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dam-l Financing water supply for the poor/LS
>>> *** 05-Aug-99 ***
>>>
>>>Title: FINANCE: World Water Commission Tries to Fill All Glasses
>>>
>>>By Abid Aslam
>>>
>>>WASHINGTON, Aug 5 (IPS) - Some 1.2 billion poor people in
>>>developing countries pay on average 12 times more for water than
>>>do their better-off compatriots, say world water experts.
>>>
>>>And, cut off from municipal systems, the poor are forced to buy
>>>water off the back of a truck and often get a diseased swill
>>>responsible for some four million deaths per year, according to
>>>the multi-donor World Commission on Water for the Twenty-first
>>>Century.
>>>
>>>That is a gross injustice - but also a business opportunity,
>>>says the group, which will meet in Stockholm Aug 9-10 to discuss
>>>ways of raising 31-35 billion dollars that it says will be needed
>>>annually to provide universal access to water by the year 2010.
>>>
>>>''The poorest developing countries are unlikely to have the
>>>funds, even through international aid, to finance such
>>>development'' and therefore must tap transnational corporations
>>>and domestic investors, according to a Commission statement.
>>>
>>>Otherwise, the number without safe water will rise to 2.3
>>>billion by 2025, warns Commission Chairman Ismail Serageldin.
>>>Needs will be especially acute in cities, which face 160 percent
>>>population growth by 2030, compared with 10 percent in the
>>>countryside.
>>>
>>>The Commission's thrust toward commercialisation of water
>>>supplies could well test the adage that "water has sank more
>>>grievances than wine," observers opined.
>>>
>>>Public workers in Paraguay have threatened a general strike
>>>over privatisation plans, which they see as a union-busting
>>>effort. The World Bank, reportedly dissatisfied with stalled water
>>>deregulation, has suspended a 46-million-dollar loan to the
>>>country, according to news reports.
>>>
>>>French water companies have met resentment in Argentina, where
>>>they have raised prices beyond agreed levels and threatened to cut
>>>off people who can't pay.
>>>
>>>South African workers and community groups have been fighting
>>>water privatisation plans amid evidence that other public services -
>>>including waste disposal - have suffered after being sold.
>>>
>>>''Clearly, unit costs of providing water must be reduced,''
>>>says Serageldin, who also is a vice president at the World Bank.
>>>
>>>The poor nevertheless manage to find money for water and this
>>>can be parleyed into profits for reputable suppliers, Commission
>>>officials argue.
>>>
>>>''Although conventional wisdom holds that poor people cannot
>>>afford to pay for the household water they need, a survey shows
>>>that both rural and urban poor are willing to pay higher fees in
>>>order to have a reliable and safe water supply,'' says William
>>>Cosgrove, director of the World Water Vision Unit.
>>>
>>>This organisation is drafting public policy guidelines and a list
>>>of private investment opportunities to be adopted next March.
>>>
>>>As it is, poor people pay five times the municipal rate for
>>>water in Abidjan, Cote d'Ivoire; 25 times more in Dhaka,
>>>Bangladesh; and 40 times more in Cairo, Egypt, according to the
>>>World Commission on Water.
>>>
>>>''They are paying so much that they can only afford to buy cups
>>>of water to drink, not 40 litres per day,'' the minimum necessary
>>>to meet basic human needs, says Commission consultant Arienne
>>>Naber.
>>>
>>>Private firms have waded into developing countries' water
>>>markets over the past decade with decidedly mixed results, Naber
>>>acknowledges.
>>>
>>>Many firms have sought out higher-end customers, leaving
>>>government to meet the needs of the poor but ''if governments
>>>provide the right regulatory framework, they can ensure that
>>>services do reach the poor,'' she says.
>>>
>>>Setting the right framework will mean striking a balance
>>>between governments' duty to protect the public interest and
>>>private investors' demands for tax breaks and guarantees that
>>>water prices will not be controlled but allowed to float with the
>>>market.
>>>
>>>Proponents of privatisation say it is necessary because
>>>governments no longer have the money to spend on water
>>>infrastructure and delivery.
>>>
>>>National co-financing of World Bank water projects fell from an
>>>average of 34 percent in the late 1980s to around 10 percent in
>>>the early 1990s, notes Naber, and the difference has had to be
>>>made up with increased private investment.
>>>
>>>Critics, however, say that the need to privatise is a
>>>consequence of misguided government priorities, exacerbated by the
>>>Third World debt crisis.
>>>
>>>Governments have had to spend more on debt servicing and less
>>>on public programmes, says Brendan Martin, author of the 1993 book
>>>'In the Public Interest? Privatisation and Public Sector Reform.'
>>>
>>>''While recession, structural adjustment programmes and other
>>>problems have undermined the ability of local authorities the
>>>world over to provide their communities with well-resourced
>>>integrated public services, a group of transnational companies has
>>>grown up on the strength of running those that can be paid for
>>>privately,'' according to Martin.
>>>
>>>Some firms have made inroads into the developing world thanks
>>>to contracts won under international loans, in return for 'tied
>>>aid' from their governments, and under agreements sealed during
>>>the transition from colonial rule.
>>>
>>>Cote d'Ivoire's urban water, for example, has been supplied by
>>>the local subsidiary of a French company ever since the West
>>>African country won independence in 1960.
>>>
>>>''We will probably never know'' whether direct public provision
>>>would have worked better, says Martin, but the company relied
>>>heavily on public subsidies when the economy soared - and scaled
>>>back rather than forgo profits when falling world commodity
>>>prices hit the country's export earnings.
>>>
>>>''During the 1970s the state was prepared to subsidise water
>>>connections to house owners in poorer areas of the city but the
>>>programme fell off in the early 1980s because of a shortage of
>>>public funds,'' according to Canadian researcher Richard Stren.
>>>
>>>As a result, ''the rate of added connections fell from 8,000 per
>>>year in 1977 to 2,300 in 1982.''
>>>
>>>This happened just as farmers, faced with weak agricultural
>>>prices, flocked to Abidjan in search of jobs. Shanty towns
>>>mushroomed along the city's fringe and a swarm of vendors began
>>>trucking in water and gouging prices.
>>>
>>>If experience in Britain - where water prices and the number
>>>of people disconnected for non-payment both zoomed upwards after
>>>deregulation in the early 1990s - is any indication,
>>>''privatisation of water offers no solution,'' Martin adds.
>>>(END/IPS/aa/mk/99)
>>>
>>>Origin: ROMAWAS/FINANCE/
>>> ----
>>>
>>> [c] 1999, InterPress Third World News Agency (IPS)
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>>>
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>>>
>>>** End of text from cdp:ips.english **
>>>
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>*
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>>>
>>
>>
>
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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