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Posts Tagged ‘MIGA

Come July, could an African or Asian head the World Bank?

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UN Millennium Development Goals 1 to 4

Who will head the World Bank after 2012 June? A global coalition of development activists and non-governmental organisations is calling on the World Bank’s governors to ensure that Bank President Robert Zoellick’s successor is chosen in an “open and merit-based process” that will give borrowing countries a major say in the selection.

In an open letter released shortly after the Bank’s announcement this week that Zoellick will step down at the end of his five-year term in June, some 60 groups and activists from around the world said any candidate should gain the “open support” of at least the majority of World Bank member countries and of the majority of low- and middle-income countries that make up most of its borrowers.

IPS News has reported that the arrangement which currently exists is absurdly called an informal “gentlemen’s agreement” (there are no gentlemen in this matter, now 68 years old, of leading poor countries into irredeemable debt and condemning their citizens to hardship and poverty). This agreement of exploitation, for that is what it is, exists between the USA and the countries of western Europe – specifically Britain, France and Germany – and provides that a national of USA will hold the top position at the World Bank Group, and that a national of Europe will hold the managing directorship of its sister institution, the International Monetary Fund (IMF).

“It’s a World Bank, not a US Bank. It needs the best candidate to get the job with support of wide Bank membership, not just the US,” IPS reported Collins Magalasi as having said. Magalasi is executive director of Afrodad, one of the lead NGOs which released the open letter calling for a change in the way the World Bank Group’s leader is chosen. The coalition includes Oxfam International, Civicus, and the African Forum and Network on Debt and Development (Afrodad).

The open letter has said: “The candidate must gain the open support from at least the majority of World Bank member countries, and from the majority of low and middle-income countries. As the Bank only operates in developing countries, and has most impact in low-income countries, any candidate that was not supported by these countries would seriously lack legitimacy. In addition to encouraging developing countries to nominate their own candidates, the best way to ensure that developing countries play a central role throughout the selection process is for the successful candidate to be required to gain the support of a majority of both voting shares and member countries.”

UN Millennium Development Goals 5 to 8

“This need not require any formal changes to the Bank’s articles of agreement, but could simply be agreed by the Board, to build on the limited proposals agreed in April 2011. To make this work, countries would need to vote independently, not through their constituencies, and declare their support publicly. It is time for the US to publicly announce that it will no longer seek to monopolise the Presidential position.” You can read the full letter at the website of the European Network on Debt and Development (Eurodad).

Bloomberg Businessweek has reported that China has called for the next World Bank chief to be picked based on merit. The next leader should be selected “based on the merit principle and open competition,” Foreign Ministry spokesman Liu Weimin said at a briefing in Beijing. Liu was apparently responding to a question on whether the next head should be from a developing nation. Since according to the US Treasury, the largest foreign holder of US debt is China, which owns about US$1.2 trillion in bills, notes and bonds, that sounds like an ungentle nudge from across the Pacific that it’s time the old order was scrapped.

The World Bank Group is quite top heavy. As its senior management the WB Group has: one president, three managing directors, a chief financial officer, two senior vice presidents, six vice presidents for the World Bank Group’s six operational regions, seventeen vice presidents for the Group’s divisions and departments, one director general. The IFC (International Finance Corporation) has one executive vice president and chief executive officer, nine vice presidents. The MIGA (Multilateral Investment Guarantee Agency) has one executive vice president, one vice president and chief operating officer, five directors.

While from the three managing directors downwards it may look like the WB Group senior management is representative of the variety of countries to which it lends, this is illusory – these people are financiers first and are free-market standard-bearers and privatisation evangelists. At those positions in the World Bank, as in the IMF, there are no nationalities – there is only capitalism.

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Written by makanaka

February 16, 2012 at 18:45

The race to own India’s water

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Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterWater privatisation in India today comes in a wide range of what are called “solutions” by the votaries of public-private partnerships. There is water-related engineering and construction (such as earth-moving activities, alteration of river courses, artificial linking of rivers, building of dams and pipelines, etc), water and wastewater services, and water treatment, which affect both nature and communities. What remains outside the ambit of “solutions” – only until the victims can be persuaded to pay – are the impacts of the micro-scale geoengineering. Every impact damages people and the environment. Impacts can be categorised as: ecological (effects on natural ecosystems), social (related to rights of human beings and communities, health, cultural norms, attitudes, belief systems), economic (affecting livelihoods, well-being, and access to basic services) and even legal and institutional.

