• Privatisation of services

Privatisation of services

Poor countries are under intense pressure in the World Trade Organization's GATS negotiations to open their service markets and "progressively liberalise" key sectors – such as water delivery – to foreign corporations. Recent water privatisation schemes involving multinationals Biwater and Suez in three South African townships, Kanyamazane, Phiri and Orange Farm, in Johannesburg and Mpumalanga province, have been disastrous for poor communities and for their rights to access water supplies.

The paper points out that privatisation will bring about a number of consequences which will have a hard effect on the poor:

• there will be hard choices for poor people whether to spent their money on water or on other necessities
• it is very likely that people will have to deal with prepay water meters, disconnections, unaffordable prices
• household water shortages can be expected
• disease outbreaks are also a likely consequence.

ActionAid therefore recommends:

• the EU should drop its water liberalisation requests in the GATS talks at the WTO
• poor countries should make no new commitments to liberalise sensitive service sectors until full impact assessments are made of their likely effect on poverty issues
• key sensitive service sectors – such as water, health and education – should be withdrawn from GATS altogether
• the WTO must function as an open, all-inclusive and democratic organisation and members should refrain from using threats and power politics in all negotiations.

[adapted from author]

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