SOUTH AMERICA: Latin Americans blame foreign private firms for providing contaminated water and poor services, writes Monte Reel in Lomas de Zamora, Argentina
Carina Grossi turned on the tap in her kitchen sink and raised a glass of water to the light, her eyes narrowing in disgust.
"Look at that," said Grossi (32). "Look how cloudy the water is, how dirty."
"It's a disaster," said her father, Eduardo (65), a grocer. "That's what is making your mother so sick."
Like many of their neighbours in this working-class suburb of Buenos Aires, the Grossis are convinced their water is contaminated and now use bottled water to make soup and tea. They blame the French company that has provided water and sewerage service since the federal government privatised it in 1993.
Across Latin America, a growing number of people say the privatisation of public services, a movement that swept the region in the 1980s and 1990s, has failed. Protests have erupted over the issue in several countries, and some governments are beginning to reverse these policies. Last week Argentina announced it was rescinding its 30-year contract with the French company Suez and reinstating government control of the water supply.
The Grossis, among many others, have welcomed the decision.
"The trains, the water, the electricity - I say it all needs to come back to national control," Carina Grossi said. In her suburb, authorities estimate, about 30 per cent of homes lack water and the majority are without sewerage facilities. "We pay money out to these foreign companies and get nothing in return," she said. "This is our country. We should stop selling it out to others."
The backlash against the private sector has been building for several years. In some cases, such as Bolivia and Mexico, it has been promoted by grass-roots leaders in tandem with their demands for limiting the influence of foreign interests. In 2000, street protests in the Bolivian city of Cochabamba prompted the state to annul a water contract with Bechtel Corp; last year more demonstrations in El Alto, a city near La Paz, led to the suspension of a contract with a subsidiary of Suez.
In the past year protests against the privatisation of other sectors, including electricity and energy, have taken place in Peru, Ecuador, Guatemala and Mexico. Last week several thousand demonstrators marched through Managua, the Nicaraguan capital, to demand the government improve water services without privatising them.
Last week, representatives from 148 countries gathered in Mexico for the World Water Forum, held every three years to discuss global water supplies. The forum voted to issue a decree stating that governments - not private companies - should hold primary responsibility for providing safe drinking water. Bolivia, Cuba, Venezuela and Uruguay attached a separate statement noting their "profound concern" about the possible negative impacts of international investment deals and free trade.
Some officials and experts who promote the role of the private sector in development of basic services said the swing toward nationalisation seems like a case of collective amnesia: people are forgetting that many state-run utilities were a mess, they say, wracked with debt and in need of bail-outs.
"It would seem that so many years of bad service and very high costs weren't enough to demonstrate that these roads lead to failure," said Adrian Menem, an Argentine congressman and nephew of former president Carlos Menem, who led the privatisation efforts of the 1990s.
President Nestor Kirchner's decision to terminate the French contract and put water in the hands of a new state-run entity is not without precedent. In 2003, he took the nation's postal service out of private hands, and it has since turned a profit.
A desire to replicate that experience in part fuelled the decision on water service, said Nicolas Ducote, an analyst with the Center for the Implementation of Public Policies Promoting Equity and Growth, based in Buenos Aires. But popular politics, he said, was just as important.
"The president knows that it's politically popular to bash the private sector," Mr Ducote said. "That sort of approach focuses only on the short term. Six months down the road, if there is one problem with someone's water, he'll pay a price for this."
Suez officials countered President Kirchner's criticisms of their performance, saying the company improved service despite being handcuffed by the government's mandated price freezes after a national economic collapse in 2001. A spokeswoman said the company invested at least four times more than the previous state-run enterprise did, added more than 3,700 miles of new pipes and provided more than two million new customers with access to drinking water.
The company said Mr Kirchner's claim that it made "hundreds of millions" of dollars in Argentina was wrong; it asserted it lost nearly $900 million on the deal.
The financial markets have taken note as well. In the days after the contract was cut, Argentine stock trading slowed considerably.
- (LA Times - Washington Post)