WORLD: Private Sector 'Not the Answer to Poverty'

Rich countries must deliver more money directly to poor nations to avert a growing health and sanitation crisis spreading across the southern hemisphere, Oxfam will say today.

The global charity said investment in health care, water, sanitation and education must be delivered by governments rather than the private sector.

Belinda Calaguas, the head of policy at WaterAid, which produced the report jointly with Oxfam, added: "There are more than a billion people living without access to clean, safe water and 2.6 billion people have nowhere to go to the toilet. That leads to the inevitable spread of water-related diseases which claim the lives of 6,000 children every day."

The report condemned the World Bank for forcing privatisation or inappropriate private sector projects on developing countries, and criticised Western governments for signing up to the so-called Washington agenda.

It said the scale of the problems in areas such as sub-Saharan Africa was so vast it could be solved by direct government action - in the same way the industrialised world tackled its own health and water issues in the 19th century.

The report said it was a "scandal" that people were still living without basic services. It said in a single day, 4,000 children are killed by diarrhoea, a disease caught from dirty water; 1,400 women die needlessly in pregnancy or childbirth; and 115 million school-age children, most of them girls, do not go to school. It would cost an extra $47m (£25m) a year to meet the goals set by the UN to be achieved by 2015.

Barbara Stocking, the director of OxfamGB and a former regional NHS director, said: "The key message is that this can be done. The amount of money is not huge." Oxfam said that developing countries would only achieve healthy and educated populations if their governments took responsibility for providing essential services.

The report said: "Rich-country governments and international agencies such as the World Bank should be crucial partners in supporting public systems but too often they block progress by failing to deliver debt relief and predictable aid that supports public systems.

"They often use their influence to push private-sector solutions to public service failures and see increased involvement of the private sector as the key to increasing efficiency and improving services."

Tanzania scrapped its contract last year with Biwater, a UK company, that had been a condition of a World Bank loan, because of erratic supplies and water shortages. Oxfam said while the UK had taken a strong stance in favour of free provision of services such as health in its White Paper this summer, it was disappointed that, as the second biggest contributor to the World Bank, it had not taken a stronger role in changing policy at the Washington-based lender.

Max Lawson, a policy adviser at Oxfam, said a leaked draft of the bank's 10-year strategy included private sector provision and charging for basic health care. He said: "The UK Government should take a strong stand with allies in Europe to put pressure on [Bank president] Paul Wolfowitz to stop pushing this agenda."

The UK's Department for International Development said the private sector could play a "major role" in delivering economic growth and good public services. It defended the use of conditions on aid, saying they ensured it delivered real benefit.

"But we need the 'right kind' of conditionality, which should not be used to impose specific policy choices on poor countries," a DfID spokeswoman said. "Both the IMF and World Bank have committed to work closely with governments to ensure the conditions used in their programmes are drawn from national strategies and reflect national priorities."

The World Bank said it could not comment until it had seen the full report but would discuss the issue with Oxfam at its meetings in Singapore this month.

The billions in need

1bn people have no access to clean and safe water; 2.6 billion lack lavatory facilities

4,000 children die every day from diarrhoea, a water-borne disease

1,400 women a day die needlessly in pregnancy or childbirth

$2 charge for rural health clinics was abolished by Zambia after its debts to the IMF and World Bank were cancelled and the UK increased its aid budget

4.25m more health workers are needed globally. There is also a shortage of 1.9 million teachers

$47bn extra a year is needed to hit targets on education, health care, water and sanitation - less than 5 per cent of the global weapons budget

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