WASHINGTON,
D.C. – U.S. Representative Jan Schakowsky (D-IL) today called on the Bush
Administration to oppose water privatization proposals that would increase
the cost of water for the people of Ghana.
In
a letter to Secretary of the Treasury Paul O’Neill, Schakowsky urged the
Secretary “…[t]o 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.”
The
letter, which was organized by Schakowsky and signed by thirty seven members
of congress, continued, “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.”
They
concluded, “Access to water is a basic human right and should not be
denied to people simply because they are poor.”
Members
of Congress signing the letter are Schakowsky, Dennis Kucinich, Joseph
Crowley, Elijah Cummings, William Delahunt, Lane Evans, Luis Gutierrez,
Alcee Hastings, Maurice Hinchey, Tammy Baldwin, Barbara Lee, James McGovern,
Cynthia McKinney, Juanita Millender-McDonald, Major Owens, Charles Rangel,
Bernard Sanders, Robert Scott, Edolphus Towns, Maxine Waters, Jerrold Nadler,
Eleanor Holmes Norton, Jim McDermott, Donald Payne, Bob Filner, Lynn Woolsey,
Stephanie Tubbs-Jones, Henry Waxman, Edward Markey, Peter DeFazio, Louise
McIntosh Slaughter, Bart Stupak, Donna M. Christian-Christensen, Michael
M. Honda, Jerry F. Costello, Sherrod Brown, and Albert Wynn.
Below
is the full text of the letter to Secretary O’Neill.
December
2, 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 on to 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 Bank policies
in Ghana have in fact, been counterproductive 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 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% 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.
Sincerely,
37
members of Congress
Jan
Schakowsky, Dennis Kucinich, Joseph Crowley, Elijah Cummings, William Delahunt,
Lane Evans, Luis Gutierrez, Alcee Hastings, Maurice Hinchey, Tammy Baldwin,
Barbara Lee, James McGovern, Cynthia McKinney, Juanita Millender-McDonald,
Major Owens, Charles Rangel, Bernard Sanders, Robert Scott, Edolphus Towns,
Maxine Waters, Jerrold Nadler, Eleanor Holmes Norton, Jim McDermott, Donald
Payne, Bob Filner, Lynn Woolsey, Stephanie Tubbs-Jones, Henry Waxman, Edward
Markey, Peter DeFazio, Louise McIntosh Slaughter, Bart Stupak, Donna M.
Christian-Christensen, Michael M. Honda, Jerry F. Costello, Sherrod Brown,
and Albert Wynn. |