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Water Policies and the Inter-American Development Bank

What is the IDB?

The IDB is the “world bank” for the Latin American and Caribbean region.  It is the largest and oldest regional development bank in the world.  For the last decade the IDB has been the largest multilateral lender of development finance for Latin America and the Caribbean – larger than the World Bank – with a cumulative lending of $128.5 billion and an annual lending capacity of $8.5 billion.  In 2003, IDB lending operations totalled $6.9 billion in the region while World Bank lending operations equalled $5.8 billion. 

The IDB holds about $58 billion of debt in the region, giving the institution tremendous power to impose lending conditions such as privatization, trade liberalization and de-regulation.  The project pipeline for 2003-2005 includes about $3.1 billion for water and sanitation.  A recent review of the IDB water and sanitation portfolio from 1996-2003, undertaken by Public Citizen’s Water for All campaign, yielded the following conclusions.

• Some of the largest IADB loans during 1996-2003 went directly to transnational water companies after they were granted private concessions in Argentina, Bolivia and Honduras.  A loan to International Water Services, a Bechtel joint venture, is pending in Ecuador for the Guayaquil concession.
• A large proportion of IADB loans promote so-called reform of the water and sanitation sector that is based on changing legal and institutional arrangements so that private sector investment in the water and sanitation sector will be secure and profitable. These policies do not take into account that water is a natural resource, a public good, and an inalienable human right, precisely because it is indispensable for human health and life.
• A large number of IADB loans have stark conditions that require states, provinces or municipalities to open the door to privatization (private sector participation) in order to be eligible for IADB loans. However, communities and citizen groups who depend on this basic natural resource are not permitted to participate in the decisions and rarely benefit from the policies.

To read the review, click here.

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