Stop the sale of the world's water!
US Congress Representative Jan Schakowsky is circulating the following letter to US Treasury Secretary O'Neill urging that he instruct the US Executive Directors of the World Bank and the IMF to oppose the water privatisation project in Ghana. The Honourable Paul O'Neill Secretary United States Department of Treasury 1500 Pennsylvania Ave., NW Washington D.C. 20220 Dear Secretary O'Neill: We are writing to urge you to instruct the US Executive Directors of the IMF and World Bank to oppose the current "Private Sector Participation" (PSP) 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 US 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 privatisation. 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 privatisation proposal is implemented. Tariff increases are borne unequally by poor populations 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 percent and 20 percent 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 organisations, including teachers, doctors, nurses, trade unions, women's and human rights organisations, NGOs, students and others have stated their opposition to the World Bank-backed PSP proposal and delivered a memorandum to this effect to their government. Eminent individuals from renowned organisations 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 privatisation via 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 privatisation 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 organisations, 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 US Executive Directors to oppose the World Bank's water privatisation 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.
* * *Public Citizen's Water for All campaign at http://www.citizen.org/cmep/water