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Watch Out: The World Bank Is Quietly Funding a Massive Corporate Water Grab

Even though water privatization has been a massive failure around the world, the World Bank just quietly gave $139 million to its latest corporate buddy.

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"In the past, the World Bank pushed privatization as the way to increase investment in basic infrastructure for water systems," said Gelbspan. "But since then bank officials have admitted that the transnational corporations don't want to invest in infrastructure, and instead want only to pare down operations and skim profits. The World Bank has lowered the bar, satisfied with so-called 'operational efficiency,' that cuts utility workforce, tightens up bill collections and shuts off people who can't pay."

That's been a recipe for failure and protest, especially in the very region that IFC and Veolia hope to pump for all its water worth. In 1998, World Bank loans were secured to upgrade the crumbling post-Soviet water system in Yerevan, a city in the Eastern European nation of Armenia. With a caveat: It had to be managed by a private contractor. The Italian transnational ACEA landed the job, but quickly failed to extend water access, partially thanks to company corruption. It also failed to properly maintain water pressure, allowing sewage to seep into the city's drinking water and sicken hundreds. Despite the travesty, the World Bank issued another contract in 2006 to Veolia, which hired ACEA's top executive. Two years later, only one in three Yerevan residents were lucky enough to score 24-hour water service, while contamination problems continued. Veolia's contract with the city is up for renewal in 2015.

The same goes for the Turkish city of Alacati, which landed a $13 million loan in the late '90s, as well as Veolia's incompetence. The city's water bills skyrocketed to 12 times the price of service in other parts of the country. Multiply that times most every nation or city that has privatized its water service, and you've got a good idea of why the World Bank's IFC is under fire for rapacious resource-snatching. And why the developing world is right to be wary of its good graces, although the World Bank can do good when it so chooses.

"The World Bank does not at all speak with one voice on their pro-privatization stance," Darcey O'Callaghan, Food and Water Watch's international policy director, explained to AlterNet. "One staff member referred to it as a bad experiment that has been proven wrong, while higher staffers try to take a more nuanced position, claiming that the Bank is neither for or against privatization but simply promotes the most appropriate model for specific communities. Unfortunately, our own statistics have shown that regardless of their statements, 52 percent of their projects between 2004 and 2008 promoted some form of privatization."

But rather than repair privatization's failed project at its source, the World Bank is simply spinning off its compromised philosophy to the IFC. So while the World Bank may be torn in its endorsement of water privatization, the IFC has no such reservations, in hopes of dodging the slings and arrows of public outcry, and perhaps legal liability.

"What's really scary," O'Callaghan added, "is that we are increasingly seeing the International Finance Corporation pick up where the Bank has left off in water privatization. The IFC is a Bank-sponsored institution whose goal is to promote the private sector, and because their financing also comes from the private sector, they can be more difficult to hold accountable. Worse yet, according to our 2000-2008 stats, 80 percent of IFC loans had gone to the four largest multinational water companies, further concentrating the global water industry."

It's not just water that's at the center of Earth's mounting resource wars. In late October, Britain's government announced it was looking to sell off its state-owned forests to counteract a yawning deficit. Today, natural gas companies are preparing to drill in America's national parks. Indeed, America and Britain's bungled occupation of Iraq is a protracted resource war for control of the embattled nation's oil reserves. Water is just one more natural resource, albeit the most important one, worth a killing to those seeking to callously leverage limited funds for innocent lives.