Fighting Privatization In Nicaragua , From the Nicaragua Network April 2004 | Food & Water Watch
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Fighting Privatization In Nicaragua , From the Nicaragua Network April 2004

The Inter-American Development Bank extended a loan of US$13.9 million to the government of Nicaragua for the “modernization of the management of water delivery and sewage services” (as the Bank euphemistically calls water privatization) in Nicaragua. This was done in the face of strong opposition by the people of Nicaragua to the privatization of water or its delivery. Moreover, current Nicaraguan law forbids any kind of concession of water until a general water law is passed.

Some background:

1. In 2003, the Nicaraguan National Assembly passed a moratorium on any privatization of water resources until a national water law was approved. Two separate bills on this subject are pending at the present time in the National Assembly, making it illegal to extend any concessions on water at the present and, depending which version is passed, in the future as well.

2. On Wednesday October 4th, Nicaraguans held a well-attended, spirited demonstration in Managua to show their opposition to water privatization.

3. Nicaraguans have already suffered the failed privatization of telecommunications and of the supply of electricity in their country.

4. The US$13.9 million loan [Loan 1049/SF-NI] extended by the Inter-American Development Bank to pay for this concession will create a new debt that all Nicaraguans will have to pay.

5. The jobs of ENACAL workers will be left at the mercy of the company that wins the concession, which will hire them as contractors only if it is convenient for the company, in open violation of collective bargaining agreements.

In late October, the opening of the bids for the modernization of the management of Nicaragua’s water delivery services (ENACAL) were postponed, thanks to the active organizing of Nicaraguan organizations such as the National Consumers’ Defense Network and the Community Movement along with an international sign-on letter (with the names of over 200 organizations from around the world) and calls and faxes to the Inter-American Development Bank! Alejandro BendaƱa, of the Managua-based Center for International Studies, was able to turn the international sign-on letter over to Dr. Iglesias in person at a conference in Rome. Iglesias promised to contact the IDB representative in Nicaragua about the matter.

Copy of International Sign-On Letter

Dr. Enrique Iglesias
President
Inter-American Development Bank
Washington, D.C.
U.S.A.

Dear Dr. Iglesias:

We, the undersigned, representatives of organizations familiar with the tragic impact of the failed privatizations of public services in many countries, wish to express our concern upon learning of the intention to privatize the modernization of the management of the water delivery and sewage services in Nicaragua. Nicaraguans have already suffered the failed privatization of the supply of electricity in their country and they have mobilized to protest against the privatization of water, access to which they, and we, view as a human right. Furthermore, there should be full participation of all sectors of civil society in any decision-making about public services, which did not occur in this case.

It is apparent to citizen organizations in Nicaragua that the objective of this concession is to turn over the responsibilities of the national agency ENACAL to a transnational corporation that will administer and decide everything related to the present and future of water and sewage services. A US$13.9 million loan extended by the Inter-American Development Bank will be used to pay for this concession. This creates a new debt that all Nicaraguans will have to pay, and to it will be added the commissions and incentive payments that will be offered to the company that wins the concession. The jobs of ENACAL workers will be left at the mercy of that company, which will hire them as contractors only if it is convenient for the company, in open violation of collective bargaining agreements.

We want to remind the IDB that, in 2003, Nicaragua passed Law 440 which prohibits any type of concession over water or water resources until the legislature passes a general water law, which is being debated at the present moment in the National Assembly.

Given the above, we urge you to cancel Loan 1049/SF-NI that finances the concession for the modernization of the management of Nicaragua’s water and sewage services, because of its illegality under laws presently in force in that country and because it only represents further indebtedness for the Nicaraguan people.

Sincerely,

[To view the sign-on letter with all the signers, go to www.nicanet.org]