This Just In!

As mentioned in the previous blog, Paraguay recently held presidential elections. Former Catholic Bishop Fernando Lugo was elected, breaking 62 years of rule under a single party.

For more information on the issues within the government of Paraguay and the new president, click here. Hopefully new political rule offers potential for improvement of the resources and quality of life for the people of Paraguay, such as increasing the much needed availability of water and sanitation.

-N

So, How Does it Work NOW? Looking at the Conflict

After decades of inadequate water and sanitation availability and access within the nation, the need for such resources has become undeniable and an unavoidable topic for electoral candidates. As shown in the following map, the percent of the population of Paraguay that is without access to safe drinking water is 51%-75% (as of 1998).




“Aquastat” sheet evaluating the use of water in Paraguay.

There are many participants in the conflict for access to safe and sufficient water supplies as a natural right, and not as a profit for corporations. As stated, the Public-Private Infrastructure Advisory Facility (PPIAF) has been working to privatize water in Paraguay, and especially Asuncion, and has worked with the government to fund consultations with companies such as Essap (formerly Corposana).

Check out the the Asuncion Metropolitan Area Potable Water Project Proposal!

Local Unions, Constituents (as corrupt as the government may be), and activist groups such as Sobrevivencia have been working to combat water privatization. Sobrevivencia in particular has been working toward the New Law on Water, which was passed by the parliament in June 2007.

The regulation of business and industrial activities of Paraguay are established by three ministries. The Ministry of Industry and Commerce, the Ministry of Finance, and Central Bank (Civil Code and Law 1034/83 provide more information). Each new regulation must be approved by each of the three ministries for regulation to be passed—according to the government.

President Nicanor Duarte Frutos was elected in April 2003 (with 38% of the votes ironically enough) and will serve until April 2008 (elections are currently taking place, as of April 21, 2008) and Duarte cannot choose a successor, or serve another term, so power is expected to shift. When Duarte was elected in 2003, he promised to cease the sale of state companies to privatized companies, such as four major companies that had been sold.

However, Jose Alderete was appointed the Minister of Public Works and Communication and Cesar Cruz Roa designated to coordinate the water and telecommunications reform program. Both have worked to develop case-by-case plans which would improve the efficiency of state-owned companies via contracts with private sector management and private capital participation. Although not technically sold to private companies, the management of “public” sectors is being contracted to be done mostly by private corporations.

The plot thickens...

-N

Putting Events in Perspective

Water Privatization and the history of water and sanitation in Paraguay reaches back over 30 years, when Asuncion first started to devote time and money to water supply and sanitation projects. Here's a time line to put the 30 years of utilities in perspective:

December 1977:

• First Rural Water Supply & Sanitation Project

June 1981:

• Second Rural Water Supply & Sanitation Project

Mid 1980’s:

• Only 50% of Urban and 10% of rural inhabitants had access to potable water (only 25% of the nation’s population).

September 1992:

• Third Rural Water Supply & Sanitation Project

1997:

• Corposana was providing inadequate water and sanitation, and the World Bank $40 million to fund a project to establish a national urban drinking water concession. The requirements were that money would only be spent in communities that would pay 25% of the start up cost and all of the maintaining costs. $11.6 million came from villagers and $4.1 million from Paraguayan government.

1999-2004:

• The World Bank reduced funding to Paraguay because of the nation’s failure to privatize their water and sanitation systems.

2000:

• The PPIAF and the World Bank funded consultation to develop options for a privatized contract with Corposana

June 2002:

• Local Unions stood up against Water Privatization and turned down proceedings.

2003

• Water Privatization became an election issue and political parties supported or opposed the issue. Nicanor Duarte opposed the Essap (formerly Corposana) contract and promoted a public sector.
• Nicanor Duarte then appointed Cesar Cruz Roa as coordinator of water and telecommunications reform program.

Summer 2004:

• Supporters of Water Privatization revamped the legislation promoted in 2002 and were met with 5,000 protestors.

September 2005:

• International Monetary Fund, the Paraguayan government’s back up, drew up plans to introduce privatized water, with Essap

November 2005:

• The World Bank funded an analysis of restructuring privatization options.

May 2006:

• Government signed a management contract with Essap (and 4 others) agree to take hold 12/2006 to privatize water.

June 2007:

• Due to opposition of Water Privatization, the “Law on Water” was approved by parliament.

And that leads to where Asuncion is now in 2008, battling the fundamental human rights violation of privatized water in the capital.
This is not a new conflict.

