The Rage of Blue Gold

The Rage of Blue Gold

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By Tony Clarke and Maude Barlow

Suddenly water has become a very precious commodity in world markets. Just as oil has become the "black gold" of the 20th century, water is destined to become the "blue gold" of the 21st century.

The challenge facing the privatization of water systems in Latin America

We often drink a glass of water with little regard for the value of this resource. However, according to recent estimates by the United Nations, there are 1,300 million people on the planet who lack adequate access to drinking water, and 2,500 do not enjoy an adequate sanitation system. Throughout the world, there are human beings who risk their lives in armed conflicts due to the problem of access to fresh water. Although these struggles are not new, as water has always been an essential element for life and nature on the planet, they intensify as water becomes an increasingly scarce and lucrative resource. As the former vice president of the World Bank anticipated in the late 1990s, "The wars of the 21st century will be fought over water."

The water battles

One of the most conflictive points in the battles for water is Latin America. In fact, the first great water war of the 21st century broke out in Bolivia when the World Bank demanded, for the renewal of a loan of 25 million dollars, the condition that the water services of the poorest country in Latin America be privatized. As soon as Cochabamba's municipal running water service [with a population of over 500,000] was sold to Bechtel, a powerful US company, the price of water rose dramatically in January and February 2000. Tens of thousands of residents They took to the streets of Cochabamba to express their dissatisfaction with the increase in prices and the consequent supply cuts. Ultimately, the escalating protests led to a general strike that paralyzed the city's economy, forcing Bechtel to pack up and flee the country. But not for much longer. The large corporation returned again with a lawsuit for 25 million dollars against the Bolivian government, which required the payment of compensation for loss of profits.

In other areas of the Spanish-speaking domain, tough battles over water have been fought on other fronts, especially in certain regions of Latin America.

- In Argentina, consumer associations and other groups have fought for a decade against the privatization of the public running water network by the French business giant Suez, which has generated a process of widespread corruption, in addition to the contamination of the Rio de La Plata and unprecedented benefits. Suez has recently threatened to renounce its 30-year water supply contract to Buenos Aires, unless protection against currency rate fluctuations is guaranteed, which has reduced the company's profit margins.

- In Uruguay, a coalition of workers and associations has promoted a national referendum in order to achieve a constitutional amendment that guarantees water as a human right and a public good, beyond the reach of large profit-making companies. When a subsidiary company of the Spanish water company Aguas de Bilbao was awarded the concession to supply water for profit in Maldonado province, water prices rose and supplies became contaminated.

- In Chile, environmental groups have vigorously protested the sale of river systems. During the Pinochet regime, 80% of the rivers were sold to the private sector in order to facilitate the use of water for energy production and agricultural consumption. The Spanish company ENDESA has acquired a large part of Chile's river systems for mainly hydroelectric developments.

- In Peru, citizens of the poorest areas have waged an armed struggle against abusive water prices. In Lima, the poor pay a private seller up to three dollars per cubic meter of water, a supply that they must collect and transport in buckets on their own and which often contains contaminated water. The more affluent citizens, on the other hand, pay 30 cents per cubic meter of treated water that comes out of the tap in their homes.

- In Guatemala, local peasants, workers and environmentalists protest against the construction of 5 dams on the Usumacinta River, which runs through much of the Guatemalan and southern Mexican territory. In addition to hydroelectric generation, the project will be used to pump water from Usumacinta to the Yucatan peninsula, in order to provide irrigation to agricultural macro-crops destined for export, a process that has already damaged most of Guatemala's riparian system. The flooding of the land also poses a threat to the livelihood of the local population.

- In Mexico, the indigenous population of the state of Chiapas, in the extreme south, is preparing to wage a battle against Coca-Cola, a company that tries to secure control of the most important water reserves in the country. In a country where most of the population suffers from water shortages, more than 30% of fresh water supplies are found precisely in the Chiapas region, where the multinational Coca-Cola has positioned itself to control local aquifers, putting pressure on local governments to use preferential zoning laws to increase private control over springs.

Water crisis

Underlying these local battles lies an increasingly acute global water crisis. Currently, 31 countries suffer from severe water shortages. In less than a quarter of a century, it is estimated that two-thirds of the world's population will not have adequate access to freshwater supplies. Furthermore, the world is increasingly divided between "rich" and "poor" regions when it comes to water resources.

