World Bank focused in privatization of municipal systems for global water governance

Rep. Gwen Moore, D-Wisc. wrote in a letter addressed to World Bank head Jim Kim that the practice of the World Bank both advising countries on water and investing in private water companies offers a concerning conflict of interest. In it, Moore urges the Bank to instantly “cease promoting privatization of water resources until there has been a robust outside evaluation.” “I am increasingly uneasy with water resource privatization in developing countries and do not believe that the current ring-fencing policies separating the investment and advising functions of the [International Finance Corporation] are adequate,” she wrote. She also requested, “I would respectfully urge the WBG and IFC to cease promoting and funding privatization of water resources, including so-called ‘public-private partnerships’ in the water sector, until there has been a robust outside evaluation.” Moore works as the ranking member of the monetary policy and trade subcommittee of the House financial services committee, the body in the federal government tasked with overseeing the World Bank. Her concerns roused from the actions carried out by the International Finance Corporation (IFC), the private-sector lending arm of the World Bank. She and other advocates said that the IFC is making profit-driven investments in private water companies at the same time that the World Bank is advising countries to work with the private sector to improve access to clean water. The letter mentions the instance of Manila, Philippines, where the country started working with two private water companies in 1997, based on IFC advice. The IFC then went on to invest in the Manila Water Corporation, one of the two companies, which has yielded a $43 million profit thanks to rate hikes nearing 850 percent. Attempts to increase prices further were stopped by regulators, but the company is pursuing the ability to raise rates through various appeals. “I would be less troubled with the structure of the Manila deal and the subsequent arbitration if I had full confidence that both were not products of the improper mingling of the advisory and investment functions,” Moore said. There does not seem to be contract on this issue. The investment in the Manila Water Corporation is pushed by the IFC as a success story for public-private partnerships. It is considered as an inclusive business model that helped reach more than 1.7 million people and provide uninterrupted water access for 99 percent of customers. The water operation is also held up for transforming from a money-losing to a money-making business. Communications officer Geoffrey Keele commented on Moore’s letter that the IFC is working on a formal reaction to the Congresswoman first before making public comments.     Source: technocracy.newsmunicipal-systems