-N

The Real Story

Now, with all the historical turmoil that Paraguay has undergone a few more human rights violations don't seem like such a big deal. However, let's not take this situation lightly, for the privatization of water in the country's capital is not just a passing phase. This conflict has been a hot debate for years, and it's not settling down any time soon.

Let's start from the beginning...

What is privatization?

Well-- simply put: A basic definition for privatization in the water or sanitation sector involves transferring some or all of the assets or operations of public water systems into private hands.This does not necessarily mean the privatization of water resources themselves occurs because water services are seen as such a key public service. Proposals for privatization of them often evoke stronger opposition than for other sectors. Globally, over two-thirds of modern water and sanitation systems are publicly owned and operated.

For more information on the different types of Privatization Models: Click Here!

Apply this to water... this taking water and charging the public for how much they use. Water! The public will be charged for the water they drink, bathe in, wash their clothes in and use in cooking...

Here's the Story:

In Asuncion, Paraguay, the Public-Private Infrastructure Advisory Facility (PPIAF) had been working toward steering Paraguay towards water privatization even though there was popular resistance against it for ten years running.

In 1995, the World Bank began a sewerage project in Asuncion which would theoretically give more citizens would have access to sanitation. They sought to introduce private sector participation in water supply and sanitation. The World Bank has since reported that this project failed, but again, in 1999 they tried to convert it into "a vehicle for privatizing the water and telephone companies".

(The Paraguayan government changed its mind on whether to refocus the project solely on privatization and eventually the project failed to go ahead.)

This failure to proceed with privatization was one of the reasons that the World Bank reduced its funding in Paraguay between 1999 and 2004.

"Participation of private capital in public infrastructure, as evidenced by, for example, further expansion of water/sanitation services via existing minimum subsidy concession schemes with private operators; taking to point of transaction two PPPs in infrastructure investment."
-World Bank. (2004). Country Assistance Strategy for the Republic of Paraguay 2004/07. World Bank. Washington DC.

In December 2000, PPIAF paid $75,000 (US Dollars) with an additional $15,000 from the World Bank, to fund a consultant to develop options for a concession contract for the primary Paraguayan water utility Corposana.

The project also sought to build a consensus on the sector reforms with all the stakeholders, the government, Corposana, the private water providers, and consumer and business groups.

This consensus was supposed to be obtained through a 'participatory approach', but was at odds with PPIAF's assertion that the required outcome was the yielding of Corposana's urban water services to one or more private operators.

Corposana's name subsequently changed to Essap.

In June 2002, the concession plans were voted against by the Paraguayan senate, because local unions stood up against water privatization. It became an issue in the 2003 elections, when some candidates and parties were for the privatization and some parties were against it.

After promising not to sell any more state-owned companies, Nicanor Duarte won the presidential election and promptly announced there were no plans to award a private concession contract for Essap. Instead a plan was launched to reform the utility from within the public sector.

In February 2004, Jose Alderete, Public Works and Communications Minister, said that the government would be seeking World Bank investment to assist them with reforms in the water sector. BUT the World Bank was clear that privatization would be REQUIRED in order to receive any aid whatsoever.

"Some of the additional or deeper policy areas where the Bank has advised the administration to turn its attention ... include ... promotion of public-private partnerships for infrastructure development and maintenance through concession contracts for operation and construction, performance-based maintenance contracts and minimum subsidy concessions for expansion of water and sewerage."

-World Bank. (2004). Country Assistance Strategy for the Republic of Paraguay 2004/07. World Bank. Washington DC.

Over the summer of 2004, those in favor of privatization tried to revamp the policy that was voted down in 2002. Unsurprisingly, 5000 people protested through Asuncion against the law, and it was voted down again.

In September 2005, Business News Americas reported that in discussions over a new back-up plan with the International Monetary Fund, IMF: the Paraguayan government had to draw up plans to introduce private sector investment to four state-owned companies, including Essap.

Finance Minister Ernst Bergen was quoted as saying, "We are totally open to private sector participation, with the view that administration is passed to the private sector; so that the private sector has an interest in being involved in these companies."

Wait... what?

Two months later, PPIAF approved a new activity to assist the Paraguayan government in developing a new water strategy to enable the participation of local private sector operators in the country. Consultants paid with $175,000, with an additional $114,200 from other sources, would analyze options to restructure the utilities, and PPIAF funded activity also included building a stake-holder consensus for individual utilities.

In May 2006, a management contract for Essap, along with four other companies was proposed, and supposed to be active by December 2006.

Despite public protest, popular elections, and parliamentary votes, the IMF is still pushing water privatization in Paraguay, a process begun and re-launched by PPIAF.

