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Context of '1997: High Debt Harms Nicaraguan Economy'

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testtest [Source: test] (click image to enlarge)The population of Buenos Aires grows from 3 to 9.5 million. During this time, the city’s public water and sewage utility company, Obres Sanitarias, is hit with a number of budget cuts recommended by the IMF and World Bank, and cannot afford to implement the needed upgrades and improvements. By the late 1980s, it is apparent that the utility will need a huge infusion of capital to extend its services to the new inhabitants of the city. [Public Citizen, 6/14/2007] Less than two thirds of the city’s population is connected to the water system while less than half has access to the sewers. Moreover, up to 50 percent of the system’s water is lost because of leaks. As a result, the per capita consumption of water is an extremely high 600 liters per customer. [Inter Press Service, 4/13/1993; CBC News, 3/31/2004] The World Bank steps in and offers to lend Argentina hundreds of millions of dollars to upgrade the city’s water infrastructure—but only on the condition that it privatize Obres Sanitarias. [Public Citizen, 6/14/2007] Critics of the privatization plan will later argue that despite its lack of cash-on-hand, Obras Sanitarias was a “well-run company” with little debt and was capable of expanding on its own—had it been sufficiently funded. [Santoro, 2/6/2003]

Entity Tags: Obres Sanitarias de la Nacion, World Bank

Timeline Tags: Water

1997: High Debt Harms Nicaraguan Economy

Nicaragua is crippled by its $6 billion debt, which at $1,300 per capita, is the highest per capita debt in the world. [Oxfam, 10/1998]

Timeline Tags: US-Nicaragua (1979-)

Haiti uses more than 90 percent of its foreign reserves to pay $32 million in debt service to its international creditors, requiring Aristide’s government to end fuel subsidies and slash spending on health and education programs. Haiti’s debt is of dubious legality, however, as the London-based Haiti Support Group explains: “Haiti’s debt to international financial institutions and foreign governments has grown from $302 million in 1980 to $1.134 billion today. About 40 per cent of this debt stems from loans to the brutal Duvalier dictators, who invested precious little of it in the country. This is known as ‘odious debt’ because it was used to oppress the people, and, according to international law, this debt need not be repaid.” The debt payment increases public dissatisfaction with Aristide’s administration. [Dollars and Sense, 9/7/2003; CounterPunch, 3/1/2004; London Review of Books, 4/15/2004]

Entity Tags: Jean-Bertrand Aristide

Timeline Tags: Haiti Coup, US-Haiti (1804-2005)

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