This is, in fact, the paradox that characterizes much of Latin America today. On the one hand, Latin America enjoys a great abundance of freshwater springs. 20% of the world's liquid waste - the renewable water source that makes up our freshwater supplies? it comes only from the Amazon basin. Brazil has more water than any other country, since it has a fifth of the planet's water resources. The Latin American territory is home to four of the 25 largest rivers in the world? Amazonas, Paraná, Orinoco and Magdalena ?, in addition to some of the largest lakes, among which are the Maracaibo in Venezuela, the Titicaca in Peru and Bolivia, the Poopó in Bolivia, and Buenos Aires, shared by Chile and Argentina. Consequently, Latin Americans should have one of the highest per capita freshwater allocations in the world, just under 3,100 cubic meters per person per year.

But on the other hand, some areas of Latin America suffer from such a severe drought that approximately 25% of the continent is considered arid or semi-arid. This includes not only natural deserts such as Patagonia, in southern Argentina, or Atacama in northeastern Chile, but also other man-made deserts in large areas of Peru, Bolivia and northwestern Argentina. Further north, the Caribbean lacks freshwater springs, since rivers cannot flow through its meager territories. In most of the Valley of Mexico, natural deserts now merge with man-made ones. Indeed, Mexico City, once surrounded by lakes, is depleting its last accessible aquifers. Indeed, the average citizen can only access 28.5 cubic meters per year, less than 1% of the 3,100 that each person should have per year.

Here is the Latin American paradox: the scarcity of water in a land with important natural aquatic resources. More than 130 million people lack safe drinking water in their homes, and it is estimated that only one person in six has adequate sanitation networks. The Brazilian city of São Paulo, despite belonging to the country with the most freshwater springs in the world, faces a serious threat of rationing, since its water supply depends on sources that are increasingly distant from the city, and the cost of transport exceeds the purchasing power of many inhabitants. Furthermore, the situation is constantly worsening, as policy measures that promote industrial agriculture displace millions of small-scale farmers each year to the peripheral neighborhoods of cities.

At the same time, Latin American freshwater resources also suffer from constant pollution problems. Across the region, river and lake basins and aquatic habitats are often turned into garbage containers, mine drains, or dumps for agricultural and industrial waste. Most of the wastewater discharges directly into rivers, lakes or canals without treatment of any kind. In the maquiladora zones of the US-Mexico border, industrial pollution is so pernicious, and clean water becomes so scarce, that babies and children drink Coca-Cola or Pepsi instead of water. Paradoxically, the most polluting country in the region is Brazil, which is also the one that holds the record for the greatest freshwater resources. Brazil allows massive chemical and industrial pollution, as well as mercury spills from gold mines. Only a part of Eastern Europe and China exceed the water pollution levels of Brazil.

In parallel, the global demand for fresh water doubles every 20 years, that is, at a rate more than twice the rate of population growth. In many parts of the world today, the biggest wasters of water are high-tech industries and industrial agriculture, not individual households. Agricultural irrigation systems consume around 65% -70% of the water, mainly to produce food for export; 20% -25% is dedicated to industrial purposes, including the production of high-tech silicon chips; and the remaining 10% is for domestic use. If these trends continue, by 2025 the demand for water will exceed land resources by 56%.

Scientists warn that a serious threat of crisis looms over the planet's hydrological cycle. This cycle regulates that each drop of water that evaporates from a plant, lake, swamp, river or from the earth's surface falls back onto forests, lakes, pastures, meadows, thus contributing to the natural balance. But if that drop falls on a sidewalk or a building, it is not absorbed by the ground and, therefore, does not reach the sea. As the land surface is stripped of forests and grasslands, the greater the number of springs and streams that are depleted and the less precipitation that dumps on the river basin.

If the human species continues to expand its cities and industries at the current rate, the threat to the terrestrial hydrological cycle can be expected to intensify to the point where water is no longer a renewable resource. Mexico City, for example, already depends on aquifers for 70% of its water supply and is wasting these underground sources at a rate 80 times faster than their natural recovery.

The water magnates

Suddenly water has become a very precious commodity in world markets. Just as oil has become the "black gold" of the 20th century, water is destined to become the "blue gold" of the 21st century. In a climate in which the progressive scarcity of water is associated with an increasing demand for this resource, its market value has doubled or even tripled. As a result, investment speculators have sought to acquire water rights in agricultural areas, in order to sell them to thirsty cities. A new class of "water hunter" entrepreneurs has thus emerged, exploiting the planet's fresh water resources and selling them to the highest bidder.

