Recent years have seen a region‐wide movement throughout Latin America and the Caribbean toward wider private participation in the provision of infrastructure, as well as in other public services. This paper discusses the possible benefits from the privatization of water services and illustrates the range of alternatives available for private participation in their provision. These alternatives are analyzed and their possible application in Latin America and the Caribbean is assessed on the basis of examples from the region and other parts of the world. However, the paper does not discuss, in any detail, the theoretical justifications for the movement back to a market system in the provision of public services.
Traditionally, in most countries of Latin America, the management of water and water based services has been highly centralized in the public sector. Recently, as the role of government has been reconsidered, many services have been transferred to lower levels of government or to the private sector. At the same time, the emphasis given to water projects as basic development tools has given way to the environmental significance of good water management. Consequently, the approach to water resources management has been modified and space created for the adoption of some of the basic precepts enunciated in the Mar del Plata Action Plan and Agenda 21. In particular, in various countries consideration is being given to water management through river basin institutions.
Financing investments in water supply and sanitation has been a perennial problem in all countries of Latin America and the Caribbean. The contribution to capital funding derived from the income of operating companies has been very small, a direct consequence of unrealistically low tariffs. The situation has worsened with the increasing need to provide sewage treatment to reduce the gross pollution of most water bodies in the vicinity of large cities. This paper, on the basis of recent studies conducted in EC LAC, explores the practicability of the self‐financing of water supply and sanitation services, including sewage treatment, through the income derived from tariffs. If this is to be achieved then it is important that the entire population pays for services, an issue of some importance given the unequal distribution of income in most cities of the region. The conclusion reached is that on the basis of the available information on costs, together with the experience of some countries, financing through tariffs is feasible, particularly if subsidies are provided to the poorest households. Tariff based financing is probably the only means of achieving universal coverage by the year 2000 as well as sewage treatment, the rehabilitation of existing systems, maintenance and the necessary institutional development.
Crecimiento, justicia distributiva y política social Andrés Solimano L Equidad, inversión extranjera y competitividad internacional Adolfo Figueroa Tensiones en el ajuste estructural en América Latina: asignación vs. distribución
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