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Home--News
Poor Still Paying Private Companies for Water
Mark Stevenson
Associated Press
March 22, 2006
MEXICO CITY - Violent protests have driven away corporate investment
in desperately needed municipal water systems in developing nations.
So the world's poor buy bottled water from Coke, Pepsi and other multinational
companies.
"Water is not for sale," demonstrators chanted at the World Water
Forum this week. But they couldn't be more wrong - private companies
make much more money selling bottled water than they ever did developing
public water systems. Companies also stand to benefit from a renewed
push for big dams in the Third World.
So even though just about everybody, from CEOs to aid workers, spoke
out against the privatization of water, the apparent victory for anti-corporate
forces may prove hollow.
"Nobody is talking about privatizing a resource," said Mexico's Environment
Secretary Jose Luis Luege. "That is something inalienable, sovereign."
It's also become big business.
Multinationals - Pepsi, Cadbury, Nestle, Danone and Coca-Cola - supply
most of the bottled water in Mexico, now the world's second-largest
consumer.
Sales of bottled water in China jumped by more than 250 percent between
1999 and 2004. They tripled in India and almost doubled in Indonesia,
according to a study released by the Earth Policy Institute, a Washington-based
environmental group.
Worldwide, the industry is now worth about $100 billion per year.
In the 1990s, private firms jumped into the water business by gobbling
up public water systems and raising rates, sparking violent protests.
Private water management companies are now leery to invest in municipal
systems.
That's especially true in Bolivia, where demonstrations in 2004 in
the slum city of El Alto, outside La Paz, forced a subsidiary of French
Suez Corp. to cancel a contract to provide water to the slum city.
The leader of those protests, Abel Mamani, was recently appointed
Bolivia's water minister. Gerard Payen, who heads an association of
private water companies, said firms are more cautious after being
used as scapegoats by local authorities, who have called them in after
rate increases were already in the works.
Companies also are going after big moneymaking projects to make their
efforts worthwhile.
Activists say corporate interests - combined with an aggressive lobbying
campaign by the World Bank - are pushing developing countries to build
big dams and hydroelectric projects.
Thus Bechtel - forced out of public water management in Bolivia -
stands to make much more money building dams. The company might be
one of the bidders for the La Parota project near the Mexican Pacific
resort of Acapulco.
"There is a huge amount of money there, about $1 billion, and of course
the corporate interests are very much involved," said Patrick McCully,
director of the International River Network, an environmental group.
Despite strong opposition in some towns near the proposed dam, the
La Parota project is scheduled to start construction by 2007.
The push for dams is on. Hardly a presentation went by at the summit
without the World Bank touting its campaign for a "minimum platform
of water infrastructure" for every country.
Bank officials invoked a powerful, if frightening, argument: Climate
change and global warming are going to make dams necessary for flood
control and drought protection.
Noting the growing unpredictability of rainfall and rivers in Africa,
Jamal Shagir, the World Bank's director of water and energy, said
"investment in hydroelectric infrastructure is not a choice anymore
for Africa. It is a must."
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