Both The IMF and the World Bank were founded at Bretton Woods in July 1944 to serve a critical need that existed towards the end of WWII in response the international chaos of the world financial systems. The Great Depression was still in recent memory, and the European economies were in shambles as WWII was coming to a close. It served its initial purpose admirably, by assisting in the rebuilding the countries and economies of both Europe and Japan. Few would dispute their success in these endeavors, but as time changed so has their mandates.
Since the World Bank and the IMF often work in lock-step having the same conditionality requirements before countries can be considered for funding, they are often accused of promoting the …show more content…
(WikiProject_Bolivia, 2015) There were three cities associated with the rehabilitation program, Santa Cruz de la Sierra, La Paz and Cochabamba. The World Bank made conditions on one of its loans to Bolivia for a major water and sewage rehabilitation program for two out of three cities. One of the conditions was to privatize the municipal water utilities. Aguas del Tunaria, was the private consortium of international firms that purchased the municipal utility for Cochabamba and assisted in funding the …show more content…
In La Paz, the result was mixed, and in Cochabamba it was a failure and available water decreased by 40-70% and was unavailable for four hours each day. There were local mitigating factors which increased the price of the project which resulted in an increase in the water price. This increased triggered rotating general strikes and violence. These protests lasted from January 2000 through April 2000. On April 11, 2000, the Bolivian government changed the law and reinstated public ownership of the municipal water supply in Cochabamba after these protests brought the country to a standstill.
The negative result experienced in Cochabamba was inevitable because the World Bank was enforcing conditions which went against local beliefs and political interests. The foreign ownership and sharp increase in costs bred resentment among Bolivians impacted by the project, which resulted in political turmoil. This is particularly true because an “ivory tower” mentality is pervasive in the World Bank and IMF and thus prevents the fine tuning of such policies to the needs of the receiving
Since the World Bank and the IMF often work in lock-step having the same conditionality requirements before countries can be considered for funding, they are often accused of promoting the …show more content…
(WikiProject_Bolivia, 2015) There were three cities associated with the rehabilitation program, Santa Cruz de la Sierra, La Paz and Cochabamba. The World Bank made conditions on one of its loans to Bolivia for a major water and sewage rehabilitation program for two out of three cities. One of the conditions was to privatize the municipal water utilities. Aguas del Tunaria, was the private consortium of international firms that purchased the municipal utility for Cochabamba and assisted in funding the …show more content…
In La Paz, the result was mixed, and in Cochabamba it was a failure and available water decreased by 40-70% and was unavailable for four hours each day. There were local mitigating factors which increased the price of the project which resulted in an increase in the water price. This increased triggered rotating general strikes and violence. These protests lasted from January 2000 through April 2000. On April 11, 2000, the Bolivian government changed the law and reinstated public ownership of the municipal water supply in Cochabamba after these protests brought the country to a standstill.
The negative result experienced in Cochabamba was inevitable because the World Bank was enforcing conditions which went against local beliefs and political interests. The foreign ownership and sharp increase in costs bred resentment among Bolivians impacted by the project, which resulted in political turmoil. This is particularly true because an “ivory tower” mentality is pervasive in the World Bank and IMF and thus prevents the fine tuning of such policies to the needs of the receiving