Question

Assertion [A]: The Bolivian government sold the muncipal water rights of the city of Cochabamba to a multinational company.

Reason [R]: Bolivia was facing economic meltdown and the World Bank had placed certain conditions on the government for providing financial help.

Read the above given statements and select the appropriate option.

• A. Both A and R are true and R is the correct explanation of A.
• B. Both A and R are true but R is not the correct explanation of A.
• C. A is true but R is false.
• D. A is false but R is true.

Answer 1

The correct option is A Both A and R are true and R is the correct explanation of A.

Cochabamba is the third largest city in Bolivia. In 2000, this city witnessed a series of events that profoundly altered the nation’s political landscape. Bolivia was facing economic meltdown and the World Bank had placed certain conditions on the government for providing financial help. As a result, Cochabamba’s municipal water company, SEMAPA, was sold to a US-based transnational consortium in exchange for debt relief for the Bolivian government. For profit motives, the multinational comapny increased the prices of water by 50%. This led to a series of protests that eventually led to the restoration of the city's muncipal water rights to SEMAPA. Thus, water-justice advocates look to Bolivia for successful alternative models to privatization.