We are now seeing increasing pressure for private sector development in India – and the rest of Asia-Pacific. Manthan Adhyayan Kendra, an independent research unit concerned with water in India (they are based in Madhya Pradesh) says that this pressure is being mounted mainly by two influential international financial institutions: the World Bank and its regional partner, the Asian Development Bank. The World Bank gives funds, advice, training and technical assistance to governments and the private sector to implement privatisation.

Courtesy, The Economist, special report on water, 22 May 2010Four entities allow the World Bank to undertake various functions. The International Finance Corporation (IFC) lends directly to the private sector and can even purchase equity in private companies. The Public Private Infrastructure Advisory Facility (PPIAF) seeks to improve the quality of infrastructure through private participation. The Multilateral Investment Guarantee Agency (MIGA) insures the private sector against commercial and political risk. The International Court for Settlement of Investment Disputes (ICSID) takes charge of disputes between investors and states. The Bank also has some other mechanisms that promote its activities in India including Water and Sanitation Program (WSP), Water and Sanitation for Urban Poor (WSUP), Water for Asian Cities (WAC) and others. The World Bank’s funding partners include the JBIC, AusAid, GTZ, USAID, DFID, UN-Habitat and the ADB.

More growth in large cities and towns, and urbanisation becoming a dominant land use pattern in more districts of India mean that the industrial, residential and municipal demands for water are rising quickly. India’s Central Pollution Control Board (an agency of the Ministry of Environment and Forests, Government of India) has released its ‘Observation on trend of Water Supply, Wastewater Generation in Cities and Towns’. Here are its main comments and highlights. I’ve left the language as it is – the import is what counts.

Courtesy, The Economist, special report on water, 22 May 2010

From The Economist's special report on water, 22 May 2010: Global water sources

“In decade of 90’s the growth of cities is observed is 33% while the growth of the decade in beginning of millennium is slowed down. Metropolitan cities is increased from 3 to 6 Nos. from 80’s to 2008. Class-I cities increase from 37 to 53 Nos. Class-II towns increase from 22 to 35. This trend indicates that all type of cities has grown in the decade of 90’s.”

Findings and Recommendations

  • Since the cities are growing, the population is enhanced from 30 million to 48 million.
  • Consequently water supply has been increased approximately twice in magnitude from 4,970 MLD (million litres per day) to 8,782 MLD.
  • Sewage generation has risen 38%.
  • Comparing the data of decades of 90’s to 2008, it is indicated that coastal cities and towns are not growing significantly.
  • Treatment capacity of sewage in comparison to decade of 80’s to until now has increased almost double (93%).
  • There are 498 Class-I Cities having population of 257 million and 410 Class-II Towns having population in India.
  • Total water supply including all class-I cities and class-II town in India is 48,093.88 MLD.

The CPCB says that wastewater generation from all class I cities and class II towns is 38,254 MLD whereas the installed treatment capacity is 11,787 MLD, which means that no more than a maximum of 31% of total sewage generated can be treated. (If the question is ‘where does the rest go?’, the CPCB answers that too in its report.) “This evidently indicates ominous position of sewage treatment, which is the main source of pollution of rivers and lakes,” warns the CPCB report. “To improve the water quality of rivers and lakes, there is an urgent need to increase sewage treatment capacity and its optimum utilisation.”

Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterThe CPCB, which thankfully still has a reputation for straight talking, has advised India’s municipalities and town administrations to “set up a very thoughtful action plan to fill this gap in a minimum time frame”. The CPCB has suggested that large cities in which and from which the pollution problem is more severe, cities/towns whose effluents and sewage are polluting rivers and water bodies “will be required to be taken up on priority basis in first phase”. Why is the CPCB so insistent? Quite simply, it says there is an “urgency of preventing pollution of our water bodies and preserving our precious water resources”.

