-------- Original Message --------
Subject: IMF Loan Conditions for Nicaragua Require Privatization Measures That Would Enrich Corporations at the Expense of People
Date: Thu, 05 Dec 2002 08:48:29 -0500
From: "Dennis Roy" <[EMAIL PROTECTED]>
For Immediate Release: Contact: Sara
Grusky (202) 454-5133
Dec. 4,
2002 Erica
Hartman (202) 454-5174
IMF Loan Conditions for Nicaragua Require Privatization Measures That
Would Enrich Corporations at the Expense of People
Conditions May Violate Nicaraguan and U.S. Law
WASHINGTON, D.C. - Loan conditions expected to be imposed on Nicaragua
today by the International Monetary Fund (IMF) could result in bulk
water exports and higher consumer water prices, enriching corporations
at the expense of the Nicaraguan people, according to a network of
citizen groups working to oppose water privatization measures in
Nicaragua.
Despite widespread opposition to the prospect of a corporate takeover
of Nicaragua's vital water resources, the executive directors of the IMF
were to vote on new conditions that require Nicaragua to sell its major
hydroelectric dams and the state hydroelectric company called Hidrogesa.
The IMF has pushed forward with these loan requirements despite a law
passed unanimously in August by the Nicaraguan National Assembly that
suspended all private concessions involving water uses until a national
regulatory framework could be established.
"IMF loan conditions should not contradict the unanimous decision of
the Nicaraguan National Assembly to suspend private concessioning of
water," said Sara Grusky of Public Citizen's Water for All campaign.
"Has the IMF told President Bolaños of Nicaragua that he must override
the decision of the National Assembly in order to qualify for new loans
and debt relief?"
The new law stemmed from concerns about corruption and the lack of any
regulatory framework governing water use by whatever private company
would run the hydroelectric facilities. The law safeguards the country's
water resources until further notice, although the IMF would, in effect,
supercede the national law if it approves the new loan conditions
today.
"The IMF is taking an Olympic leap over the laws of our country
including our Supreme Court, the Comptroller General's Office, the
National Assembly and our constitution," said Ruth Herrera, a
representative of the National Network in Defense of the Consumer, a
Nicaraguan organization. "One has to ask if any of our democratic
institutions will be respected." Herrera and Public Citizen are working
with Centro Humboldt, Centro de Estudios Internacionales, and Centro
Nicaraguënse de Derechos Humanos in Nicaragua, as well as the Quixote
Center, Nicaragua Network and Latin America Working Group in the United
States.
The privatization process has been fraught with alleged corruption and
irregularities. Early in 2002 - before the IMF loan conditions - Enron
bid to buy the hydroelectric dams. But when Enron failed to comply with
conditions of the sale, the contract was transferred to Coastal Power of
Texas. However, the bid was so low, estimated at only 20 percent of the
plant's value, that the comptroller general of Nicaragua began a review
of the process. This incident prompted the National Assembly to pass the
water law.
In addition to violating Nicaraguan law, the new IMF loan conditions
contain requirements that violate U.S. law by imposing user fees for
Nicaraguan children to attend schools. The new agreement will require
the government of Nicaragua to implement "school autonomy" legislation
that reduces national government funding for schools. Only parents who
can afford the fees for textbooks, supplies, uniforms and other items -
costs known as user fees - will be able to send their children to
school. If approved, this would violate U.S. law; in November 2000,
Congress passed legislation requiring the U.S. executive director at the
IMF to vote against any loan that includes "user fees" for education or
health.
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Public Citizen is a nonprofit consumer advocacy organization based in
Washington, D.C. For more information, please visit www.citizen.org.