Now, parliamentary members and civil society organizations, SOBREVIVENCIA (Survival) amongst them, are pressing for the final approval of a new law on water.

Check out this video!

This will guarantee access to water as a human right, and declare all water a property of the state.What exactly is the deal here? Consider the violation of rights in this situation.

Democracy is being trampled... and now, Asuncion has some of the highest prices for water in South America.

Drink it in...

-L

Welcome to Beautiful Paraguay!

This landlocked gem in South America boasts a rich variety of natural beauty and is the perfect spot for all those that love a little political spice in their heaping helping of scenery. In Paraguay, the energetic traveler encounters an untamed wilderness of marshes, lagoons, dense forests, jungles, national parks… not to mention the Chaco which is thought to be one of South America’s greatest wilderness areas. Oh, but there’s more! In Paraguay, you can learn about the Guarani Indians, see a jaguar or an alligator. Don’t forget the breathtaking waterfalls where the borders of Brazil, Paraguay, and Argentina come together either! Adventures abound!

As you scale the geographical borders of Paraguay, absorb the natural world while thinking about the year 1811 when this country achieved its independence and fell under a continued chain of oppressive, violent dictatorships. Take a deep breath and let the impact of the frequent, bloody wars that Paraguay has been involved in with its surrounding neighbors. The air is so fresh out here.

Let’s focus Paraguay’s capital Asunción, which is located on the Bay of Asunción which is an inlet off the Paraguay River.

Take a Taxi Ride!

On the way to the waterfront you can enter the old part of town, an area of architectural diversity. There are many parks and plazas left over from the Spanish grid system that colonized areas were built upon. How nice…

A good view of the city can be had from the Parque Carlos Antonio Lopez high above Asunción. The Botanical Gardens are situated in a former estate of the Lopez family on the Paraguay River, definitely worth a visit. There is also a golf-course and a small zoo. Yay! The Lopez Residence has been converted into a natural history museum and library, so you can get your read on.

Now let’s back up… Who is Paraguay?

Let's Look! (Techno Version!)

Indians speaking Guaraní—the most common language in Paraguay today, after Spanish—were the country's first inhabitants. In 1526 and again in 1529, Sebastian Cabot explored Paraguay when he sailed up the Paraná and Paraguay rivers. From 1608 until their expulsion from the Spanish dominions in 1767, the Jesuits maintained an establishment in the south and east of Paraguay. In 1811, Paraguay revolted against Spanish rule for independence and became a nominal republic under two consuls.

During the first 60 years of independence, Paraguay was governed by three dictators. Francisco López, Paraguay’s third dictator, waged war against Uruguay, Brazil, and Argentina in 1865–1870 In this conflict, half the male population was killed. A new constitution was written in 1870, designed to prevent dictatorships and internal strife was unsuccessful until 1912. It was in that year that a period of comparative economic and political stability begin. However, the Chaco War (1932–1935) with Bolivia won Paraguay more western territory.

After World War II, politics became particularly unstable. Alfredo Stroessner was dictator from 1954 until 1989, during which he was accused of the torture and murder of thousands of political opponents. Despite Paraguay's human rights record, the U.S. continuously supported Stroessner. (Of course…)

Stroessner was overthrown by army leader General Andres Rodriguez in 1989. Rodriguez went on to win Paraguay's first multicandidate election in years and thus, Paraguay's new constitution went into effect in 1992. In 1993, Juan Carlos Wasmosy, a wealthy businessman and the candidate of the governing Colorado Party, won a five-year term in free elections.

Raúl Cubas Grau was elected president in May 1998. In 1999, he was forced from office for his alleged involvement in the assassination of Vice President Luis María Argaña. The vice president had criticized Cubas for refusing to jail his mentor, General Lino Oviedo, who had been convicted of leading a failed 1996 coup against Wasmosy.

Luis Ángel González Macchi, appointed caretaker president after Cubas stepped down, was accused of mishandling $16 million in state funds, and former journalist Nicanor Duarte Frutos became president on Aug. 15, 2003. -->

He has pledged to clean up the pervasive corruption in his nearly bankrupt country. Paraguay has been in a protracted recession since the late 1990s.

This gives you a little more insight on to the type of leadership and government that has been established in Paraguay—Keep this mini-history lesson in mind as we explore the volatile human rights issues facing Paraguay, and in particular: Asuncion, Paraguay’s capital and largest city.

So as you pack up your backpack and check to see that you have your plane tickets to this scenic hot spot, browse through some more historical background, and create the TRUE picture of Paraguay in your mind—the Lonely Planet Guidebook will only present to you one side of this amazing country.

-L