Norway withdraws support from controversial World Bank fund

PRESS RELEASE -22 February 2007

Norway has decided to pull out of a controversial World Bank fund that actively promotes water privatisation in developing countries. Norway has contributed $2,85 million to the Public Private Infrastructure Advisory Facility (PPIAF) since 1999.

During a meeting with the Norwegian Ministry of Foreign Affairs yesterday, representatives of the Norwegian NGO, the Association of International Water Studies (FIVAS) and the British advocacy group, World Development Movement (WDM), heard that Norway’s contributions to the fund would cease on the 30 June 2007.

WDM and FIVAS have published a new report entitled Down the Drain: How aid for water sector reform could be better spent that investigates the activities of PPIAF and shows how the fund actively promotes water privatisation by the use of consultants. This is despite the fact the strategy of water privatisation is widely acknowledged to have failed, particularly for the poor.

The report also criticises the fund’s consensus building activities which involve persuading sceptics and opponents in developing countries to accept the benefits of water privatisation. The authors consider this interference in recipient countries’ ability to conduct a free and democratic debate on the issues. Torbjørn Urfjell, the political adviser for the Minister of Development, Erik Solheim, said during the meeting that the Ministry of Foreign Affairs no longer viewed the fund as a means to solve the problem of access to water for the poor. The decision can also be seen as following the intentions of the Government’s Action Plan for Environment in Development Cooperation that wishes to see water as a common good, said Urfjell.

“This is good news,” said Andrew Preston, director of FIVAS. “We’re not talking about a large amount of money in development terms, but it’s nonetheless an important and correct decision. We hope this will send a signal to other donor countries, and not least the World Bank itself, that there are better ways of using aid funds.” The report Down the Drain recommends alternative ways of increasing access to water for the poor. The report suggests financial support to strengthen the public sector through increased cooperation between public water operators.

For more information, contact:
Andrew Preston, FIVAS, Norway fivas@fivas.org +47 22 98 93 25
Vicky Cann, WDM, London Vicky@wdm.org.uk +44 020 7820 4900