world bank sucks water
foe
malaysia
Friends of the Earth International
delivered large quantities of “World Bank
Springs” tap water bottles to World Bank
President James Wolfensohn in September
2002, including a bill for US$318 million,
25% of the World Bank’s annual
administrative budget of $1.27 billion, and
a rate comparable to the water rates
charged poor Cochabamba residents by the
Bechtel consortium.
The World Bank and other international
financial institutions play a key role in
promoting water privatization around the
world, in alliance with the multinational
water giants and the trade agreements,
promoted by industrialized countries, that
pry water markets open for corporate
access.
In many developed countries, including
the United States, Japan, Germany, Sweden
and the Netherlands, water is supplied by
the public sector. However the World Bank
is telling Malaysia and many other indebted
countries to privatize their water
utilities because our public sectors are
incompetent. This means, in effect, that
water users will pay the full costs of the
operation and maintenance of these
countries’ water systems, increasing prices
for people and creating opportunities for
the global water giants to take control
over our water. In March 2000, the World
Bank and the United Nations sponsored the
second World Water Forum in The Hague,
which was dominated by water and food
transnationals. The Bank has also helped to
spawn a bewildering array of front
organizations on water, including the World
Water Council, the World Commission on
Water for the 21st Century and the Global
Water Partnership (see page 10). These
bodies provide a forum for making deals
between major water companies, multilateral
banks, UN agencies and NGOs. The Bank
realizes that the concept of water as an
economic commodity is still unpopular and
politically unacceptable, and these
strategic partnerships allow the water
companies to disguise their economic
motives as public interest objectives.
The World Bank and other multilateral
and regional donors are powerfully placed
to persuade governments to comply with
privatization agendas, being the single
most important source of loan finance for
infrastructure investment in poor countries
like Malaysia. They demand “public sector
reform”— the privatization of state-owned
companies — as a condition for getting
loans. Some of the poorest countries in the
world, including Mozambique, Benin, Niger,
Rwanda, Honduras, Yemen, Tanzania, Cameroon
and Kenya, have been forced to privatize
their water supply under pressure from the
IMF and the Bank. Ironically, most of these
countries privatized as a condition for
receiving credits from the IMF’s new
Poverty Reduction and Growth Facility.
Rather than reducing poverty, water
privatization often means that the poorest
families are no longer able to afford clean
water. For example, in May 2001 Bank and
IMF conditionalities imposed a 95 percent
hike in water fees in Ghana, doubling the
average price for a bucket of water.
Although the World Bank claims that it
aims to “reduce waste of this vital
resource”, privatization may lead to
greater water wastage. In 1996, a World
Bank team led by John Briscoe, now the
Bank’s senior water advisor, criticized
leakage levels of between 1 and 5 percent
in Germany’s public sector for being too
low. According to his report, water should
be allowed to drain away if the cost of
stopping the leak is greater than the price
for which it could be sold at a profit.
The Bank’s insistence that “water must
be treated as an economic good” means that
if you are rich enough, you can use water
as wastefully as you like. For the poor,
however, access to water for even the most
basic of needs will be a daily
struggle.
Friends of the Earth
Malaysia
see
also photos from the foei action in
Washington
photo credits: janneke
bruil,oxfam-solidarité,www.oxfamsol.be
