in the world, water is scarce and becoming as valuable as liquid gold.
In the name of globalization, it's being argued that only the market can distribute this scarce commodity more efficiently, and water rights are being bought up by multinational corporations.
Those who need water are pitted against those who want it for profit.
Our report from Bolivia is a collaboration with the new PBS series FRONTLINE/WORLD by producer David Murdock and the NEW YORKER'S William Finnegan.
WILLIAM FINNEGAN: Who does water belong to? Who should control it? In a globalizing world, these questions drive an increasingly polarized debate.
On one side are those who believe water is a public good a human right which cannot and should not be controlled by interests out for profit people like Oscar Olivera, a Bolivian labor organizer.
God, has given us water. It rains in the high country, it rains on the lakes, it rains on the fields… The only thing the water company should do is to help St. Peter get the water to the people so that we all are able to use it.
FINNEGAN: On the other side are those who believe in the privatization of water that the free market is the most efficient mechanism to deliver the water that people need.
JOHN BRISCOE, SENIOR WATER ADVISOR, WORLD BANK: If you are genuinely concerned with them getting water, what is the best route to do that? It's a practical question, not a moral question. And a declaration that water is owned by the public to be managed by the public for the good of everybody -- we've had decades of that, and it hasn't worked. It's a -- it's a -- it's a simple reality that it hasn't worked.
FINNEGAN: I went to Bolivia because I had heard about a conflict in which the forces of corporate globalization met fierce local resistance.
It was a fight over water and it took place in a town called Cochabamba.
Bolivia is blessed with great natural beauty but it's the poorest country in South America.
Seventy percent of its citizens live in poverty. Nearly one in every 10 children born here dies before the age of five.
Since the 1980's Bolivia, has been financially dependent upon the World Bank and the International Monetary Fund.
These powerful institutions lend money to strapped governments with conditions such as privatizing public assets on the assumption that where government has failed the market will succeed.
Bolivia's leaders have followed their instructions, dutifully selling off national industries airlines, utilities, mines, railroads to private companies. Usually foreign corporations.
Many Bolivians resent the idea that their country's policies are being dictated by outsiders.
Bolivia's a very poor country but we are sitting on a chair of gold. We have gold mines, oil, gas. We have everything but we sell it all off to other countries.
FINNEGAN: The Bolivian economy got dramatically worse after the United States pressured Bolivia into eradicating its most lucrative export coca the leaf that can be turned into cocaine.
JORGE QUIROGA, PRESIDENT OF BOLIVIA: Drugs, illegal as they may be, they were 3% of the GDP. 18% of exports, that was the estimate that we had. To put it in context, 3% of GDP in the US is agriculture and mining sector combined.
FINNEGAN: Jorge Quiroga is Bolivia's President. He's a former IBM executive with a degree in industrial engineering from Texas A & M.
QUIROGA: Illegal as it was, bad as it was, damaging as it was, if you look at it from a purely business standpoint, it was, a business with high value added, going coca to cocaine. It was Milton Friedman or Hayek heaven: all privately run, no taxation, no regulation and in essence if you want to look at it cynically duty free access to markets. As long as you're willing to lose part of the merchandise in seizures every once in a while.
FINNEGAN: Politicians like Quiroga fully supported the coca eradication, but the loss of drug money only increased Bolivia's dependence on international financial institutions, particularly the World Bank.
LUIS BREDOW, BOLIVIAN JOURNALIST:
The World Bank is the government in Bolivia and I think in many developing countries. There is no developing country that can get a foreign credit without the World Bank accepting it. So the World Bank said, all the countries that have a huge debt well from now on your water systems have to be privatized. Because if you don't do this you don't get money from, from the international loans.
FINNEGAN: In the 1990's Bolivia put up for auction the water rights of its largest cities, including Cochabamba.
Half of its 800,000 citizens were not yet hooked up to the city water system.
Many were paying exorbitant prices for water delivered by trucks.
Cochabamba looked like a perfect opportunity for foreign investment.
But when the government put the city's water up for auction, only one bidder appeared a company created solely for the occasion called Aguas del Tunari.
Doubts about the wisdom of the deal surfaced immediately among local environmentalists and peasant farmers even the World Bank, didn't support the plan.
FINNEGAN (ADDRESSING QUIROGA): Why didn't the government stop the process?
QUIROGA: Because it was, it's necessary to bring, to bring private investment to develop the water project
FINNEGAN: Sure, but...at some point the government seems as some point to have been at a terrible disadvantage with just this single bidder getting this contract...
