In 2000, many efforts were made to privatize Bolivia’s sewerage together with its drinking water services. This led to the emergence of the famous water war that was commonly termed as Guerra Del Agua (Perreault 150). The war attracted international criticisms while thousands of people who felt offended by the move went on strike stopping their daily chores to engage in streets demonstrations.
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Consequently, “the government declared a state of siege, and at least one demonstrator was killed by the military…forcing the government to rescind the concession made by foreign owned firm Aquas De Tunauri” (Perreault 150).
Bolivia water war challenged the way neoliberals’ economic policies were being applied in the context of managing natural resources, which a community feels that it has the right of ownership.
From the perspective of being a modernism and neo-liberalism critic, and with the case of Bolivia water war in mind, this report, which is meant for Bolivia government agencies, focuses on investigating the effects of modernization and neoliberal policies. The aim is to point out the defects in the assumptions of science and the aftermath of the commoditifying nature of privatization of environmental resources.
Neo-liberalism and Modernization Theories
Neo-liberalism covers economic beliefs that, when market forces operate freely by putting in place strategies of limiting the interference of the government in the business of organizations, a path towards the growth of the economy is acquired.
This implies that projects such Bolivia water project act as a product so that the market forces can act on it in the effort to provide the most favorable values of prices that ensure that demand and supply conditions are at equilibrium.
The danger of this approach in the context of management of public resources such as Bolivia water utilities is that use of the neoliberal beliefs would mean limiting those individuals who are incapable of paying for the commodity at prices, which the market is willing to offer in accessing the resources.
Put otherwise, the only persons who would access services are those who have the buying power equivalent to the prices determined by the market forces. On the other hand, the modernism theory insists, “low income societies develop economically only if they give up their traditional ways to adopt modern economic institutions, technologies, and cultural values that emphasize savings and productive investment” (Munck 23).
From the neoliberals’ governance perspective, privatization is one of the ways that are used to enhance service delivery in situations where public institutions have failed (McCarthy 276).
In particular, “in 1990s, there were pressures by the World Bank to privatize water supply services in major cities as a condition of debt relief and further lending in the water sector” (Rich 20). Thus, global institutions are also good supporters of the ways of enhancing the efficiency of supply of public goods. Hence, they are immense advocates of theories of modernization and neo-liberalism.
Relationship between modernization and neo-liberalism theory in the case of Bolivia water war
The Aguas Del Tunauri’s moves to increase the rate levied on water lead to Bolivia water war. According to Alurralde, groups of residents of Cochabamba protested, “the plans of Aguas Del Tunauri to increase water rates, an action that could have doubled or tripled the prices citizens would pay for this necessity of life” (37).
While UNDP recognizes that availability of clean and hygienic water is one of the fundamental human rights (Rich 20), the company had acquired control of Bolivia water utilities in the World Bank together with IMF’s recommendation to privatize the water utilities of the Cochabamba to enhance the quality of service delivery.
Resulting from the definition of neo-liberalism and modernism offered in the previous section, the circumstances leading to the recommendation of the World Bank and the international monetary fund have clear differences of modernism and neo-liberalism in them.
Arguably, Bolivia water war rose from the modification of the organizational structures of the water utilities to bring in the perspectives of forcing the community to adopt new approaches that would transform the utilities into investments that are more productive.
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Arguably, it is possible to realize from the reasons resulting to the privatization of Bolivia water utilities that there was the need to increase the efficiency of the water allocation mechanisms even though it would have implied rising costs of the necessary resources of the human life.
This was done using modernism and neoliberal theories, which would support such a move provided it leads to the root of economic growth through minimization of government restrictions and or if it leads to the dismissal of the traditional ways of resource allocation to embrace the perceptive of the modern economy such a privatization.
Consequently, Bolivia water war has inflexible ties with the modernism and neoliberal economic beliefs.
Critique of neoliberal policies in the case of Bolivia water project
The effort to privatize Bolivia water utilities may be seen as an attempt to concentrate the power of governance within a single entity perceived as having the best mechanisms of implementing economic ideologies that would result to the optimization of service delivery.
This claim in line with the neo-liberalism policy of making approaches, which have only the power of reviving economic policy theories developed by Smith, as well as the like-minded intellectuals who lived in the 19th century. Essentially, these theories lead to the creation of capitalistic models of making economic policies within nations.
By capitalism, it means that organizations are driven in the future by their attempts to increase their levels of profitability through an optimal allocation of limited resources. The allocation of resources is guided by market dynamics in which the best combination is the one, which produces the utmost good.
