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Essay On Water Privatization

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Bolivia has endured poverty and governmental instability since 1825, when the Napoleonic wars ended and the nation gained independence from Spain. Bolivia currently has a per capita income less than one third of most other Latin American countries, and more than half of its citizens living below the poverty line. Cochabamba is Bolivia's third largest city with a population of 600,000. Cochabamba experienced a water crisis in which only 57% of the city's population had water coverage until the public utility (SEMAPA) and the Bolivian government took action toward this in the late nineties. The World Bank and IMF offered a $14 million loan and $600 million in debt relief to Bolivia, under the requirement that Bolivia privatized Cochabamba's water. Advocates of this deal believed that corporate control would allow the water to reach more people and be provided more efficiently.

In September 1999, Bolivia accepted a $2.5 million contract turning over Cochabamba's water to a company called Aguas Del Tunari, for a 40-year lease. This company was 55%
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Clearly, something went wrong in Bolivia. Internationally regulated trade seems a necessity, but there is surely a better way to do it. For instance, how much leverage did Bolivia have in the IMF? It seems they were the weaker party, in need of the IMF as savior. The problem is that inevitably the benefactor-beneficiary relationship is not sustainable, and can often hurt the beneficiary when the benefactor assumes control. If developing nations that participate in the IMF (whether receiving loans or otherwise) had equal power when it comes to decision making, they would not be taken advantage of by multi-national corporations. All countries participating in a trade organization should have equally powerful voices. This is the only way to keep the natural course of global capitalism from destroying weaker
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