Water and the G8

On May 24 the government of Tanzania cancelled a contract with the commercial water giant Biwater, which was supposed to bring clean water to the country’s largest city Dar es Salaam, and establish a privatised water supply.  The UK-based company had won a £76.5 million contract from the World Bank, with the support of the British government’s Department for International Development (DfID).  DiFID had paid the free-market thinktank £0.5 million in fees to advise the Tanzanian government and promote privatisation, out of a total expenditure of more that £36 million since 1998 for similar consultancies.  In two years Biwater has failed to install a single pipe (Vidal, J. 2005.  Flagship water privatisation fails in Tanzania.  The Guardian 25 May 2005, p. 4).

In her statement to the International Conference on Water and Sustainable Development in Paris (March 1998) Clare Short (British minister then heading DfID) outlined the New Labour government’s “vision” on water resources in the Third World, “Partnerships among governments, the private sector and civil society are critical to sustainable development [of water resources]”.  Policy of the International Monetary Fund is to enforce “structural adjustment programmes” on poorer countries as a condition for rescheduling debt repayments. Into these are written the privatisation of formerly public assets, such as water utilities. The first targets for this in Africa were the townships of South Africa, following the removal of apartheid.  Although very poor by western standards, and with unemployment running at up to 50%, people in South African townships are better off than the majority of sub-Saharan Africans.  Potential profits from water metering seemed attractive.  However, a great many people found themselves cut off from this most basic necessity in 2000, being unable to pay the increased water rates.  This led to nationwide protests, the most violent being in the arid Transvaal.  The company involved in that region was also Biwater, with bids for contracts worth 12 billion rand.  The company has an interesting history, having been an early beneficiary of the Conservative government’s “aid for trade” programme in the 1980s, including dam and water distribution contracts in Malaysia and Thailand that were linked to British arms supplies to the governments involved.

Water privatisation is a target outside Africa, perhaps the most notorious case being in South America. Bolivian trades unionists demonstrated on 6 April 2000 against a 35% rise in water prices imposed on the city of Cochabamba.  Military forces opened fire, killing 6 demonstrators, and a state of siege was declared by the authorities. The price hike stemmed from the new owner of the region’s water system – International Waters Ltd (IWL) of London, a subsidiary of Bechtel, based in San Francisco.  IWL’s Bolivian operation centres on the Misicuni dam project.  Water from the dam will cost 6 times more than it would from alternative sources.  The increased water charges were to recover the cost of the dam, with one problem: the dam had not been built, and IWL/Bechtel had put no funds into the construction project.  Subsequently, public pressure forced the ending of the contract.  Similar upheavals have been seen in Ghana, Trinidad, Argentina and the Phillipines.

News of Tanzania’s decision to end the ill-fated contract with Biwater followed announcements in the same week that the EU would effectively double its Third World aid.  In early July, Britain will host the 2005 G8 summit, which will be dominated by discussion of ways to increase the flow of finance into Africa in particular.  This follows the publication in early 2005 of the Commission for Africa Report sponsored by the New Labour government. Two thirds of the world’s population lacks sanitation that is adequate for healthy living.  Of them, one billion people, including the majority of Africans, have no access to safe drinking water.  Poor water supplies form the main contributor to the death of children under five years old.  For hundreds of millions of people, getting water for domestic use consumes much of their daily labour, which involves mainly women and children trudging to distant water sources and carrying it home, on average twice each day.  The failure of private enterprise to deliver water to the needy suggests that the small print of any declaration from the G8 summit needs the most careful scrutiny.

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