But even in the India of non-city and non-town landscapes, there are plans being hatched by the would-be water merchants. An indication of the mischief afoot comes from a report righteously entitled ‘Pro-Poor Financial Services for Rural Water: Linking the Water Sector to Rural Finance’. (If so many good deeds are ‘pro-poor’ nowadays how come the ranks of the do-gooders is only increasing?) Here is what it says: “Previous studies suggest that a considerable demand for pro-poor financial services for water in rural areas remains unmet. The number of potential microfinance clients in rural areas for investments in water supply is estimated to be 5.0 million in East/Southeast Asia, 10.3 million in South Asia, and 3.1 million in sub-Saharan Africa.” Those three numbers get to the heart of the matter.

The report continues: “Concerning microloans for rural sanitation, there are 17 million potential clients in East/ Southeast Asia, 30.8 million in South Asia, and 4.4 million in sub-Saharan Africa. In total, the potential demand for micro-loans in these three regions is estimated at US $ 1.5 billion in the case of rural water supply, and US $ 5 billion in the case of rural sanitation. The challenge is how to unlock this latent demand and turn it into an effective process.” The authors make no bones about it, the riches at the bottom of the water table is what they’re after. And who are the authors? The German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Technische Zusammenarbeit (well-known as GTZ in Asia, and which I was surprised to learn is a GmbH), the International Fund for Agricultural Development (IFAD) and of course the World Bank.

Courtesy, The Economist, special report on water, 22 May 2010

Cover of The Economist's special report on water, 22 May 2010

The water merchants have their cheerleading squad in place in the form of a pliant media, and The Economist has obliged by bringing out one of its typically characterless ‘surveys’, as it likes to call them. It is a special report on water (the 22 May 2010 issue) and the subject is dealt with in the sycophantic manner that the weekly reserves for the captains of industry. “Yet even if it takes two litres of groundwater to produce a litre of bottled water, companies like CocaCola and PepsiCo are hardly significant users compared with farmers and even many industrial producers.” (Hear, hear, who needs those pesky farmers anyway?) “PepsiCo has nevertheless become the first big company to declare its support for the human right to water. For its part, CocaCola is one of a consortium of companies that in 2008 formed the 2030 Water Resources Group, which strives to deal with the issue of water scarcity. Last year it commissioned a consultancy, McKinsey, to produce a report on the economics of a range of solutions.” This transatlantic weekly, once upon a time British, puts in a word for big dams too: “Dams and reservoirs certainly need constant repairs and careful maintenance and do not always get them, usually because the necessary institutions are not in place.”

Who are operating as water merchants and what do they want? There are several North American / West European companies now in India: Ondeo-Degrement, Veolia Environnement, Saur of France, RWE/Thames Water of Germany and the UK Bechtel, Enron (US), Compagnie Generale des Eaux (CGE). Indian companies are going to either compete with them, or join them – Tata subsidiary Jamshedpur Utilities and Services Company (JUSCO), IVRCL Infrastructures and Projects, Mahindra Infrastructure Ltd., IL&FS.

Surat, Gujarat, near the mouth of the Tapi river

Surat, Gujarat: Fishing boats near the mouth of the Tapi river

The foreign multinationals are involved in several projects across the country. Compagnie Generale des Eaux (CGE) is operating urban water supply project in Hubli-Dharwad in Karnataka. Veolia is operating water and wastewater plant in Nagpur in Maharashtra and it has also formed a joint venture with JUSCO. Ondeo-Degremont has won contracts to construct water treatment plants in Mumbai and Chennai and it is also operating a wastewater treatment plant in Delhi. Thames Water was involved in a leak reduction project in Bangalore while United Utilities and Bechtel are partners in the Tiruppur project. JUSCO has projects in Jamshedpur, Bhopal, Kolkata and Adityapur. IVRCL is working on a wastewater treatment project in Alandur, desalination in Chennai and solid waste management in Tiruppur. IL&FS is involved in various projects in Haldia, Tiruppur, Vishakhapatnam and municipal waste processing facilities in Delhi and Ajmer, Rajasthan.

The CPCB has outlined the water, sewage and pollution tasks for cities, but its worries are going to be transformed into “a challenge to unlock latent demand” by the multilateral lending organisations on the one hand and the global water merchants (together with their Indian partners). Already deficit in terms of civic infrastructure and struggling with yawning gaps in the provision of healthcare and education, India’s towns and small cities will pass the burden of water profiteering on to those who can’t afford it. They leave the rural districts to earn a living in the cities, when their water rupee gets squeezed down to the last drop, where will they go then?