speaking of water rights and privitization

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IMF Loan Conditions for Nicaragua Require Privatization Measures That

Would Enrich Corporations at the Expense of People

 

Conditions May Violate Nicaraguan and U.S. Law

 

WASHINGTON, D.C. - Loan conditions expected to be imposed on Nicaragua

today by the International Monetary Fund (IMF) could result in bulk

water exports and higher consumer water prices, enriching corporations

at the expense of the Nicaraguan people, according to a network of

citizen groups working to oppose water privatization measures in

Nicaragua.

 

Despite widespread opposition to the prospect of a corporate takeover

of Nicaragua's vital water resources, the executive directors of the IMF

were to vote on new conditions that require Nicaragua to sell its major

hydroelectric dams and the state hydroelectric company called Hidrogesa.

The IMF has pushed forward with these loan requirements despite a law

passed unanimously in August by the Nicaraguan National Assembly that

suspended all private concessions involving water uses until a national

regulatory framework could be established.

 

" IMF loan conditions should not contradict the unanimous decision of

the Nicaraguan National Assembly to suspend private concessioning of

water, " said Sara Grusky of Public Citizen's Water for All campaign.

" Has the IMF told President Bolaños of Nicaragua that he must override

the decision of the National Assembly in order to qualify for new loans

and debt relief? "

 

The new law stemmed from concerns about corruption and the lack of any

regulatory framework governing water use by whatever private company

would run the hydroelectric facilities. The law safeguards the country's

water resources until further notice, although the IMF would, in effect,

supercede the national law if it approves the new loan conditions

today.

 

" The IMF is taking an Olympic leap over the laws of our country

including our Supreme Court, the Comptroller General's Office, the

National Assembly and our constitution, " said Ruth Herrera, a

representative of the National Network in Defense of the Consumer, a

Nicaraguan organization. " One has to ask if any of our democratic

institutions will be respected. " Herrera and Public Citizen are working

with Centro Humboldt, Centro de Estudios Internacionales, and Centro

Nicaraguënse de Derechos Humanos in Nicaragua, as well as the Quixote

Center, Nicaragua Network and Latin America Working Group in the United

States.

 

The privatization process has been fraught with alleged corruption and

irregularities. Early in 2002 - before the IMF loan conditions - Enron

bid to buy the hydroelectric dams. But when Enron failed to comply with

conditions of the sale, the contract was transferred to Coastal Power of

Texas. However, the bid was so low, estimated at only 20 percent of the

plant's value, that the comptroller general of Nicaragua began a review

of the process. This incident prompted the National Assembly to pass the

water law.

 

In addition to violating Nicaraguan law, the new IMF loan conditions

contain requirements that violate U.S. law by imposing user fees for

Nicaraguan children to attend schools. The new agreement will require

the government of Nicaragua to implement " school autonomy " legislation

that reduces national government funding for schools. Only parents who

can afford the fees for textbooks, supplies, uniforms and other items -

costs known as user fees - will be able to send their children to

school. If approved, this would violate U.S. law; in November 2000,

Congress passed legislation requiring the U.S. executive director at the

IMF to vote against any loan that includes " user fees " for education or

health.