A recent UN report revealed that some of the world´s largest water companies are pulling out of developing countries because of growing problems with privatisation. Water privatisation was hailed by the G8 and the World Bank as the most effective way to bring clean water to poor people. They spent $25bn (£14bn) between 1990 and 1997 on various schemes, but typically it is not the poor of the world who have benefited. For example, Sub-Saharan Africa received less than 1% of the money during the last 10 years despite being in obvious need of clean water supplies. According to Tearfund, 6,000 children die every day as a result of poor water and sanitation yet more aid goes to middle-income countries than those with the greatest need. The reported noted, "Those who have benefited from private water services in developing countries are predominantly those living in relatively affluent urban pockets ... the very poor sections normally tend to be excluded,"Poverty is, of course, the nub of the problem. Poor people are, well.. poor. They can´t pay enough to keep a private company happy. Once installed, the private companies immediately hiked up prices, and many have faced accusations of profiteering. Some cut off supplies to poor areas when payments fell behind, and others simply reneged on promises to connect poor districts to the mains supply. Many companies have met intense local resistance. Some have been forced out of countries, others have left voluntarily.
British firms have been involved in controversial contracts in Malaysia, South Africa, Tanzania and Indonesia and the government continues to support the privatisation of water despite the numerous problems. The UN report says that local, small-scale water companies are beginning to develop and that their potential is so far untapped. However, we are not really trying to develop that resource (which could also strengthen the local economy instead of a distant multinational) we would rather encourage the funds to be siphoned off by large companies while people die from a lack of clean, safe water. Our government is in love with the Tory idea of privatisation, and they don´t seem to care if the facts do not support their position, either at home or abroad.
As World Development Movement note on their website "British aid money is being used to push water privatisation on poor countries - making it less likely that clean water will ever get to the poorest people. And while poor people lose out, a group of big UK companies are profiting from this aid."