Wednesday, 6 April 2011


Can you imagine a world where 1.5 million children become ill and die each year as a result of lacking drinking water and sanitation? Can you imagine a world where water and sanitation fall into private ownership, a world where water is no longer a basic human right, a world where water is available only at an unaffordable cost? That world is not of the past or future, it is the world in which we live today, and it will become even harsher as the population grows and the poor-rich gap widens, water resources become increasingly scarce, and giant multinational corporations control water and sell it at a premium.

In June 2010, the UN General Assembly voted that water is a basic human right. With the exception of Germany, of the 41 UN members that abstained, almost all of them were industrialized northern hemisphere nations headed by the US and UK that tried to stop the vote from taking place. The reason is that the governments of the 41 abstaining from the UN vote have been behind a World Bank effort to help place water resources throughout the world under the control of large corporations.

If privatizing water were to result in greater conservation and greater availability to more people at a lower cost that would be wonderful. Just the opposite has been the practice of multinationals that control water and sanitation that are vital to survival and health. According to the World Health Organization, in 2005 at least 1.1 billion people had no access to safe drinking water and 2.6 billion lacked basic sanitation, both catalysts to infectious diseases that kill mainly the impoverished and mainly children.

Considering that just one percent of the world's water if fit for human consumption, and given that water use has risen sixfold in the last one hundred years, the potential for profit is immense as the population is rising fastest where water shortages are most acute, namely in Africa and Asia. In just fifteen years, one-third of the world's population will be facing moderate to severe water shortages, including in heavily populated countries like China, India, US, Mexico. 

Among other companies, Coca Cola, Pepsi, Vivendi-Generale des eaux, Suez-Lyonnaise des eaux, Nestle, Danone, International Waters Ltd of London. IWL, a subsidiary if San Francisco-based construction giant Bechtel, and chemical giant Monsanto have been planning for more than a decade to make billions in profits by making certain that water is a private commodity  from which they can make billions in profits throughout the world. In order for the multinational corporations to achieve the goal of securing control of water resources so they can sell at a premium, they need governments to make sure that water is subsidized by taxpayers but is in private hands, and they need public investment in infrastructural development at the taxpayers' cost.

Under the label 'global water crisis', the World Bank is working with various US government agencies and private corporations to help with water and sanitation, aquifers, drought and flooding. Linking water and sanitation to global poverty, the World Bank stresses that at least 2 million death annually are linked to water-sanitation-related illnesses. Besides drinking water and sanitation, the World Bank and 17 US government agencies as well as a number of EU agencies are linking water to agriculture, energy, environment, industrial development and urban planning. All of this is great indeed if the benefits accrued to people and not multinationals owning water and sanitation rights as a means of capital accumulation that results in lack of access to the world's poor. 

If Monsanto is using its considerable reach in everything from agrochemical and seeds to land reclamation and water to corner the market in India, Mexico, and other countries it is doing so for the benefit of its investors and not for farmers and water household users. Monsanto is no more interested in the welfare of Indian and Mexican peasants than Vivendi-Generale des eaux and Suez-Lyonnaise des eaux that together control at least 40% (70% according to some sources) of the world's commercial (privatized) water market in 130 countries cashing in on more than 110 million customers. 

Given that 85% of the world's water utilities are under public control, this is the most lucrative market that is ripe for exploitation; it is a market that governments, the IMF and World Bank are preparing for privatization and a means for capital accumulation. To make certain that privatization of water and sanitation proceed as planned, the World Bank, the International Finance Corporation, and USAID have spent billions of dollars in the last ten years around the world to achieve that goal. 

Contrary to the reports from World Bank, US, and Western governments supporting privatization, will not solve the problem that millions of poor people face regarding clean water and sanitation problems. French-based SAUR, one of the largest water and sanitation companies in the world, admitted to the World Bank in 2002 that private water companies could not meet the needs of the world's poor, given that the investment was too great to be recovered from low-income countries. SAUR demanded government subsidies and soft loans to continue privatization ventures in poor countries. 

How do private companies secure soft loans and government subsidies? They make generous contributions to politicians legally and illegally. Both Suez and Vivendi have already been convicted for corruption in bribery and illegal donations to political parties in connection with projects in central Asia and Latin America. In cases where governments have tried to cancel contracts with multinational corporations, they have found that host governments of the multinational (US, UK, France) working together with the IMF and World Bank apply immense pressure to provide massive compensation. This was the case of Tanzania that canceled the contract of UK-based Biwater that did not do anything to improve the water supply as promised. By court order, Tanzanian taxpayers were required to pay $140 million to Biwater that had provided nothing to improve water services for the nation. Similar cases abound in Asia, Latin America and Africa. 

Water privatization is an integral part of the larger issue of globalization under the neo-liberal model that the multilateral agencies like the World Bank are promoting as the panacea. Water is a way for capital accumulation by Western multinationals seeking to squeeze as much capital as possible using existing natural resources that they intend to continue commercializing. Given that the opportunities for squeezing profits from many poor countries are limited, multinationals with the help of western governments and the World Bank, are focusing on how to commercialize a product that nature freely provides, a product essential for sustaining life.

No comments: