Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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poorest people. 140 Governments in developing countries are thus faced with a<br />
dilemma: how to obtain the necessary investment and related technology while<br />
ensuring that benefits are shared by all.<br />
Box 22: The 4 th World Water Forum<br />
The Ministerial Declaration of the 4 th World Water Forum held in Mexico city in March 2006<br />
reaffirmed that “governments have the primary role in promoting improved access to safe<br />
drinking water, basic sanitation, sustainable and secure tenure, and adequate shelter, through<br />
improved governance at all levels, and appropriate enabling environment and regulatory<br />
frameworks, adapting a pro-poor approach with the active involvement of all stakeholders”<br />
(see www.worldwaterforum4.org.mx).<br />
Environmental services are big business. The global market for environmental<br />
services sector exceeded $365 billion, in 2002, 80 percent accounted for by water,<br />
sewage and solid waste management. The industry has a dual structure, with a small<br />
number of large firms accounting for about 50 per cent of output in individual market<br />
segments,(the three largest water operators account for more than 50 percent of the<br />
global market) 141 while a large number of smaller firms account for the remainder. In<br />
developing countries, the emphasis has been on sewage treatment and water delivery.<br />
Private investment projects have targeted high and middle income countries: LDCs<br />
have hardly been touched. For instance, less than 0.2 percent of all private sector<br />
investments in the water and sanitation sector of developing countries went to Sub-<br />
Saharan Africa. Only 3 percent of the developing country population is provided with<br />
drinking water t hrough private operators.<br />
Box 23: Buenos Aires Water Supply Privatization<br />
Questions remain about the assumption that market liberalization automatically produces<br />
improvements in the efficiency of water utilities and in the connection of new customers. In<br />
1993, following the advice of the IMF, the water supply system of Buenos Aires was<br />
privatized and placed in the hands of a consortium led by the French giant firm Suez.<br />
Although there were initially impressive gains in the extension of water infrastructure, the<br />
majority of the concessions’ negative impacts have been most deeply felt in the poorest<br />
sections of Buenos Aires 142 . Many poor households fell into serious arrears and were<br />
disconnected from the network, especially prior to 1998. Environmentally, those living in the<br />
poorest areas of the city have also been faced with the negative effects of rising groundwater<br />
and the health risks associated with nitrate-contaminated aquifers. These municipalities have<br />
some of the lowest average incomes in the Greater Buenos Aires area and yet a large part of<br />
the financial burden for extending the network has fallen on these households. 143 . In March<br />
2006, the Government of Argentina cancelled the contract with Suez.<br />
140<br />
UNDP, International <strong>Trade</strong> in Environmental and Energy Services and Human <strong>Development</strong>,<br />
Discussion Paper, Asia-Pacific <strong>Trade</strong> and Investment Initiative (Colombo, 2005) at p. 22,<br />
(www.undprcc.lk/Publications/Publications/International_trade-completed.pdf).<br />
141 Hilary, John, GATS and Water: The threat of services negotiations at the WTO , Save the Children<br />
UK (London, 2003) at p.16.<br />
142 See www.cbc.ca/fourth/deadinthewater/argentia2<br />
143 Loftus A. L. and D. A. McDonald, Of liquid dreams: A political ecology of water privatization in<br />
Buen os Aires , Environment&Urbanization, Vol 13 No 2, October 2001<br />
(www.queensu.ca/msp/pages/Project_Publications/Journals/Loftus.pdf). See also Hilary, John, GATS<br />
and Water, op. cit.<br />
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