2. +
Corporate Control
The global water crisis like many environmental concerns was
not an issue to the masses until the 1980s except for one
sector.
PRIVATE SECTOR
(Global Corporations
Private Sector = Private, for profit!
3. +
40 years ago:
Only the elite drank bottled water
Technologies were in their infancy
Pipelines for water diversion did not exist
Water services were delivered by state owned
public utilities
Those living in the rural South relied on local
rivers, lakes and wells for their water
4. +
The development of the water systems during the late
nineteenth and early twentieth centuries in industrialized
countries were public water , farming, and sanitation services.
5. +
WHY?
Public systems were allowed to take out long-term loans at
better rates than were available to the private sector.
The obvious benefit was that the savings from the loans were
passed on to the public as lower rates.
6. +
However, in many countries of the Global South, consumed by
a growing poverty class and increasing public debt, the story
was quite different and the public sector was ready to move
into the water market for profit.
The costs of all aspects of water management are enormous
7. +
By the 1990s, the "public model" for financing water projects
CHANGED and the "private model" for financing water
projects was favored.
8. +
The frontrunners of this
change at that time were the
European private water
companies.
Britain, under Margaret
Thatcher, adopted water
privatization in England
(1989).
Soon, the United States,
under Ronald Reagan, joined
those favoring water
privatization
9. +
The "Washington Consensus" was soon adopted by:
the World Bank,
the International Monetary Fund, and shortly
thereafter,
the United Nations.
10. +
Disregarded at the time
that after privatization was
actually implemented:
Thousands of workers were
laid off
Millions had their water cut
off when they could not pay
their water bills.
11. +
During this period of time, the global South became ripe for the
pickings by the Global North Carpetbaggers!
Poor countries owed money to the World Bank and were
unable to pay. But, the World Bank agreed that it would
renegotiate the loans IF:
the countries undergo Structural Adjustment Programs that required
them to sell off public enterprises and utilities and privatize essential
public services.
Water and sanitation services were immediately target
WHY?
12. +
The structure of the World Bank is control of its decision
making was done by a vote of its country members.
Voting power was proportional to the amount invested.
Control was vested in the United States, Japan, Germany,
England, and France.
Which countries had corporations that wanted to wrestle control
of the water system?
13. +
A World Bank Article of Agreement actually states that a
principal goal is the promotion of private investments
In 1993, the World Bank adopted the Water resources
Management policy paper which noted:
the unwillingness of the poor to pay for water services and stated
that water should be treated as an economic commodity, with an
emphasis on efficient, financial discipline and full-cost recovery.
14. +
Precedent was set for the proposition that:
Corporations can set water prices high enough to
not only recover the cost of their investment, but to
make profits for their investors.
The result:
Loans for public projects were rejected in favor of a
private model. Between 1990 and 2006, the World
Bank funded more than 300 private water projects
in developing countries.
15. +
There was a problem though in
getting local acceptance of the
privatization model:
It was necessary to involve the
elite of the targeted country . . .
And as a consequence there
became local business
involvement in the projects for
their own financial gain.
16. +
As Barlow points out:
"A great deal of work, money and planning has gone into acquiring the 'manufactured
consent' of the global ruling class to water privatization." Barlow, Blue Covenant, p. 42
[The rich get richer!]
17. +
The consensus of those reflecting on the past:
"Debt and poverty are not the problem. The main problem which
degraded water services in the Third World is inefficient and corrupt
governments whose failure to protect water, so as to reflect its true
cost, has led to a culture of wastefulness among the masses."
Barlow, Blue Covenant, p. 43
18. +
THE CONSEQUENCE:
ACCEPT ONE OF THE MAJOR WATER CORPORATIONS
OR GO WITHOUT FUNDING.
19. +
The United Nations, in 1992, at
its Dublin Conference, declared
that water:
Has an "economic value"
In all its "competing uses" and
Should be recognized as an
"economic goal."
20. +
Then came the World Trade Organization in 1995.
The General Agreement on Tariffs and Trade (GATT) found
water was a "good" and as such, is subject to the rule that
prohibits the use of export controls for any purposes.
WATER COULD BE MOVED FREELY FROM ONE
COUNTRY TO ANOTHER.
The General Agreement on Trade in Services (GATS)
intended to allow for private competition in sectors once
controlled exclusively by governments. GOVERNMENTS
HAD NO EXCLUSIVITY TO WATER. (THIS INCLUDES
ENVIRONMENTAL SERVICES, WASTEWATER TREATMENT,
PURIFICATION SYSTEMS, CONSTRUCTION OF WATER PIPES,
GROUNDWATER ASSESSMENT, IRRIGATION, AND WATER TRANSPORT
SERVICES)
21. +
A number of groups have popped up purporting to be the
protectors of global water like:
World Water Council (but it is sponsored by the
World Bank and the United Nations). Its policies
may be biased.
AquaFed (a lobbying group for the Private Water
Operations). Its policies may be biased.
22. +
Conference after conference for years purportedly neutral in
their ideologies but funded by global corporate conglomerates
have been held.
The consensus always supported privatization.
NO SURPISE HERE!
23. +
Big water companies provide water to over six hundred million
people (10% of the world's population)
Of the four billion people who have water services (15% of
those) have their water services provided by private big water
operators.
24. +
The World Water Forum refused to recognize water as a
"human right", instead calling it a "human need."
25. +
Even at the Third World Forum in Kyoto in March, 2003, the
consensus was that the private sector should run the water
systems of the global south and again the participants refused
to recognize water as a "human right".
The Candessus Committee Report supported full-cost recovery
for water projects and advocated the use of public funds to pay
for the preparation of private contracts and tenders.
26. +
PRIVATIZATION'S LEGACY:
Corruption
Sky high water rates
Cutoffs of water to millions
Reduced water quality
Nepotism
Pollution
Worker layoffs
Broken promises
Led to foreign control of water
Created monopolies
27. +
While corporations argue that a favorable legacy would be
assured is if for them to have access to public subsidies. This
is the very thing (the dollar cost of water services) that they
were supposed to have assumed.
28. +
"The net contribution of 15 years of privatization has thus been
to significantly reduce the funds available to poor countries for
investment in water.”- David Hall and Emanuele Lobina, Pipe Dreams,
The Failure of the Private Sector to Invest in Water Services in Developing
Countiries (2006), citing in Maude Barlow, Blue Covenant (2007), p 59.
29. +
Be careful, if it walks like a
duck, and quacks like a duck .
. . It is probably a duck.
The World Bank has tried to
repackage and re-launch
privatization under the softer
guise of a public-private
partnership.
