Water. We see it everywhere. (see related story below)
Many of us take water for granted. All we have to do is open a faucet and this life-sustaining liquid just pours out into our glass to quench our thirst. But in many places it is not so simple to get that clean glass of water.
Over 70 percent of the Earth’s surface is covered with water. But, fresh potable water is fast becoming a scarce commodity for many people. Of all the water in the world only about 1 percent is available for people’s needs. The rest is either sea water or frozen in polar icecaps.
About 1.1 billion people lack access to clean, safe drinking water. Another three million lack adequate sanitation for their water supply. This results in the deaths of a minimum of five million people a year.
Currently we are using half of the available water supply. By the year 2025 we need to be able to use at least 70 percent of that supply. Experts fear a water shortage in the next 20 years that will impact two-thirds of the world’s population. Even countries like the U.S. are expected to face water shortages for 30 percent of its people.
The United Nations Environmental Program, in its Global Environmental Outlook 2000 (GEO-2000), calls the coming shortage of water a problem second only to global warming.
Aging water infrastructure, droughts and floods, population growth without adequate expansion of the infrastructure, wars and political upheavals have conspired to affect the ability of many people to get safe drinking water.
Disasters also hurt the local and national economic life beyond the health issues, furthering the problems. The recent droughts in Brazil and Mozambique have hampered or reduced the economic growth of those countries. In Zimbabwe the floods of ten years ago led to a Gross Domestic Product that was half the previous year.
The combination of water shortages, the need for infrastructure repairs and the fact that 95 percent of local water systems in the public sector and, especially in poor developing countries, local authorities may not have the necessary monies for capital improvements. This has given many transnational corporations the opportunity to make billions in profit. The corporations buying up public water supply are now not just the traditional companies engaged in that activity but other transnational corporations such as Enron, Bechtel and Monsanto.
A report in the Independent of
London said that Monsanto had made “plans to make billions of dollars out of the world’s water crisis” according to an internal document. The document stated that besides the potential for “vast economic opportunities” in making billions in profits, getting into the water business and spinning it as helping the world solve an environmental problem would also improve “Monsanto’s image as a more sustainable and environmentally positive company.” Monsanto has been strongly criticized for its genetically engineered foods by environmental, health and other activists.
Both the World Bank and the International Monetary Fund (IMF) are including privatization and “full-cost recovery” conditions on countries getting loans form these institutions. “Full-cost recovery” means that governments are no longer permitted to use tax monies to subsidize water.
From the 1960s to the 1980s it was a standard practice to give governments loans that were supposed to help them develop and upgrade their water and wastewater systems. The thinking behind this was that this would provide one of the conditions that would aid in the economic development of those countries.
Water was considered a natural monopoly of local governments insulated from competition from other sources. However, both the World Bank and the IMF have begun to look at water as a marketable commodity instead of a natural resource.
The World Bank claims that “the introduction of new models” is necessary to alleviate the water crunch and plan for future water expansion. They say “the urban water supply and sanitation sector must be reformed in order to improve sustainable access to adequate services. The needed reforms in service provision usually require a radical change in legal, regulatory, and institutional frameworks. Such reform often result in the introduction of some sort of private sector participation.” The World Bank identifies three issues that they say need changing: poor local management, too many workers and low prices.
This “private sector participation” includes a number of different privatization schemes. Besides the outright buying of local water authorities, there are also leasing plans where the private water company runs the local water system for profit.
These corporations either buy the water system outright or sign any kind of various contracts where they operate and manage the public water supply for a profit. These contracts run for periods of from five to 30 years (more frequently on the high side).
Today many loans have conditions to privatize all or parts of the water delivery system and/or to raise prices. The IMF is pushing Angola, Nicaragua, Sao Tome and Principe, and Yemen to “reform” their pricing and raise the cost of water to people.
It is also forcing Benin, Guinea-Bissau, Nicaragua, Niger, Panama, Rwanda, Senegal, Tanzania and Yemen to privatize their water supply.
The experience of people in countries where the governments have either bowed down or have been forced to accept the World Bank/IMF reforms have not been too encouraging nor has it been in countries where the government has adopted neoliberal economic policies. The privatization schemes have resulted in the local population taking almost all the risks while the transnational corporation get the benefits in profits. Approximately $60 billion is invested in water systems in the underdeveloped countries of the world.
As a condition for a new structural adjustment loan for Ghana, the World Bank has required that African country to raise the cost of its water to its citizens and will be leasing its Ghana Water Company to multinational corporations. The price of water doubled. Rudolf Amenga-Etengo, a leader of the National Coalition Against the Privatization of Water, said that the price of water “that the government of Ghana and the World Bank think are ‘below market rate’ are already beyond the means of most of the population of Ghana.”
The people of Argentina have also fared badly from the privatization of water as shown in the following two examples.
The Azurix Corporation, an Enron subsidiary, won the right to run for profit the water system in two regions of Buenos Aires province. The quality of service provided by Azurix was poor, they cut corners in the treatment of wastewater and violated environmental regulations. But, did Enron fix the problems? No! After having to pay fines of $1 million they decided to pull out of their 30-year contract leaving the people without water.
