Las Americas

Many of us here in the Homeland don’t hear much about Central America except that it is somewhere south of the Rio Grande, and psychopathic army men ran around it, brutalizing poor people for most of the past few centuries. On the up side, however, travel magazines promote Costa Rica as an ideal tourist destination for bird-watchers, and off the coast of Belize a great spot for snorkeling continues to exist. Oh, and here and there are intriguing ancient artifacts left over from primitive cultures that wrote using weird stick figures and glyphs. That’s just about it. Except, of course, for the bananas.

Which means that many would be surprised to learn that Central America is soon to become one of our most favored trading partners and a promising source of profits for large transnational companies looking to collect money from the poor in exchange for water. Water is a very good business to be in, as we can be sure that everyone is going to need it and that they will pay for it if they have to because—otherwise they will die. This incontrovertible fact has been turned up by a number of sophisticated marketing studies, and so there is work to be done. Big French, British, and gringo capitalists are getting busy because this deal is going to have a large number of moving parts, and among them are all the usual suspects: the Inter-American Development Bank (IDB), the World Bank, and the International Monetary Fund (IMF).

For some years now, the poorest Central American countries have had rather restrictive agreements with the IMF that prevent them from spending much money on anything other than paying the IMF back for money imprudently lent to irresponsible and corrupt dictators in the past. These agreements have caused the infrastructure that existed to fall into varying states of decrepitude and disrepair. And as former peasants have come flooding into cities in flight from the mechanized, industrialized, fertilized, and pesticized export farming promoted by the World Bank, no new infrastructure has been built to accommodate them. The result in Managua, San Salvador, and Tegucigalpa is, quite frankly, a great huge stinking mess. Epidemics are commonplace, and you would not drink water from a tap there unless you had a death wish. I am not exaggerating. These days, the Salvadorans are battling the spread of conjunctivitis; half the benighted country has pink-eye. Last year the plague in the region was a horror called hemorrhagic dengue, which of course involved dramatic episodes of fatal bleeding, particularly among children.

Oh well. Enter the IDB, promising to reform the water and sanitation systems—at a cost. The IDB will lend funds to the governments for the purpose of repairing and extending the existing pipery, improving management, and modernizing operations, on the condition that the newly functional water companies then be sold (or contracted) to interested private operators. So the public gets the debt to the IDB, and the operator gets the water company, the client base, and all the money. This plan is called by the IDB a “reform.”

Of course, it’s true that the private operators will have to invest, too. But the money they invest, they intend to collect first from people who need water—including from the poor. In fact the first investments to be made under the IDB water reform loans in El Salvador, Nicaragua, and Honduras are for the purchase and installation of water meters. First things first. The IDB calls this practice “lowering water rates” because the poor now pay private tanker trucks more for water than what the new water company may charge them. Sort of like cut-rate extortion. The water loan in Nicaragua, where upwards of 65 percent of the population lives below the poverty line, is contingent upon the water company extending its billing and upping its collection rates to 85 percent. El Salvador and Honduras have similar loan conditions.

It is also true that the government will retain regulatory authority over the new private companies, once the IDB and national right-wingers succeed in shoving the regulatory measures through the respective legislative hoops and loops. (This will, of course, require some bribing.)

When that has been accomplished, then thousands of unionized public sector workers can be expeditiously fired. Some lucky few will be given training in microenterprise management, with funding from the IDB, so that they can learn to calculate their pathetic income streams, now derived from selling chicle at street lights or squeegeeing windshields. Their old jobs will be performed by low-wage, short-term contract people and computers. This process is what is generally known, in international financial circles, as Development. The IDB claims that this particular reform will allow the water companies to save money on labor, while increasing efficiency and productivity. What a good idea. Except that those public servants left in place by the reform are precisely those who have “managed” the companies up to now, ripping off everything that wasn’t nailed down and half the things that were. They are also the parties who have rigged the regulatory schemes to benefit themselves and their private sector cronies.