In the midst of this "blue gold" rush, a new global water industry has emerged, worth, according to World Bank estimates, one trillion US dollars a year in 2001. Among the leading magnates in this burgeoning sector are for-profit corporations that offer water services or sell bottled water.

In order to take advantage of the water crisis in Latin America, numerous European private water service companies have decided to take over public water supply operations in most countries in the region, including Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, Peru and Uruguay. Although some companies, such as Aguas de Barcelona and Aguas de Bilbao, have contracts with the municipalities, most of the companies that intervene in Latin America are local subsidiaries of the three main water service corporations: the French Suez and Vivendi and the German RWE -Thames. Together, these three companies provide piped water and sanitation services to 300 million customers in more than 130 countries.

A decade ago, the Big Three group served just 51 million people in just 12 countries. Suez and Vivendi now control more than 70% of the water supply market worldwide. Their income has increased at the same rate as their development. Vivendi made more than $ 12 billion in profits in 2002, up from $ 5 billion a decade ago. All three are among the world's 100 companies with a combined annual revenue of nearly $ 160 billion in 2002, and an annual growth rate of 10%, which exceeds many national economies in which they operate. However, the history of the services they have provided so far, especially in the developing countries of the south of the planet, is both murky and well documented: secret contracts, increased rates, inefficiency of the service, cuts of the supply [for non-payers], poor water quality, cases of bribery and corruption, and very wide profit margins.

The World Bank and the Inter-American Development Bank (IDB) often facilitate the aggressive entry of these companies into Latin American markets. Both Suez and Vivendi draw on their considerable influence among multilateral lenders to make private water supply a 'condition' of debt forgiveness or new loans. The IDB is the creditor of some 58 billion debt in the region, which gives it tremendous power to impose the privatization of water on desperate municipalities. In fact, some of the largest IDB loans in the past decade went directly to multinational water companies to take over private water concessions in countries like Argentina, Bolivia, and Honduras.

In parallel, after a series of private sector failures in developing countries, the big three water companies are now demanding guaranteed financing to insulate themselves from currency fluctuations before investing in southern countries. As a result, the World Bank has decided to triple its annual funding commitments for water privatization. Furthermore, now that the government has privatized its water services, it cannot cede them into public hands without running the risk of economic sanctions, according to the rules of the World Trade Organization, or that some water service company intervenes. a claim against you, under some other international trade or investment standard.

Another group of water moguls are the masters of the bottled water industry. Today, this sector is one of the most buoyant and least regulated in the world. In the 1970s, the annual volume of water bottled and marketed around the world was 1 billion liters. But before the year 2000 the annual sales of bottled water amounted to 84,000 million liters, of which 25% is sold and consumed outside the country of origin. Although bottled water offers essential guarantees in many areas of the world, it is also one of the biggest shenanigans in our daily lives, selling at least for an average price that is 1,100 times higher than tap water.

All analyzes agree that the bottled water industry has grown at a disproportionate rate. In 2000, worldwide bottled water sales were around US $ 22 billion. In 2003, these sales amounted to $ 46 billion. Nestlé is the world leader in bottled water, with no less than 68 brands, followed by Pepsi Cola, Coca Cola and Danone. In most developing countries, Nestlé's main product line is Nestlé Pure Life, which is actually low-cost purified tap water with added minerals, and which it markets under the slogan "pure and natural." Pepsi's bottled water is marketed under the Aquafina brand, and Coca-Cola's is Bon Aqua. Both are limited to extracting municipal tap water and adding minerals before selling it as bottled water.

In recent years, popular beverage moguls have expanded their operations to Latin America, seeking new opportunities in a rapidly developing market. There Coca-Cola has been able to benefit from its extensive network of bottling plants. In Mexico, according to investment analysts at J.P. Morgan is the second country, only after Italy, in consumption of bottled water per capita, Coca-Cola has a network of 17 bottling companies, compared to 6 of Pepsi. In Brazil, where Coca-Cola has 19 bottling companies and has been marketing the Bon Aqua brand of mineral water since 1997, the company plans to aggressively increase its market share for purified water. Coca-Cola has similar projects in Chile, where it dominates 31% of the mineral water market and 69% of the soft drink market.

