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Nicaragua

In Nicaragua, where grave problems in the water provision and sewage sector already threaten the sustainability of water as a public resource, the World Bank, International Monetary Fund (IMF), and the Inter-American Development Bank (IADB) promote a policy of water privatization which will make it even more difficult for Nicaraguans of all stripes, but mostly the poorest among them, to obtain clean water at affordable rates. Loan conditions, which mandate price increases, cost-recovery, and a strict course toward privatization, imposed brazenly by the IMF explicitly violate a recent Nicaraguan law unanimously passed in the alarmed National Assembly suspending all private concession involving water uses until a national regulatory framework could be established. International lenders have not showed any desire to work within the confines of Nicaraguan law. Newer loan conditions from the IMF, to sell off its major hydroelectric dams and the state hydroelectric company, Hidrogesa, to multinational corporations, put large bodies of water under nominal and unresponsive private control. This worries farmers who have depended on the water for irrigation and paves the way for bulk water exporting, which, in the private domain, would be difficult to combat.

Although water covers ten percent of Nicaragua’s surface, environmental degradation, pollution, and simple scarcity in some regions threaten the country’s ability to provide enough water to sustain its population and productivity. Today, near a third of Nicaraguans do not have access to potable water. In rural areas, where 72 percent of people lack such access, people must often procure their water from shallow wells, rivers, streams, and lakes that are polluted with residential sewage, pesticides, and industrial toxins. Although 93 percent of urban residents can claim to have either legal or illegal water connections, cities are subject to frequent water outages, particularly during the dry season. Sewage service is limited to only a few moderately sized cities. Nicaragua’s largest and most important city, Managua, does not have sewage treatment.

In June 2001, after promoting water privatizations in Matagalpa, Jinotega, Leon, and Chinandega, and pressuring the Managua water utility ENACAL into neo-liberal reforms, the IMF again insinuated itself in the sovereign affairs of Nicaragua by compelling a 30 percent increase in water rates for residential customers. This will have severe effects on the livelihoods of most Nicaraguans. For example, the Inter-American Development Bank estimates that residents in marginal communities around Managua could tolerate water bills of $6.78 a month, which would constitute eight to 11 percent of the salaries of public school teachers and free trade zone workers. For the many households supported by unemployed or marginally employed income winners, the percentage of household income required to pay for these price hikes would be exponentially higher. In these circumstances – along with another IMF initiative to impose primary school fees on parents who wish for their children to have an education (while most countries are trying to cut such fees) – families are forced to make daily decisions between basic needs such   as water, food, and schooling.

These IMF policies instigated peaceful protests coordinated by a broad range of organizations, including human and consumer rights groups, women’s groups, and labor unions, such as the National Network in Defense of the Consumer, Centro Humboldt, Centro de Estudios Internacionales, and the Centro Nicaraguënse de Derechos Humanos. Activists also took legal action, claiming to the National Assembly, the Controller’s office, and the Supreme Court that the 30 percent rate increase violated procedures that require 30 days prior notice for increases and the requirement that the tariff structure remain fixed for five year periods. ENACAL and the regulatory agency, INAA, have yet to respond to the peoples’ concerns, although they are capable of being readily responsive at the behest of the IMF.

In the News:
August 2004: The Struggle For Latin America's Water

    » cmep | Water | cmep Water | reports | nicaragua


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