Italy withdraws from controversial World Bank privatization fund

May 22, 2007 -- Campaigners today celebrated the decision by the Italian government to withdraw its support from the Public-Private Infrastructure Advisory Facility (PPIAF), a highly controversial element of the World Bank's water privatization agenda, on the eve of PPIAF's annual meeting of donors in The Hague, the Netherlands.

Announcing Italy's withdrawal in a message to the International Civil Society Forum Stop water privatisation -- Alternatives to the PPIAF, Vice-Minister Patrizia Sentinelli of the Italian foreign affairs ministry said:

"Water is not a commodity and we have to work to remove it from the logic of privatization. I think it is crucial to have an international debate on the negative consequences of the push for privatization in sectors so sensitive that touch upon our common goods. For this, I thought it appropriate in this moment to withdraw the participation of the Italian Development Cooperation from the Public Private Infrastructure Advisory Facility.

"I hope that this political signal will, together with that of other governments, reopen international debate on these issues. These discussions should be courageous enough to look at the effects on the ground of international policies in a world which is more and more our common world. And I hope that most of you will be open to support a broader objective such as agreeing on a universal declaration of water as a human right within the framework of the United Nations."

Italy thus becomes the second nation in recent months to formally withdraw from PPIAF, following Norway's exit in February. This follows a major campaign by civil society around the world. Just last week, 138 NGOs and trade unions from 48 countries issued an open letter to donors of PPIAF demanding that they withdraw funding from PPIAF's water program and instead fund progressive public alternatives.

Elena Gerebizza of the Campagna per la Riforma della Banca Mondiale in Italy welcoming the decision said, "We welcome the courageous move of the Italian government. There are better ways to use limited development aid resources than paying consultants to push privatization in poor countries. We will encourage the Italian government to withdraw from other World Bank initiatives and to instead spend public funds on effective pro-poor programs. It is outrageous that donors continue to channel public aid money into initiatives that promote private sector interest at the expenses of the poorest in the world."

Vicky Cann of the World Development Movement said, "Coming on the eve of the annual get-together for PPIAF donors, the importance of the Italian withdrawal is clear. Activists in 48 countries are demanding that the remaining donors to PPIAF now follow Italy's lead, including the UK which has given it nearly £50 million from the aid budget in the past 8 years."

Campaigners argue that PPIAF's aid-funded consultancy programs undermine the rights of poor countries to decide how to run their public services. PPIAF has funded projects in many poor countries where international financial institutions like the World Bank and the International Monetary Fund have attached water privatization conditions to loans, debt relief or aid.

Campaigners are particularly critical of PPIAF's funding for 'consensus-building' projects which try to persuade stakeholders in developing countries to accept water privatization.

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Also see:
-- Vice Minister Patrizia Sentinelli's statement on the Italian government's withdrawal from PPIAF
-- "Norway abandons water privatization"
-- "Private participation in water: Toward a new generation of projects?"
-- "Analysis of Power Projects with Private Participation under Stress"

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