How the World Bank’s ‘Payday Loans’ Are Increasing Dire Water Shortages in Latin America By Barbara G. Ellis, Ph.D.

In midst of global warming’s frightening and growing droughts, increasing shortages of water resources in Latin America are being exacerbated by World Bank (WB) million-dollar loans to unstable governments desperate to rise out of poverty by attracting global industries to exploit their irreplaceable natural resources. And most use millions of gallons of water to do it whether it’s fossil-fuel fracking requiring 2,500,000 gallons per well or gold/silver corporations dumping cyanide and other death-dealing chemicals into waterways which millions depend on for drinking, household use, irrigation, or fishing.

The WB’s hand is involved in the latest trend for corporations exhorting—and extorting—African governments such as Zimbabwe to install pre-paid water meters. As one correspondent noted recently:

Despite U.N. recognition that water is a human right, international financial institutions such as the World Bank argue that water should be allocated through market mechanisms to allow for full cost recovery from users.

As for those WB-funded multi-million dollar hydroelectric dams that constrict water supplies, they are built to provide electricity for foreign industries, not for impoverished Latino households. The WB’s hand additionally touches those households when water rates climb to astronomical 60-200% hikes because its loan conditions to governments too often mandate privatization. WB loans also are tied to military massacres of thousands in water-related protests because having given foreign corporations free reign to plunder resources, governments are then forced to protect them against their own people.

The situation has become dire because climate change is projected to adversely affect the globe’s remaining 0.007 percent of potable water, according to the most recent study by the United Nation’s Intergovernmental Panel on Climate Change (IPCC). What little remains for the developing-country poor has been significantly diminished by such multinational corporations, indirectly supported by the WB. Their policies and practices in the last decades of the Bank’s 71-year history have betrayed its stated primary purpose:

Investment loans provide financing for a wide range of activities aimed at creating the physical and social infrastructure necessary for poverty alleviation and sustainable development.

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