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Thirst For Profit

article - SchNEWS,  15 August 2003

"How do you feel about your public services? Would you like them to stay public? Or would you prefer it if they were forcibly prised open to foreign corporate competition by way of a new international law? All in the name of trade, of course." - Paul Kingsnorth, The Ecologist.

Modalities. Appellate bodies. Singapore issues. Single undertakings. Come again? Welcome to the dictionary of the World Trade Organisation (WTO) who've been busy inventing their own language to bore us all into submission and pull the wool over our eyes so we just don't see their plans for the corporate carve up of the planet. Last weekend nearly 200,000 people in France saw through this fog of language and took part in a weekend rally against the WTO, whose fifth ministerial meeting in Cancun, Mexico is less than a month away.

For the past few years, the WTO have been trying to expand its snappily titled General Agreement on Trades in Services (or GATS - see SchNEWS 286), whose "privatise everything!" small print is a wet dream for corporations. The EU is using GATS to target everything from public healthcare, welfare, water, energy and transport networks in the developing world as its new golden goose. Its 109 'requests' for developing countries was a strictly classified document that got leaked onto the web. But why do they want to keep it a secret?

One of those requests from the EU is that 72 developing countries make commitments to open up their water supplies to competition.

The effects of this would be disastrous for the world's poor. Take Brazil for example. In Porto Allegre, the local water company DMAE is publicly owned, and financially independent from state control thanks to water bills paid by the 1.4 million city inhabitants. All profits are re-invested in the water supply, and through public meetings, everyone can have their say in what they think should be priority. This participatory model has been a massive success. 99.5% of the city's population now have access to clean water - the highest rate in Brazil. Overall consumption has gone down while the water rates are some of the lowest in the country. But under GATS if the Brazilian government imposed legal requirements for all water companies to act like DMAE it would be a 'barrier to trade' and illegal.

In the Bangladeshi capital of Dhaka, a proposed privatisation was strongly opposed by the water workers' union, so the Dhaka Water Authority contracted out one zone to the union, while another zone was given to a private water company for a year's trial. The union co-operative's results were so much better that they won the contract. Many more people now have access to running water and there has been a sizable reduction in water losses. But should the Government of Bangladesh give in to the EU's request then if any of their policies tried to expand the cooperative model they would likely to be in violation of GATS rules.

The city of Santa Cruz in Bolivia boasts one of the best-run water companies in Latin America and the only not-for-profit co-op in the world responsible for water supply and sanitation in a major urban centre. The EU is requesting that Bolivia put its water supplies under GATS rules. Should they agree then the promotion and implementation of these alternative models elsewhere in Bolivia would be illegal.

In Panama strikes and demonstrations in 1998 forced the then president to back down on plans to privatise the national water company and in Trinidad the UK water company Severn Trent, were kicked out of the country after 5 years after they'd put prices up while providing a worsening service.

The Bolivian mountain city of Cochabamba was also the setting for an epic struggle for control of the water supply in early 2000. Thousands protested at the sell-off of the city's water system to the US multinational Bechtel, who raised water bills by up to 300 per cent and required people to get a permit to collect rainwater in rooftop tanks. Eventually massive protests drove the corporation out and led to the water system being taken back into public ownership - an unprecedented reversal of a major privatisation.

So what would happen now if the Bolivian government decides to open up all its water services to corporate competition? Well the WTO has learnt that whenever governments try to sell off essential services they have faced mass protests. So they've come up with the GATS trump card - that once a service has been 'liberalised' (that's WTO talk for privatisation) there's no going back. As the WTO website once put it, GATS helps to "overcome domestic resistance to change." Which means even if there is massive protests or a government wants to take back control from a failing private company, it won't be able to unless it is ready to face the trade sanction consequences.

Clare Joy from the World Development Movement says "The record of water liberalisation and privatisation around the world has been a disaster. Many developing countries and impoverished communities have rejected the idea of providing water for profit yet the European members of the G8 are pushing them into a trade agreement, lobbied for by business and negotiated in secret, that will lock in liberalisation regardless of the cost to the poor and vulnerable."

Or as Paul Kingsnorth puts it "This is the story of Cancun - the story of a continuing power grab by private corporations operating under the fig leaf of the World Trade Organisation; a global colonisation of pretty much everything by profit-seeking private interests. And this is the key thing to grasp: this is not about 'trade' at all; it's about power and who gets it. Governments or corporations? Ordinary people or profiteers? The answers to those questions will affect all of our lives."

Time we started reminding them of the language of the street protest.

* Join the protests to derail the talks -

* Decode the gobbledegook - the World Development Movement has loads of excellent resources on GATS 0207 2747630 -


NOTE - Why is the European Union so keen to get its hands on other countries water supplies? 70% of the world's private water supplies are owned by just two French companies Vivendi and Suez. The third largest is Thames Water, now part of German utilities conglomerate RWE.

- SchNEWS  (15 August 2003)

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revised 18 November 2005