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Great Lakes Article:

Activists blame ADB for water privatization
By Rhodina Villanueva

The Asian Development Bank (ADB) should share in taking responsibility for the impact of the failed water privatization in Metro Manila.

According to the Freedom from Debt Coalition (FDC), the ADB, together with the International Monetary Fund and the World Bank, has been very active in pushing the government to pursue the privatization of water utilities.

" In the ADB country-operation strategy for the Philippines in 1993, ADB called for greater involvement of the private sector, especially in the water sector," said Jolette Fajardo of the FDC-Water Team.

He noted that the ADB, as one of the lenders of Maynilad Water Services Inc., helped pushed government to agree to giving in to Maynilad’s demand for a rate increase to prop up the ailing company.

" Because of the privatization policy, Metro Manila residents have been subjected to steep water- rate increases with no accompanying service improvements. The policy also succeeded in taking away the provisioning of water from the realm of government services to a sphere which treats water as a source of profit," Fajardo said.

He added that with water in private hands, the people have lost their power to demand better services because of the private corporation’s lack of accountability to the public.

" They cannot even participate in the ongoing legal dispute between the Metropolitan Waterworks and Sewerage System [MWSS] and Maynilad because of lack of ‘legal personality’ to intervene in a "private contract' between these companies," Fajardo said.

On December 9, 2002, Maynilad filed a notice of termination of its services with MWSS, alleging that the government has made it difficult for it to perform its service obligations. According to Maynilad, MWSS violated provisions of the concession agreement.

In this light, the FDC reiterated its stand that privatization will not solve government inefficiency and corruption. "Even privatization proponents admit that strong and good governance is a requisite for privatization to work. The solution is to reform government, not turn its back from its responsibility to its people."

Fajardo said, "Pursuing the privatization policy espoused by multilateral financial institutions like the ADB will not bring water for all."

He added that "by pushing government to adhere to a policy treating water as an economic good provided by the private sector, the ADB has succeeded in taking an essential service away from effective government control, making water a source of profit available to only those who can afford it."

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