Helping end hardship with privatisation…

Date: 11/05/06

The EU provides 40% of all development aid received by Latin America and the Caribbean, giving the Union considerable clout in the fight against poverty in the region. Some EUR 1.3 billion in aid administered by the European Commission has been earmarked for Latin America in 2003-06.

Benita Ferrero-Waldner, the commissioner for external relations, has nonetheless recognised that her institution could be doing more to ease hardship. Last month, she presented new EU proposals on Latin America and the Caribbean to a Brussels conference. The proposals say that the promotion of greater social equality needs to be accorded a higher priority in the EU's aid to Latin America and the Caribbean.

"It is clear that economic growth alone will not bring about more cohesive societies," she said.

The proposals are being debated by anti-poverty campaigners meeting at an 'alternative summit' in Vienna this week (10-13 May).

Some activitists suggest the proposals do not alter the perception that the EU's overriding objectives in Latin America are to promote the interests of European businesses, rather than those of the poor.

More than 200 million out of Latin America's 500m population live below the internationally recognised poverty line of $2 a day. In the Caribbean, the proportion of people living below the poverty line varies from 8% in English-speaking countries to 65% in Haiti.

Roelien Knotterus from Transnational Institute, an Amsterdam-based organisation, criticised the Commission's proposals for a goal of a Euro-Latin America free trade area by 2010. "This shows that the EU's priority is market access, not development co-operation," Knotterus added. "There is little evidence that such increases in trade can lead to poverty alleviation."

Camilo Tovar from the Latin American Association of Development Organisations (ALOP) urged the Commission to give an assurance that it would not demand water privatisation during talks on achieving the free trade area.

Gérard Karlshausen, president of Concord, a Belgian network of relief agencies, said that the EU's approach to Latin America was influenced by the World Bank, which critics claim made finance to poor countries conditional on their pursuit of privatisation.

The activities of French water giant Suez in countries such as Bolivia have been widely criticised in Latin America. Bolivia's President Evo Morales has been one of the critics. Suez has been accused of keeping the price of connecting to a water supply out of the reach of the poor and of heavily lobbying EU policy-makers to convince them to support privatisation.

Yet Gérard Payen, head of the International Federation of Private Water Operators (AquaFed) and a former vice-president of Suez, said recently that the duty of all water firms, both public and private, was "to make the right to water effective".

A World Bank official said that privatisation was "not our goal in itself but privatisation might be the path to make something happen" in specific cases.

Article takes a look at EU aid for the fight against poverty in Latin America and the Caribbean.
Article is part of a European Voice Special Report, 'EU-Latin America'.