Water for All (Or At Least Some)

Sources: InterPress Service News Agency; World Health Organization, Peru: Access to Clean and Affordable Water.

Recognizing Peruvian citizens’ right to access drinking water, this month President Alan García allocated $21 million for his new “Water for All” campaign. Out of Peru’s 27 million inhabitants, more than 7 million do not have running, potable water. Two million of those people live within metropolitan Lima, while the other 5 million are spread throughout the country.

The President’s campaign is aimed at bringing water to 2.5 million Peruvians within the next six years, and to ensure that the water meets international purity standards. The first stage of the program will focus on Lima in the hopes of providing water access to over 600,000 people at a cost of $123 million. Currently, many of the Peruvians who are not hooked up to the public-water grid are forced to purchase their water from private companies that drive trucks through their neighborhoods. Not only do these customers pay ten times what public-water customers pay, but they also run the risk of becoming sick. The water trucks are not regulated, and the water is often filled with particles of rust from the dispensing tanks.

García’s effort is also motivated by the desire to meet the United Nation’s Millennium Development Goals (MDG). These goals are aimed at decreasing global poverty by 2015 and specifically include a commitment to halving the number of people without access to drinking water. To meet this goal, however, Peru must increase access to drinking water by over 75 percent and spend approximately $4.47 billion dollars. While the government concedes that this is unlikely, water-rights advocates believe that the new “Water for All” campaign is a good first-step. Those advocates, however, continue to push for a greater allocation of funds to areas outside of Lima, and want the government to address related issues such as the lack of sewer systems.

Peru is anticipating the need to look outside of its borders for help in funding the “Water for All” campaign. In the early 1990s, the World Bank and the Inter-American Development Bank were key players in the push to increase access to drinking water in the country. Those loans, however, were conditioned on (1) increased water rates and (2) a decrease in the number of public water employees. Both of these steps were considered necessary to prepare Peru for the eventual privatization of the water supply.

Questions:

(1) Given the public health and safety implications of not having access to running water, should development loans ever be conditioned upon privatization?

(2) What can the "water wars" in Bolivia teach lending institutions about such a tactic? See The Democracy Center, Bolivia's War Over Water for links to articles about the public protests in Bolivia.