Globalisation case studies

Question 1

What is an example of a country that was helped by the IMF and the World Bank, and when?

Answer 1

Bolivia, in 1999

Question 2

What did Bolivia have to do to receive financial aid from The World Bank and the International Development Bank

Answer 2

• Water privatisation was a requirement for the Bolivian government in order to retain ongoing state loans
• The World Bank pressurised the government to give up its control of municipal water supply

Question 3

Who did Bolivia transfer control of water supplies to?

Answer 3

• To the company Aguas del Tunari
• It’s a multinational group owned by International Water, of which the San Francisco-based company Bechtel was the main shareholder

Question 4

What happened as a result of Bechtel’s water investment and management in Bolivia?

Answer 4

• When the company took over local wells and informal pumps as well as the public system infrastructure, many consumers were priced out of the market and were unable to pay the increased rates

Question 5

What was Bechtel’s revenue in 2000 and what does this compare to?

Answer 5

• Bechtel made an annual revenue of over $14 Billion in 2000
• Bolivia’s national budget at the time was only $2.7 Billion

Question 6

How did Bolivians react to being priced out of water?

Answer 6

• Riots eventually broke out in Cochabamba
• Violence shook the confidence of the local government and international investors

-