Although the Cocacola and Pepsi brands are known throughout the world, this does not guarantee that the products contain drinking water in perfect condition. In most cases, both process municipal water with a 'reverse osmosis' filter system, add minerals, and then sell the product as purified water. Although their filter systems remove more impurities than municipal water services, no one guarantees that bottled water is perfectly safe to drink. In addition, both Pepsi and Cocacola have had cases of contamination and other water quality problems. In 1999, for example, Cocacola's Bon Aqua bottles had to be recalled because they contained mold and other forms of bacterial contamination. Furthermore, from the state of Chiapas, in Mexico, to that of Kerela, in India, there is growing popular opposition against the repercussions of both multinationals in the dilapidation and contamination of the local water system, due to bottling operations.

Water movement

As a reaction to the global water crisis and the programs of the magnates of this resource, a new social movement has emerged, made up of peasants, indigenous people, workers, consumers and a wide range of citizen organizations committed to the fight for water. Its main message is that water is an essential element of life and, therefore, all water belongs to nature and man. Water is a universal human right. It is not a resource that can simply become an item for sale on the market. Nor is it a service that must be managed and distributed from the private sector based on the purchasing power of the consumer. Water, the essence and source of life on this planet, is a common heritage and a sacred responsibility. In other words, water belongs to "the commons", those non-profit spaces of life that must be conserved for nature and humanity.

For the most part, the action programs of this water movement are rooted in four interrelated principles: [a] water equality - water, as a universal human right, should be distributed equitably to all humanity, not on the basis of rights. market principles and purchasing power; [b] water conservation - water must be conserved in its natural basins, avoiding its waste or misuse, in order that the hydrological cycle is renewed and this resource persists for future generations of this planet; [c] water quality - that water, a vital element, must be protected from contamination caused by the dumping of chemical or industrial waste; and [d] water democracy - water is better protected and managed through the public sector, with direct community participation in decisions regarding its extraction, consumption and distribution.

In Latin America, this water movement manifests itself as a new alliance. On August 22, 2003, 47 citizen organizations from 16 American countries met in San Salvador to launch a new movement called "RED VIDA." At the same time, they defined their platform for action in a "Declaration for the defense of the right to water."

Through this new alliance, the member groups aspired to build a network of support and solidarity with the various struggles that are being waged against the privatization of urban water services; against dams, diversions and diversions of river systems, which have a negative impact on nature and the standard of living of the population; against the massive export of water from rivers, lakes and streams; and against the rapid reduction of underground aquifers.

Before its constitution, RED VIDA member groups joined other activists from Asia, Africa, Europe and North America to make a common front against the agents of privatization at the World Water Forum in Kyoto (Japan) in March 2003. By organizing themselves into "water is life" brigades, they managed to organize a serious debate on the main issues in several thematic sessions, thus preventing the World Bank and the three big water corporations from reaching a consensus on the main pillars of their strategy. privatization project. In January 2004, RED VIDA members also played an active role in the creation and development of a “People's World Water Movement” in New Delhi, India. Participants from 64 countries took part in the New Delhi summit, held on the eve of the Mumbai World Social Forum, which, in turn, developed an international platform for education and action on water issues.

This new movement, however, is not only committed to mobilizing resistance to the privatization of water, but also seeks to build alternative models for the management of this resource. As an alternative to the "private-public partnership" model promoted by the World Bank and the three big water companies, for example, the movement has begun to defend a "public-community partnership" model that has been developed and tested in Porto. Alegre (Brazil).

In this city of more than 3 million residents, water supply services were returned to public hands after a period of private management, in accordance with a new model that required much greater community participation in decision-making about water treatment. the resources. Not only has the public water service proven to be financially viable, it has also improved and expanded water services to meet the needs of the entire city. Currently, the citizens of Cochabamba (Bolivia) are developing a similar model of public management of water services, based on community collaboration.

Finally, it seems that this budding movement reflects a new conception of the imminence and tenacity of the struggle, a feature that differentiates it from other social movements. When organizing the campaigns, the water activists seem determined to draw a line in the sand. Clearly the population and the communities cannot live without water. For many, the fight is a matter of life and death. For these reasons, the demand for democracy in the distribution of this resource cannot and must not be silenced.

* By Tony Clarke and Maude Barlow

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