[stop-imf] US Action Alert: Stop Water Privatization in Ghana and Nicaragua
rob@essential.org
rob@essential.org
Tue, 26 Nov 2002 14:14:52 -0500 (EST)
>From Water for All Campaign, Public Citizen, www.citizen.org/cmep/water
ACTION ALERT (PLEASE POST!)
STOP THE SALE OF THE WORLD'S WATER!
SUPPORT THE STRUGGLES IN GHANA AND NICARAGUA!
CALL YOUR MEMBER OF CONGRESS TODAY TO URGE THEM TO SIGN THE LETTERS
BELOW.
Ghana: In the U.S. Congress, Representative Schakowsky is circulating a
letter to U.S. Treasury Secretary O'Neill urging that he instruct the
U.S. Executive Directors of the World Bank and the IMF to oppose the
water privatization project in Ghana. The full text of the letter can
be found below.
Nicaragua: Also in the U.S. Congress, Representative Kucinich is
circulating a letter to the president of the Nicaraguan National
Assembly supporting the groundbreaking legislation to suspend all
private concessions involving water that was passed unanimously in the
Nicaraguan National Assembly on August 22, 2002.
(Both letters are attached below)
Please Call Your Member of Congress today [U.S. Capitol Switchboard
-202-224-3121] and ask them to sign the letters from Representative
Schakowsky and Representative Kucinich on stopping water privatization.
CLOSING DATE NOVEMBER 27, 2002.
For more on water privatization in Nicaragua and Ghana visit Public
Citizen's Water for All campaign at www.citizen.org/cmep/water
Below are copies of the letters.
CLEAN WATER FOR GHANA
November 18, 2002
Dear Colleague:
I encourage you to join me in writing to Treasury Secretary
Paul
O'Neill, urging that he instruct the U.S. Directors of the IMF and World
Bank to oppose the "Private Sector Participation" plan currently being
promoted in Ghana. If adopted, the plan would continue to increase the
cost of water, making it unaffordable for many people in Ghana.
Presently, conditions attached to IMF and World Bank loans in Ghana
require the government to increase water fees. Increased cost recovery
is often part of the regulatory reform imposed by the World Bank prior
to water privatization. In May 2001, a 95 percent tariff increase was
implemented, followed by another 40 percent increase in August of 2002.
Now the IMF and World Bank are considering making privatization a
condition of future loans. This would be disaster for the people of
Ghana.
Most Ghanaians earn less than $2 a day and the rising cost of water
forces families to make impossible trade-offs between purchasing food,
clothing, medicine, paying school fees, or buying a bucket of water.
Increased water costs have forced many Ghanaians to drink water from
unsanitary sources. This has led to an increase in water borne
diseases.
Recently, Secretary O'Neill stated that "people are inspired by great
goals. A great goal would be for all of the people to have clean
water-and soon." Unfortunately some IMF and World Bank policies
prevent us from obtaining that important goal.
We must take action to ensure the World Bank and IMF provides clean,
affordable water to the people of Ghana. For more information or to add
your name to the attached letter, please contact please contact Josh
Nassar (Rep. Schakowsky) at 5-2111.
Sincerely,
JAN SCHAKOWSKY,
Member of Congress
November 26, 2002
The Honorable Paul O'Neill
Secretary
United States Department of Treasury
1500 Pennsylvania Ave., N.W.
Washington D.C. 20220
Dear Secretary O'Neill:
We are writing to urge you to instruct the U.S. Executive Directors of
the IMF and World Bank to oppose the current "Private Sector
Participation" proposal being promoted for the urban water sector in
Ghana. The plan is opposed by a broad coalition of Ghanaians because it
would increase the cost of water for the people of Ghana. We also urge
you to instruct the U.S. Executive Directors to oppose loan conditions
in Ghana mandating increased cost recovery for water. These conditions
have already raised the price of water for the poor in Ghana. Ghana
should receive loans that do not have onerous conditions.
Mr. Secretary, on October 8 at the Global Millennium Water Initiative
Symposium you stated that "water is life. Nothing is as essential- or
as fundamental to us-as water." You went onto state it is a goal of
yours to ensure that all people have clean water. We share your goal
and we commend your efforts to increase access to clean and affordable
water around the world. Unfortunately we believe that IMF and World
Banks policies in Ghana have in fact, been counter productive to that
goal. Clean and affordable water is becoming less accessible for the
vast majority of Ghanaians.
Increased cost recovery is often part of the regulatory reform
imposed by the World Bank prior to water privatization. Most Ghanaians
earn less than $2 a day and the rising cost of water forces families to
make impossible trade-offs between purchasing food, clothing, medicine,
paying school fees, or buying a bucket of water. Conditions attached to
IMF and World Bank loans in May 2001 required a 95 percent increase in
water tariffs in Ghana. Another 40 percent tariff increase was imposed
in August 2002 and other tariff increases are likely before and after
the privatization proposal is implemented.