In the Argentinian province of Tucuman, a French water company took over the running of the public water supply and doubled the rates. After a payment boycott throughout the province the Compagnie Generale des Eaux decided to leave Tucuman three years later. This company went before the World Bank in an attempt to get Argentina to pay for their losses.
Compagnie Generale des Eaux is a subsidiary of Vivendi, the largest water company in the world. Vivendi has recently joined Enron, WorldCom, Arthur Andersen and other companies charged with cooking the books. Vivendi management have been charged with giving out false financial information with the goal of artificially raising its stock prices.
In Puerto Rico the Authority of Aqueducts and Sewers has been fined over $6 million dollars for violation of environmental regulations since Vivendi took over that U.S. colony’s water system.
Another case where the World Bank forced through its terms on the national government and where the people fought back was in Cochabamba, Bolivia. Cochabamba, the third largest city in Bolivia and situated in the Andes with a population of 800,000 people, had their local water supply sold to a consortium of private foreign companies, including the U.S. transnational corporation Bechtel, by the government of the then president Hugo Banzer in 1999. Many readers of this newspaper may be familiar with the name Hugo Banzer. He was the military dictator of that South American country in the 1970s.
The water company was sold for $20,000 even though it is worth millions.
The new privately-owned water company, Aguas del Tunari, then proceeded to raise the water rates an average of 50 percent with many paying more than twice the previous rate in January 2000. This prompted the population to stage a general strike with marches and demonstrations which brought the city to a complete halt for the better part of a week forcing the government to announce that it would bring down the rates to make them affordable for the people.
After weeks of no movement a coalition of community, labor and other organizations staged another demonstration which was attacked by police and soldiers brought in from outside the area. This two day attack, however, did not deter the coalition and the people. They continued the fight, not just in Cochabamba but in the whole country, and finally forced the government and Bechtel to rescind the buyout and return the water company to the local people, but not before the government had declared a national state of emergency and suspended constitutional rights in order to stop the protests.
Recognizing that community organizations may protest and fight against the privatization proposals, the World Bank attempts now to co-opt the civil sector and “include” community organizations in the planning of privatization schemes of the local water supply.
The water crisis, the attempt to control the water market by the transnational corporations and the fight back against privatization, have prompted a movement to consider access to clean, safe water a human right.
Just recently the United Nations Committee on Economic Social and Cultural Rights announced that water is a human right. In their statement announced on Nov. 26, they said, “Water is fundamental for life and health. The human right to water is indispensable for leading a healthy life in human dignity. It is a pre-requisite to the realization of all other human rights.”
In South Africa where there have also been fights against the water privatization, the right to water has been enshrined in the constitution’s Bill of Rights Chapter 2, Section 27.
Shortly after the end of the racist apartheid system in South Africa, the South African Communist Party (SACP) had launched a campaign for the health of the people including the right to clean, safe water. Chris Hani, the murdered General Secretary of the SACP, spoke of socialism being, in part, “about water for those who have no safe drinking water” and not just about “big concepts and heavy theories.”
The concept of water as a human right is gaining ground here in the United States.
Congressman Dennis Kucinich (D-Ohio) has come out in favor of water as a human right for people’s use and not for profit, in a statement released last August.
The author can be reached at jacruz@attbi.com
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Excerpts from statement by Ohio Rep. Dennis Kucinich
The current effort to increase access to clean water, however, is driven by private motives, which do not guarantee access, and do not guarantee affordability. Seen as a business, the global market for water will soon be worth over one trillion dollars according to World Bank estimates. With the collapse of the technology sector, Fortune magazine identified the water industry as the most profitable for investors. In this global market, water is viewed as a commodity to be traded, as a market to be captured, as a substance to be priced at whatever price the market will bear. In this water market, corporations can, as privateers, sail the bounded main and own all the water they can see.
In this market, international trade agreements, as exemplified by NAFTA, GATT and the WTO, guarantee corporations access to water anywhere in the world, and seek to make government resources and, tax dollars, available to those who wish to privatize water systems and other public service facilities. American tax dollars support multilateral financial institutions, and these are the same tax dollars that are used to guarantee profits to private companies for water privatization programs. Loan packages often guarantee a set rate of profit, such as 35 percent profit for a Suez project in Chile.
World Bank policies and International Monetary Fund policies are linked to increased cost recovery and water privatization. Last year, nearly 81 percent of World Bank Water and Sanitation loans contained cost recovery measures, and more than half contained privatization measures. We must work to ensure that water privatization does not continue.
We must declare that water is a human right, and agree to an international framework that water be kept outside the purview of the WTO. IMF and World Bank loans should not impose conditions that mandate full cost recovery and water privatization, and the United States bears a responsibility to ensure that its tax dollars given to multilateral institutions do not fuel more water privatization failures. We must pursue the goal of ensuring clean, affordable and accessible water for all people.
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