Switzerland finances controversial water privatisation fund
In June 2006, Norway will be withdrawing from an international fund that actively promotes the privatisation of water supplies in developing countries. Switzerland, in contrast, will continue to finance that fund until mid-2008 at least. - Article published in: Alliance Sud News, No 51, April 2006.
The fund is known as the Public-Private Infrastructure Advisory Facility (PPIAF). It was set up in 1999 and is managed by the World Bank. Primarily it finances experts who advise governments in developing countries on the implementation of privatisation programmes, above all in the areas of water supply and sewerage disposal. Up to mid-2006, the fund had received altogether $120 million.
In February, the Norwegian Ministry of Development announced that it would cease contributing to this fund as of the middle of the year, since it was not an effective means of improving access to drinking water for the poor. Before Norway, four other countries as well as the United Nations Development Programme (UNDP) and the Asian Development Bank had withdrawn from the Fund. It still receives contributions only from six countries, the European Commission and the World Bank. The Fund is surviving thanks to the United Kingdom, which supplies over half its funding. Up to now, Switzerland has paid in some CHF 16 million and has a seat on the Directorate.
In a study entitled «Down the Drain», the British NGO World Development Movement (WDM) launched a stinging attack on the Fund last autumn for being devoted exclusively to privatisation. In addition to the advisory services, the study also criticised the funding of «consensus-building activities», designed to convince reluctant governments and parliamentarians as well as populations of the virtues of privatisation. The study recommended that the PPIAF should withdraw completely from the water supply and sewerage sectors and cease all consensus-building activities. Instead, a fund should be created to improve public supplies.
Since 1999, the fund has sponsored private sector participation in water and sewage projects in 37 developing countries. In at least 17 of those countries, the donors tied their aid to the privatisation of water supplies, the study notes. Altogether, the fund has financed «consensus building» in 16 countries.
Michèle Laubscher, Alliance Sud