This is really true and we can prove it because—you know what? These people are not even clever. Let’s take, for example, Señor Carlos Perla, ex-administrator of ANDA, the public water utility for San Salvador. In 1998 Perla was favorably reviewed by water reform experts at Harvard University: “Perla had taken significant steps to improve El Salvador’s water system by developing legislation to establish an independent regulatory body and by improving the workings of ANDA,” they said. At the same time, however, Señor Perla signed a contract with a Spanish company arranging for generous kickbacks to himself.

Presumably he did this while the Harvardians were not looking because if they had been they would have noticed that, while busily designing regulatory legislation, Señor Perla had built himself an extremely big new house. He is currently charged with illicit enrichment and is a fugitive from justice—probably in Mexico. But his regulatory recommendations live on.

Happily for us, there is still a snag in this process. The legislatures of El Salvador, Nicaragua, and Honduras must approve the new regulatory measures dreamed up by the likes of Señor Perla, and they are balking. But the IDB, a tireless self-promoter as guarantor of democracy and good governance, recognizes the problem and works to shove the laws through the legislatures when there is no election on the political horizon that might make the elected representatives of the people more cautious about pursuing such an unpopular policy. When the Honduran legislature approved the water reform and privatization law in August, a nationwide mobilization and strike blew up. Too bad.

The battle has been fierce in El Salvador and Nicaragua, too, and has occasioned the outright use of—shall we say—undemocratic measures. In Nicaragua, when the legislature passed a law prohibiting the privatization of the water companies, the President vetoed it, and then set about ensuring that it did not happen again by offering favors to a select few swing votes. In El Salvador, the legislature has refused to approve the water sell-off for five years, while the IDB holds funds in reserve to carry out its privatization program anyway and charges the country interest for them. Plus a substantial “commitment” fee, whatever that is.

The forces promoting privatization have gone to exceptional lengths to prevent this from happening by playing a highly stratified version of the game “Let’s You and Him Fight.” The Banks denounce public sector workers as lazy, inefficient, stupid, and corrupt. Environmentalists are portrayed as elite, effete, pansy types who would happily sacrifice a thousand jobs to save a lemur. And low-income water drinkers and toilet flushers are described as petty criminals who steal water from public utilities through devious and ingenious methods, but who are otherwise idle by choice, except when pirating electricity connections or selling drugs.

It was therefore amazing to see these wretched of the earth gather and hammer out a coherent plan for confronting the international development banks. The fight against privatization will adopt a triple focus, targeting: a) the executive branches of governments prone to selling out; b) the development banks that broker the sales; and c) the impending trade agreements that will lock them in. As the Network consolidates, the Center for Consumer Defense in San Salvador will assume the role of coordinator. Representatives from the Network will meet in Miami next month, parallel to the Ministerial meeting convened to negotiate the Free Trade Agreement of the Americas, where water, public health, and education are expected to go on sale.

By January, a work plan will be drafted and adopted, to be coordinated in Brazil, Bolivia, El Salvador, Costa Rica, the U.S., Canada, and the Dominican Republic. The major task is to mobilize the public against the privatization of water, with dramatic battles coming soon in Central America. This will require some ingenuity because, typically, the public doesn’t get committed and involved until the damage has already been done, and by then it’s going to be too late.

The Canadian unions had an interesting idea, though, to drive the point home. They’ve got posters that show a gasoline pump on one side and a water tap on the other. The caption asks the rhetorical question: “Do you want what happened to this (gas pump) to happen to this (water tap)? We think not.”

But this is what the Water Merchants have in store, and not just in Central America. They are moving ahead around the world. In diplomatic circles, the current wisdom is that the wars of this century will be fought over water. Given the nastiness of our recent wars over oil, this does not seem like much to look forward to. But it’s only a matter of time, once water becomes nothing more than another private commodity, salable as a source of profit for the powerful and ruthless.

Gabriela Bocagrande left Houston at an early age to write about multilateral malfeasance for the Observer from Washington, D.C. Her review of Joseph Stiglitz’s Globalization and Its Discontents (“Mistakes Were Made,” January 17, 2003) appears in the new anthology Censored 2004: The Top 25 Censored Stories (Seven Stories Press). Viva Gabriela!