QUIROGA: Well I, I think it's happened in several times. I mean Bolivia is not, it's not the Brazil of the world where they're lining up to invest in different things. I think we've had lots of processes where we'll wind up with not as many bidders as we thought.
FINNEGAN: Aguas del Tunari leased the Cochabamba water system for 40 years.
It was a two and a half billion dollar deal.
The contract promised the Bolivians improved service it also guaranteed the company an annual profit of 15-17%.
Then two months after taking over the Cochabamba system, Aguas del Tunari raised water rates by as much as two hundred per cent.
People making eighty dollars a month were being asked to pay 20 dollars a month just for water.
As soon as the rate hikes went into effect, people took to the streets in protest.
Graffiti began appearing on city walls, this one is typical: "with the people mobilized, we will cancel the contract with Aguas del Tunari." "Thieves."
But who exactly was Aguas del Tunari? Jim Shultz, an American journalist and activist living in Cochabamba, undertook to find out.
SHULTZ: Nobody understood really who Aguas del Tunari was. Mostly we knew that Aguas del Tunari had a parent company, that owned it and managed it which was International Water Ltd. So I went to their home page to see if there was anything on their Web site that actually mentioned Bolivia by name. And it was from this page that we figured out that International Water Ltd. was founded in 1996 by Bechtel.
FINNEGAN: Bechtel was a name people knew. Based in San Francisco, it's a huge, privately owned engineering, and construction company with vast political connections.
In recent years, it's been getting into the world water business through its subsidiary International Water, Ltd.
And this was not something that the press here had reported. Nobody, nobody understood who International Waters was. Nobody understood really who Aguas del Tunari was.
FINNEGAN: To Shultz, it appeared the Bechtel Corporation had come to town under an assumed name.
All around Cochabamba, people were meeting to talk about water…
OSCAR OLIVERA, UNION ORGANIZER: We are the owners of these fields, we own the roads, we used to own the oil wells, and the airlines, and the railroads…
FINNEGAN: Oscar Olivera, who once a shoe factory worker, was now one of the most effective organizers against the water privatization…
OLIVERA: We once owned the mines, but they've been taking everything from us little by little, my brothers.
LUIS BREDOW: Oscar Olivera is a very respected labor leader in Cochabamba.
One or two years before the revolt he already told me water is going to be the, the thing. And he was right, he was right.
FINNEGAN: Olivera understood that selling off a water system is not like selling off a phone company.
Water isn't manufactured, it falls freely from the skies, it's essential to life.
In Cochabamba, peasants said Bechtel was trying to lease the rain.
Cochabamba's water problem has worsened over the last 25 years as hundreds of thousands have moved into the city from rural areas and smaller towns.
The water system has been overburdened and the water table beneath the city is dropping rapidly.
Many of Cochabamba's new residents moved to the city after losing their jobs when national industries were privatized.
In the market district you'll find displaced miners, factory workers, and farmers jammed together hawking cheap foreign-made products.
Cochabamba's ever expanding market district filled with migrants from the countryside now takes up 25 blocks in the center of the city.
The neighborhood of San Miguel is filled with migrants from depressed mining areas.
Fredy Villagomez showed me around.
This whole block is family and people from my village. For example, in this house is my cousin, then another cousin, then my house, and above that another family all from the same village.
FINNEGAN: Like many of Cochabamba's neighborhoods they've never been hooked up to the water system.
So eight years ago, the residents of San Miguel took matters into their own hands and dug themselves a well.
This is the well that was finished in 1997. All of us from the region built it by working together, everyone as a group so it belongs to all of us by right, because we all invested our hard work in this well. We fought a lot and sacrificed a lot to build it...
Right now, 210 families get water from this well.
FINNEGAN: A single tap provides water for all the household needs of Fredy's father, Angel.
This barrel we use for washing clothes, that barrel is to store our drinking water, we wash ourselves in the sink here. And since this is a poor neighborhood, the sewage goes out into the street.
FINNEGAN: Even in parts of the city that were hooked up to the network, Cochabamba's water service was always inconsistent.
MICHAEL CURTIN PRESIDENT, AGUAS DEL TUNARI: I think it's very difficult for Americans to understand this, because we have water 24/7. But in in Cochabamba you had people who only had water one hour a day, one day a week. You had others who had water eight hours a day, seven days a week. We can provide public service in providing safe, secure water supplies to people. We're doing this in Estonia, Manila and Bulgaria. We see no reason why we could not have done it in Cochabamba.
FINNEGAN: The government wanted to expand the city's water network, but according to Aguas del Tunari, it simply couldn't afford to.
