Capitalism is a great way to drive an economy. AND there are situations where it will not work to the benefit of anyone except the rich. This is one.

Disregarding the importance of people, their welfare and happiness, it is in the interest in the nation that its’ population be healthy. In a case such as this, only the government has the financial ability to supply clean water to people, and should.

It seems unreasonable to expect poor people in countries where there are no jobs to spend one-third of their income on drinking water.

Published on Saturday, June 29, 2002 in the Toronto Globe & Mail

New Approach to African Aid Merely Opens a Different Can of Worms
Development Funds Encourage Privatization That Costs Nations Control
by Stephanie Nolen

ACCRA, GHANA -- Six times a day, Anna Owusu balances a tin bucket on her head and wends her way through the narrow alleyways of Nima -- a congested, decrepit crush of 22,000 people in the middle of Ghana's capital, Accra.
To fetch water for bathing and laundry, the 14-year-old stops at an old well that produces a greenish and untreated -- but free -- liquid. Last year, it led to an epidemic of cholera and typhoid in her family's district.
To fetch water for drinking, the girl continues on to the nearby home of a relatively wealthy slumdweller who has paid for a connection to the Ghana Water Company. A bucket of his clear, clean water costs her about four cents, which over the course of a month adds up to a third of her parents' income.

Should development serve private interests first or public needs. Who will get water to the parched rural areas? Or deep into the alleyways of Nima? If there is a problem with our public-sector system, then fix it. Water is so basic, you can't subject it to the free market.

Stephen Manteaw Integrated Social Development Center
Anna's choice is about more than her family's health versus its financial well-being. It represents the most pressing issues facing Africa as the continent moves forward from this week's critical summit of G8 leaders and their controversial plan to finance new development.
While the summit failed to come up with any new aid money, the world's wealthiest and poorest nations agreed to a framework for African development that relies heavily on private-sector involvement. But as Anna's regular trips to the well show, this new approach can be as fraught with trouble as the old ways of aid.
In Ghana, the government and foreign-aid donors believe they are already pioneers of this new approach.
The country of 18 million people is one of the few peaceful, stable democracies in West Africa, and for more than a decade has embraced an open-market economy, foreign investment and trade as key weapons in its fight against poverty.
But in the fetid and increasingly crowded alleys of Nima, the supposedly new model of African development is seen as something less than a success.
The slum's water shortages are at the centre of a political debate over the direction of development in Ghana, a country in which a third of the population has no access to safe drinking water.
The government believes it can ensure a more affordable, more convenient water supply for the poor by leasing the national water system to an international company. But the National Coalition Against Privatisation of Water, a group that is fighting the deal, says the opposite will happen: Ghanaians will lose control of their public utility and pay vastly more for their water, costing the poor what little access they have now.
As with so much in Africa, everyone agrees that Ghana's current water system isn't working. The water company loses vast amounts of water to theft and leaks, while it struggles to service its equipment, and the water rarely reaches the poor in any case.
For families like the Owusus, the result is to pay as much as 10 times more for their water than the wealthy do, as they turn to local water sellers and trucks run by private "dealers" that visit the slum every day.
"Already, most of my people can't afford the water," said Elijah Hamidu, the district assembly member for Nima. "What will it be like when they privatize it?"
The move to involve the private sector began in 1992, under then-president Jerry Rawlings. A sometimes heavy-handed ruler who took power in a 1981 coup before eventually ushering in an era of democracy and privatization, Mr. Rawlings put water on the list of utilities and organizations he wanted removed from government control. It was one of the decisions that made him a darling of the World Bank, the International Monetary Fund and other major aid donors.
Even when Mr. Rawlings stepped down early last year, and an opposition party took power, his proposal lived. "They criticized it when they were the opposition, and then they got into power and discovered that the only way to get a loan [from the World Bank or IMF] was to agree to do this," said Stephen Manteaw, spokesman for the Integrated Social Development Center and a member of the coalition.
The government insists the deal will generate revenue and improve service. Peter Harrold, the World Bank's representative in Ghana, also says it is largely a local idea -- an important part of the new approach to African development. "This is the government's considered view point," Mr. Harrold said. "They have studied all the options, a management contract, lease, concessions, privatization -- everyone agrees the current situation is unsatisfactory and can't go on -- and the government believes a lease is the preferred option."
He insisted there was no condition on a World Bank loan requiring private-sector involvement. There are, though, conditions for loans and debt relief requiring the end of subsidized water prices and the implementation of user fees. Mr. Harrold said "we facilitated them [the government] to look at all the options and we believe that private production is more efficient than public."
In fighting the proposed leasing deal, the coalition's primary concern is that a private company will have no motivation to build new infrastructure in the places where it is most badly needed, especially in slums such as Nima and rural areas that currently have no access because the poor are not seen as significant consumers. There is much more money to be made delivering water to high-income areas with swimming pools and lush lawns.
Mr. Harrold acknowledged this is a serious concern, but said the solution is for Ghana's government to require the private provider to guarantee a water supply to all areas of the country, and to monitor its supply, as publicly regulated utilities do in many other places.
This leads to the second major concern for the coalition: how little of the process is public. "Until ISODEC blew the whistle on this, 99 per cent of the population didn't know there was any such policy," Mr. Manteaw said. "In Canada, such a major public policy decision would have to have a series of hearings."
There have been none in Ghana. Not even the bid documents have been made public. And no one at the well where Anna goes had heard of the plan.
"What right does the World Bank or the IMF have to demand respect for the rule of law and democracy and then to do this?" Mr. Manteaw said. "If they wanted this to be public, they could have built the requirement for hearings into the conditions."
Regardless of its merits or flaws, the agreement has yet to be signed, a year after it was expected. A deal is now slated by the end of this year, but the controversy has already led to a decision to cut the lease to 15 years from 25 years.
The leading contender for the contract, which is believed to be worth $1.4-billion, is thought to be Suez Lyonnaise Des Eaux, a French firm that runs water systems in 120 countries.
According to ISODEC, which claims to have seen details of the bid document, the government will have to double the price of water before the lease comes into effect. No company will accept the negative public-relations impact of that themselves, the group says, adding that about nine cents per bucket would be the lowest price at which a profit could be made.
The coalition also says the bid documents contain no provisions to guarantee that any equipment built or improved will remain the property of the water company when the 15-year lease ends. Nor is there any plan to train local managers and workers.
For Mr. Manteaw, though, the issue boils down to whether development should serve private interests first or public needs. Who will get water, he asked, to the parched rural areas? Or deep into the alleyways of Nima?
"If there is a problem with our public-sector system, then fix it," he said. "Water is so basic, you can't subject it to the free market."
© 2002 Bell Globemedia Interactive Inc