Tariff increases are borne unequally by poor population because their
relatively smaller incomes already go disproportionately to pay for
water and because they are often outside the piped system. For those
without piped water, tariff increases are magnified as they are passed
on by the tanker truck operators and other intermediary buyers and
sellers. Purchasing three buckets of water a day in Ghana can cost
between 10% and 20% of the average daily income. World Bank policies of
increased cost recovery for water are removing much-needed income from
the pockets of the poor. This contradicts the poverty reduction mandate
of the institution.
A broad coalition of Ghanaian organizations, including teachers,
doctors, nurses, trade unions, women's and human rights organizations,
NGOs, students and others have stated their opposition to the World
Bank-backed "private sector participation" proposal and delivered a
memorandum to this effect to their government. Eminent individuals from
renowned organizations in Ghana -- the Christian Council, the Trade
Union Congress, the Civil Society Council of Ghana, the Ghana Catholic
Bishop's Council and the African Association of Universities -- invited
an international delegation to study the proposal for privatization or
private sector participation (PSP) in the restructuring of the water
sector. The report of the International Fact-Finding Mission on Water
Sector Reform in Ghana found serious shortcomings in the privatization
proposal and concluded that other options should be sought. The key
shortcomings identified are:
? increased cost recovery will reduce access by low-income consumers; ?
proposed investment priorities and lack of capital are likely to make
significant expansion to low-income and unserved areas unlikely;
? the separation of water and sanitation services reduces opportunities
to address public health problems;
? there is no attempt to address the excessive prices borne by those
dependent on tanker trucks;
? there is no plan for ensuring access to low-income consumers;
? the lease formula may encourage transfer pricing which could lead to
higher consumer prices;
? IMF loan conditions, in particular the recommended implementation of
an automatic tariff adjustment mechanism, interfere with an independent
regulatory function; and
? the great majority of citizens and civil society organizations, who
will be directly affected by the PSP proposal, were unaware of its basic
components and were not involved in the decision-making process.
Again, we urge you to take immediate action to instruct U.S. Executive
Directors to oppose the World Bank's water privatization proposal in
Ghana and to oppose loan conditions promoting increased cost recovery
for water. Access to water is a basic human right and should not be
denied to people simply because they are poor.
Support Water Anti-Privatization Efforts in Nicaragua
Dear Colleague:
I encourage you to join me in sending a letter to the Nicaraguan
National Assembly to support the recently passed legislation against the
privatization of water resources. Members of the National Assembly
unanimously approved the Law of Suspension of Concessions of Water Use.
This is the first legislation to halt all water privatization that was
passed in the Americas.
Many of the same global water companies that operate in Latin America
are now seeking access to new markets in the United States. Many of our
state and local public officials are also facing pressures to privatize
our municipal water systems. The experience with the de-regulation of
electricity markets and the skyrocketing electricity rates in
California
have led many citizens to oppose the trend toward water privatization
in the U.S. In areas that have already been privatized, such as
Atlanta, Lexington, and Charleston, citizens have voiced grave concerns
over water quality, local accountability, and rate increases. As we
seek to address this issue here, we should stand together in our
opposition to water privatization and express our support for the
efforts in Nicaragua.
Please join with me in congratulating the Nicaraguan National Assembly
by signing the following letter. Please do not hesitate to contact me or
Allison Murphy of my staff to sign on or ask any questions (55871).
Sincerely,
Dennis J. Kucinich
Member of Congress
LETTER TO NICARAGUA'S NATIONAL ASSEMBLY
The Honorable Jaime Cuedra Somarriba
President
National Assembly
Managua, Nicaragua
Dear President Somarriba and Members of the National Assembly:
As members of the U.S. House of Representatives, we write to
demonstrate
our support for your recent ground breaking legislation to suspend all
private concessions involving water use until a general water resource
management law can be created. We understand that all 92 members of the
National Assembly supported this law to suspend the privatization of
water. This is an important step toward protecting this most valuable
of all resources as a public trust for future generations.
As fellow legislators, we recognize that you are tasked with
representing the people of Nicaragua, who have demonstrated staunch
opposition to further privatization of public services, including
water.
We applaud your decision to allow time for a full, public debate over
water management in Nicaragua, rather than rushing to embrace
privatization measures.
The vote in the Nicaraguan National Assembly earlier this year to
support the suspension of water privatization sets an important
precedent in all of the Americas. We hope that as you consider this
issue again, your vote will not be undermined by pressures from
international financial institutions such as the International
Monetary
Fund, the World Bank, or the Inter-American Development Bank. We are
concerned that many loan agreements with these institutions contain
conditions that
require the privatization of water and hydroelectric resources. We will
be looking into this issue through discussions with the U.S. executive
directors to the International Monetary Fund, World Bank, and
International Development Bank. We send our strong support and
encouragement for your courageous and firm stand behind your original
vote.
Many of the same global water companies that operate in Latin America
are now seeking access to new markets in the United States. As we seek
to address this issue here, we express our support for your efforts in
Nicaragua. We must stand together to oppose the transfer of water to
private hands against the will of the citizens we represent. It is our
public duty.
We are encouraged by your example, and wish you success.
Sincerely,
Sara Grusky
International Water Working Group
Water for All Campaign
Public Citizen
Phone: (202) 454-5133
Website: www.citizen.org/cmep/water