CURTIN: Cochabamba operated at a loss of better than a $2 and a quarter million a year for the past five years, six years. They have debts of $35 million. They're running a deficit. How can they possibly expand their water under those conditions? So they have now turned to the private market to do that. In so doing, the rates charged for those services have to be increased to where they cover at least costs.
FINNEGAN: With rates soaring, people in Cochabamba felt the company wasn't just covering costs, it was gouging them.
The demonstrations grew. The streets of Cochabamba filled with protesters.
Word spread that not only were rates going up, but Aguas del Tunari could start charging people for water it didn't even provide including the water from privately dug wells like the one I saw in San Miguel.
FREDY VILLAGOMEZ: When word got around that the wells would pass into the hands of Aguas del Tunari and they could start charging us for the water, the people took action.
FINNEGAN: Fredy Villagomez joined a group of protesters blocking roads going into town.
FREDY VILLAGOMEZ: This whole road was blocked. There was a big tree here that they dragged out with a tractor…then they piled an old car on top of that. And nothing, nothing could pass.
FINNEGAN: The water protests…were becoming a water war.
BREDOW: We have protests every day in, in Bolivia. They go on hunger strike very often or they can even crucify themselves and nothing happens.
FINNEGAN: But this time was different…
BREDOW: Housewives, people that you wouldn't believe could become violent. They were there, they were throwing stones at the police. Everybody was protesting, everybody.
OLIVERA: We have always repeated those slogans death to the World Bank, death to the IMF, down with Yankee imperialism…But I believe that it is the first time that the people understood in a direct way how the policies of the World Bank free trade, free market that is putting us at such a disadvantage among the most powerful countries.
FINNEGAN: Aguas del Tunari's initial response to the protest was blunt if people didn't pay their water bills, their water would be cut off.
The response of the government, fearing the demonstrations would threaten foreign investment in Bolivia, was blunter still.
Cochabamba's water war expanded to include the rest of the country, and a multitude of concerns.
Demonstrations broke out over indigenous people's rights, police wages, official corruption.
On April 7th, 2000, the government declared a state of siege. Though a major American corporation was at the center of the Bolivian unrest, not a single U.S. newspaper had a reporter on the scene.
And yet, news of the uprising was reaching a worldwide audience through the internet.
The source was an electronic newsletter with thousands of readers written by the American who had uncovered the Bechtel connection Jim Shultz.
He was in the streets during the uprising, and filing daily accounts about events in Cochabamba.
I was really taken aback by how powerful this was. Not as just a story but it was something we could communicate and get around to so many thousands of people. So then the question was, how do we put pressure on the company? Then one of my readers sent me a note and said, you know, I can get you the CEO's personal e-mail address. So within about 24 hours we were able to give thousands of people in the United States the personal email address of the head of Bechtel.
And people started in the States started bombarding Bechtel with emails, telling them basically that they should get out of the country, that it was the only way that they were going to stop the violence in Bolivia was if they left.
FINNEGAN: Meanwhile, in the streets of Cochabamba, the water war was about to turn deadly. A local TV camera caught an army sharpshooter in civilian clothes firing into a crowd of unarmed protesters.
Victor Hugo Daza, a seventeen-year old student was in the crowd. He was hit in the face and died instantly.
It was becoming clear that there was no future for Aguas del Tunari or Bechtel in Cochabamba...
The company executives fled the city.
Celebrations broke out in the streets.
From the balcony of his union office, Oscar Olivera announced victory.
But did anyone really win Cochabamba's water war?
Late last year, Aguas del Tunari filed a claim against the Bolivian government seeking more than 25 million dollars in compensation.
The case will be heard in Washington DC in a trade court run by the World Bank.
MICHAEL CURTIN PRESIDENT, AGUAS DEL TUNARI:
We're not looking for a windfall from Bolivia. We're looking to recover our costs. Now, we can also claim lost profits. We may do so. That's a very large number.
FINNEGAN: The government is fighting the suit, insisting the company spent less than a million dollars in Bolivia.
President Quiroga remains a champion of foreign investment.
But in the wake of the violence, it's hard to find foreign investors.
JOHN BRISCOE SENIOR WATER ADVISOR, WORLD BANK:
If this is considered too risky, they'll go away. And then we'll have declarations of human rights and all these good things, and no one'll have any water. And, you know, I think that's a tragedy; because the countries need investment, they need expertise. They need all of these things. These are all healthy things to have.
FINNEGAN: In Cochabamba, the water warriors who chased out Bechtel took control of the water system vowing to treat water as a human right not as an ordinary commodity.
But without new investment they are unable to expand the network or improve service.
They're searching for a new model - something between state control and the private market.
Neither the Bolivian government nor the World Bank, has any plans to help them.