• Oil, Natural Gas, and Electric Deregulation



• Stopping the Nuclear Relapse



• Interactive Map of Proposed New Reactors



• The Case Against Nuclear Power



• The Case for Renewables and Efficiency



• Energy Legislation



• Press Room



• Congressional Voting Records



• Take Action!

IMF questions Uruguayan movement in defense of water

The International Monetary Fund started a public debate with the National Commission in Defense of Water and Life (CNDAV). Said commission is promoting a Consitutional reform against the privatization of water. One of the reasons given by the commission in order to promote this direct democracy mechanism is the existence of a Letter of Intent that the Urguayan governement signed with the IMF.

In its latest media appearence, the IMF assured that it did not impose any demands on the Urguayan government concerning the opening of the water market to the private sector, a fact which is denied -and docuemented- by the social movement in defense of water.

By means of a letter sent to a Uruguayan newspaper, the IMF affirms that "financial aid provided to Uruguay is not subject to any kind of guarantee to ensure payment", trying to render invalid one of the arguments posed by the promoters of the Constitutional Reform in defense of water. The letter is a response to an article published in the same newspaper (La República, August 29th, "Keys to the Constitutional reform in defense of water") and yet it sets aside the conditions established in the Letter of Intent signed in 2002 between the Uruguayan government and said organism.

The article published in La República newspaper stated that the knowledge of the agreements made bewteen the Urguayan governemnt and the IMF -expressed in the Letter of Intent signed with said organism- was one of the reasons why the National Commission in Defense of Water and Life showed reluctance, and which resulted in the proposal of a Constitutional Reform to be voted together with the national elections next 31st October.

The IMF responded that said declarations are "untrue" since "financial aid that IMF provided to Uruguay is not subject to any guarantee to ensure payment". However, going over the contents of said letter of intent signed in June 2002, it seems that it contradicts the sayings of IMF's resident representative in Ururguay.

¿What does the Letter of Intent say?

In the text of the Letter of Intent signed 18th June 2002 between IMF and the Uruguayan government, the latter committed to "introduce new regualtory frameworks in several areas including electricity, telecommunications, water, sanitation, trains, transport, etc."

As if this did not suffice, the document also provides the "Actions and terms", that is, the way in which said changes would take place and the terms during which they would take place.

In paraph VII) II.4 (concerning the modifications to the regulations on water and sanitation) there are some important points as to how said modifications shall take place. Besides this, the exact dates in which the modifications will take place as well as the dates in which they shall send said proposals for Parliamentary discussion, are set.

For instance, paraph "a)" provides the "introduction of a new regulatory framework for the (water and sanitation) sector" adding that said initiative shall be put to Parliamentary consideration in Septemeber 2002".

Paraph "b)" further on provides that the Uruguayan government committs with the IMF to "introduce new quality and control rules in order to enable private sector investment" and it also provides that a "decree" that will enable said "introduction" should be passed in December 2002.

Therefore, in the case of IMF there is not only a change in regulating the water sector but also the provision of a legal-administrative mechanism through which this new regulating framework will become effective, a decree of the Executive Branch.

Paraph "c)" compromised a "call for bids in order to improve water services in Montevideo" that should come into effect in December 2002", while paraph "d)" compromised a "call for bids for the private sector to administer sanitation plants in March 2003."

All the aforementioned provisions can be found in the Letter of Intent, a public document signed between the IMF and the Uruguayan government. These conditions are quite more than a guarantee, they are actual demands. Regarding the changes compromised for the water and sanitation sector -analysed above- it is indifferent wether they were "imposed" by the international organism or wether they were "accepted" by the Uruguayan government.

Awareness of said document, the previous water privatization experienced in the department of Maldonado, President Batlle public declarations and the international scenario, where transnational companies have had a great advance in the water sector, were determining factors taken into consideration by the different organizations joined in the National Commission in Defense of Water and Life.

The main feature of the Constitutional Reform to be voted next 31st October is its conceptual opposition to the IMF, but also to the World Bank and the Inter-American Development Bank. While said multilateral organisms consider water as merchandise, the afoermentioned reform proposes considering water as a human right. And as such, access to drinkable water and sanitation should be guaranteed to the whole population as a result of a sustainable and participative public administration.

More information:

REDES-Friends of the Earth Uruguay
prensa@redes.org.uy
(0598) 2 9082730
María Selva Ortiz
(0598) 99 259822
agua@redes.org.uy

more resources

Because Public Citizen does not accept funds from corporations, professional associations or government agencies, we can remain independent and follow the truth wherever it may lead. But that means we depend on the generosity of concerned citizens like you for the resources to fight on behalf of the public interest. If you would like to help us in our fight, click here.