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Water

Do you recall the first time you bought a bottle of water? In the past few decades water has filled supermarket shelves and often sells for more per liter than gasoline. Today Coke, Pepsi and a thousand other companies sell water, millions of bottles of plain tap water, well water and river water filtered and supplemented with chemicals. Water is big business, not because there is less of it, but because there is less of it suitable for consumption.
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Water, the most abundant substance on the planet is something many of us have take for granted. We need it, we turn on a tap and there it is. That is not so everyplace and certainly not anymore. On Jan 8 2008 the San Francisco Chronicle reported that water is become so scarce farmers are seeing more income in selling their water than planting their fields.

According to the Washington Examiner, August 21 2008, T Boone Pickens, a Texas oil billionaire, sees a profitable future in selling water to a thirsty Dallas Texas.

In 1997 the Word Bank proposed to lend Panama $26.6 million dollars for rural water projects another 9.2 Million for urban projects, $2.2 million for water policy development and $4.0 million for project management. Project ID P082419. On the surface this is a recognition that Panama has a need to improve it’s water delivery systems, it does. We in Boquete all know the sound of a dry tap being turned.

According to the world bank assessment:

“There is a strong legal policy framework in the sector, but de facto there is no national policy on water and sanitation and insufficient coordination among sector stakeholders. Law No. 2 of January 7, 1997,which creates the regulatory and institutional framework for the sector, clearly assigns the sector policy role in the sector to the Ministry of Health (MINSA), and the role of executing budgets and of managing international loans in the sector to the Ministry of Economy and Finance (MEF). In reality the government does not fulfill most of the functions specified in the law and there are no clear objectives for the sector. Stakeholders intervene in the sector without a common approach or coordination.

The lack of clear “rules of the game” regarding service provision particularly affects small towns and rural areas. Water supply and sanitation in localities with over 1,500 inhabitants is the responsibility of the National Water and Sewer Agency (IDAAN), except for two small municipalities that manage their own systems. Service provision in localities with less than 1,500 inhabitants is the responsibility of the Ministry of Health (MINSA). However, the dividing line between the areas of responsibility of IDAAN
and MINSA actually is far from clear, so that IDAAN intervenes in smaller localities and MINSA in larger ones. This leads to sub-optimal interventions and lack of clarity about roles and responsibilities.”

On November 8 2007 the Loan documents for loan number 7477-PAN for Water supply and sanitation in low income communities project was completed. Panama was given a $32 million dollar loan to improve water, sewage and accounting systems. The world bank expects a return on investment.water002.jpg

Part of the formula for rural systems is involvement of “stakeholders”. The World Bank has learned that without the involvement of the community, the projects often fail. In much of the world the World Bank has involved private companies in the process. In some of those situations the price of water has increased so much as to become unaffordable. A prime example of this is a Bechtel project in Bolivia.

“In November 2001 Bechtel sued the country of Bolivia for $25 million for canceling a contract to run the water system of Cochabamba, the third largest city in the country, after local people took to the streets to protest massive price hikes for water.

The worst clashes occurred in February 2000, when President Hugo Banzer of called out more than 1,000 police to crush demonstrations with tear gas and rubber bullets, leaving one 17 year old boy dead and hundreds injured.

Aguas de Tunari, the local water company which supplies an estimated 500,000 people in the region, was being managed at the time under a newly awarded 40 year contract by International Water Limited, a subsidiary of Bechtel corporation of San Francisco, the construction multinational.

Bechtel was given the contract as a result of the World Bank’s aggressive pressure campaign on Bolivia to privatize state enterprises. “Bank water officials believe in privatization – the way other people believe in Jesus, Mohammed, Moses, and Buddha,” says Jim Schultz, an activist from California who lives in Cochabamba where he runs an organization named the Democracy Center.”

The World Bank and the International Monetary Fund (IMF) have pushed privatization and rate increases in other Latin American countries such as Nicaragua. On August 22 2008, “IFC Executive Vice President and CEO Lars Thunell said today an opportunity is emerging for the public and private sectors to collaborate on solutions to the world’s critical water and sanitation challenges.”

“Investors see an opportunity in the $450 billion global water sector: stocks in that sector are performing strongly worldwide. Private firms also regard water supply as a business risk and are tackling it as an integral part of their risk-management strategy.”

Water is big money and big money wants to control our water.

What is the real cost of accepting a loan from the World Bank?

Panama has taken the money, Panama is spending the money, if Panama cannot repay the money are we going to see the water concessions in Panama sold to the highest bidder? If you are a free market believer this is not a bad thing, if you are earning $50 a week on Jaramillo how much can you afford to pay for water, Panama’s most abundant resource?

Within the World Bank agreement with Panama there is an allocation for renewing billing and accounting systems. Also a clause to allow interaction with private operators, review of needs to increase fees and for rate differentiation between client groups.

Who will own Panama’s water in the future, the people of Panama? Or will we see rates increase and water from Panama filling tankers and sailing off to foreign shores willing to pay $2 a liter for pure mountain water from Panama?
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If you think this is a fantasy, this is from La Estrella, August 1 2009.

“PANAMA. While Panama city and other areas battle with flood waters, Chiriqui struggles to maintain drinking water rights over the demand to create and export electricity.

The fight continued this week as IDAAN’s provisional director in Chriqui, Guillermo Ardila, tried to negotiate a deal with a hydroelectric company to ensure sufficient water is available to satisfy the city of David’s needs in the summer.

For the past two years David has suffered severe water shortages between November and May compounding difficulties that persist year round due to IDAAN’s out-of-date and inadequate water supply infrastructure.

Ardila told the Panama Star that he was asking the hydro-electric company, Saltos de Francoli, to consider allowing IDAAN to extract one cubic meter of the water for every fourteen cubic meters that will flow through their turbines generating electricity to be sold abroad.

According to the terms of the concession contract between ANAM and Saltos de Francoli, the company has permanent rights to a volume of 292,075,200 cubic meters per year, for which they pay annually $3,095.99 to ANAM.”

This means the people of David may be thirsty this year, especially in a year of El Nino and drought.

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