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."

FAIR USE NOTICE. This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. India Resource Center is making this article available in our efforts to advance the understanding of corporate accountability, human rights, labor rights, social and environmental justice issues. We believe that this constitutes a 'fair use' of the copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.




Home | About | How to Use this Site | Sitemap | Privacy Policy

India Resource Center (IRC) is a project of Global Resistance -- "Building Global Links for Justice"
URL: http://www.IndiaResource.org Email:IndiaResource (AT) igc.org