Arguably, since there is a link between the neo-liberalism perspective and the consequences of the decision to privatize Bolivia water utilities, it is also clear that such a move has the effect of neglecting the role of communities in regulating their environmental resources.
This argument is in agreement with Alurralde’s argument that policies developed in the case of Bolivia water project “failed to legally recognize the indigenous populations’ rights to the life sustaining important resource: water” (38).
Worse still, assuming that the application of free market forces would lead to the most optimal way of allocation of Bolivia water resources, as neoliberals and modernists would prescribe, leads to segregation of the allocation of Bolivia water resources based on economic endowments.
The argument is true because market forces would set the price or rate level to a certain amount such that only those who can afford the rate at which the market would manage to offer would actually utilize the water resources. In the end, this truncates into the deprival of the poorest persons’ rights to use the water resources based on their economic status.
Putting it differently, Funder et al. lament that the conflicts resulting from the differences in economic status between the rich and the poor leads to “dependency relations between the poor and wealthy households, something that can reduce the scope of action for the poor in water conflicts” (20).
In this sense, the modernism and neo-liberalism-inspired economic policies are adversaries to enhancement of the efforts of the poor to fight for their right to use water resources equally with the wealthy.
The above argument implies that the allocation of essential services such as water utilities through inspirations of neo-liberalism and modernism reasoning has the net implications of making projects such as Bolivia water project not to deliver and achieve goals for which it was established.
Indeed, privatization of institutions delivering public goods and essential services as a means of increasing their efficiency has failed in other parts of the world in some instances.
For instance, according to Rich, “in France, the home of private water giants, some 40 cities have de-privatized their water systems including Paris” (20). Additionally, evidence also suggests that the modernization and neo-liberalism-inspired policies’ assumption that market solutions together with privatization are the only ways of reviving public utilities, which are misused especially in the developing world, are not always true.
For example, in addition to the intense promotion of privatization by the IMF and World Bank as the main way of enhancing efficiency in the allocation of water utilities in Brazil, some 27 capitals principally receive their water services through public utilities. Surprisingly, these utilities are far better managed in comparison to similar utilities in the developed world (Rich 20).
One of the biggest worries of depending on the market forces and permitting them to operate freely to bring economic growth from the angle of allocation of water utilities in the case of Bolivia is what would happen in case of droughts.
From the discussions of modernism and neo-liberalism, it is possible that the resource would be allocated depending on how the market forces would shape the free market thus controlling forces of demand and supply. This means that, in case of drought, additional families would suffer from limited accessibility to water utilities.
In neo-liberalistic mind, this is acceptable as the prevailing condition and no other regulation mechanism can apply if the market forces were to be obeyed and allowed to operate freely without interference. On the other hand, “water deficits are traditionally borne by all community members with individual families expected to share the burden” (Alurralde 39) in Bolivia.
Therefore, application of neo-liberalism and modernism policies in the allocation of water utilities in Bolivia remains bad and discriminative based on the economic status of Bolivia’s communities.
The report paper discussed the decision to privatize Bolivia water project from the point of being inspired by the theories of modernism and neo-liberalism. While the policies developed are in agreement with the beliefs of these two theories, their proponents think of them as being the best ways of allocating public utilities.
The report paper has suggested that they lead to discrimination of people served by the utilities in terms of their social economic status. Arguing in the context of Bolivia water project, the report paper has held that allocating resources from approaches directed by concerns of modernism and neo-liberalism theories produces differences in resource utilization among communities who are to be served equally by the resource.
Alurralde, Juan. “Crisis in Cochabamba: a highly inclusive process draws community solutions to a decade’s long water conflict.” Alternatives journal 32.4-5 (2006): 37 -39. Print.
Funder, Martin et al. “Strategies of the poorest in the local water conflict and cooperation-evidence from Vietnam, Bolivia and Zambia.” Water alternatives 5.1(2012): 20-36. Print.
McCarthy, James, and Scott Prudhum. “Neoliberal nature and the nature of neo-liberalism.” Geoforum 3.5 (2004): 275-283. Print.
Munck, Ronaldo. Neo-liberalism and Politics, and the Politics of Neo-liberalism (pp. 60-69) in Alfredo Saad-Filho and Deborah Johnston: Neo-liberalism – A Critical Reader. London: Pluto Press, 2005: Print.
Perreault, Thomas. “From the Guerra Del Agua to Guerra Del Gas: Resource governance, neo-liberalism and popular protest in Bolivia.” Antipode 38.1(2006): 150-172. Print.
Rich, Bruce. Rights to water and privatization. Washington, DC: Environmental Laws Institute, 2011. Print.