Latin America counts among the regions, where privatisation took place earlier and in a more radical way than elsewhere. Already in the 70s, countries like Chile, Argentina or Uruguay became the venue of market radical “reforms” that were implemented with the most brutal force. Roughly 20 years later, it was again Latin American countries that made a talking point of themselves by a ruthless squandering of public property.

An important role in this sell-out was played by foreign indebtedness that was used by the creditors as a lever to force the governments of the indebted countries to privatise and sell out their natural resources and businesses. Following data by the World Bank, privatisation results reached by the developing countries rose from less than five billion US Dollars per year in the 80s to over 20 to 30 billion per year in the years 1991 to 1996 and to over 60 billion in the year 1997. Following statistics by the conference of the United Nations for trade and development (UNCTAD), developing countries since the middle of the 80s have sold businesses in a value of over 730 billion US Dollars to foreign investors.

The sale of public property was organised by corrupt oligarchies in cooperation with institutions such as the International Monetary Fund, whose structural adjustment programmes were geared precisely to the interests of the rich creditors. As against that, the poor population majority needed to carry the consequences of the neoliberal privatisation and savings policy that excluded more and more people from supply with necessary goods.

End of the sell-out: the pendulum swings back

That the Latin American population would no longer accept the sell-out of its resources without resistance showed itself already in the mid-90s, when in parallel to the conclusion of the North American free trade agreement (NAFTA), it came to a revolt in the North American province of Chiapas. Since then, the old elites in many countries have come under pressure or rather been replaced by left governments. Now, in particular Venezuela under Chávez, Bolivia under Morales and Ecuador under Correa stand for an ambitious programme that aims at a re-appropriation of natural riches and resources that are needed for the financing of comprehensive social and educational programmes. In contrast to moderate left governments such as in Brazil under Lula or Argentina under Kirchner, they risk a break with the power and property relations up to now and accept a conflict with the Western great powers and companies.

Learnt nothing? The Latin America policy of the EU

Despite all the differences between Lula, Kirchner and Chávez, they have in common wanting to overcome the relationship based on dependence and exploitation to the USA and Europe. The influence of European and US American companies, whose share in the total turnover of the largest 500 businesses in Latin America has shrunk from 29 percent (2000) to 25 percent, is reduced correspondingly. In parallel, the state share among the top 500 has risen in the last six years from around a third to 45 percent.

The strategy pursued by the EU of extending the predominance of North American and European companies also received massive dampers by Latin American countries who no longer wanted to consent to an opening of their markets to the over-powerful producers of the North, Thus the project massively advanced by the USA of an all-American free trade zone (ALCA) in November 2005 came to an at least temporary stop. Similarly, the attempts by the EU to conclude an agreement with the South American trade association Mercosur lie at this point on ice.

However, these mishaps also have not led to a basic change in strategy, as shown by the current efforts of the EU to conclude association agreements with trade policy emphasis both with the Andean community as well as with the Central American states. The EU continues to wage unwaveringly on the liberalisation of even the most sensitive services, where their demands even go beyond those raised in the framework of the World Trade Organisation (WTO). Among other things, the EU asks for an opening of markets in the water, energy, transport, and telecommunications area. The degree of success of these negotiations cannot be surmised at this point. After all, there are within the Anden community with the pro-liberalisation countries of Columbia and Peru, on the one hand, and the opponents of liberalisation Bolivia and Ecuador, on the other side, diametrically opposite positions. It is unclear as well, which role Venezuela is going to play, which after its exit from the Andean community has just applied for re-entry. As far as the conduct of the negotiation is concerned, the EU has already announced that it puts its stakes as before on far-reaching secrecy. Bolivia, by contrast, has decided to make the negotiations transparent and that way more controllable from the outside.

With popular petitions against privatisation

That the population in Latin America is no longer willing to accept decisions that ignore their interests without a struggle can be observed in many places.

Example of Bolivia: After the multinational Bechtel Corporation had taken over the water supply in Cochabamba and had tripled the water prices in the briefest time, there erupted, in 2000, general strikes and uprisings that finally resulted in Bechtel’s retreat.

Example of Uruguay: There, in October 2004, 64 percent of the population in October 2004 voted for a constitutional reform that explicitly prohibits the privatisation of water.

Example of Columbia: There, the city Bogotá recently bought itself out of a contract with the French water multinational Suez. Of course, this cost 80 million Dollars; however, this was still cheaper for the city then the tenfold exaggerated prices of the company.

Interesting as well is the current example of Brazil: There, roughly 200 NGOs tried to challenge the privatisation of Brazil’s largest mining enterprise, Companhia Vale do Rio Doce (CVRD). The second-largest mining company of the world, with a market capital of 110 bln. U.S. $, was sold already under the Cardoso government (1995-2002) for a meagre 3.3 bln. U.S. Dollars – even though it was worth about 40 bln. US Dollars. The social movements now want to obtain by way of a popular referendum that this privatisation be declared nil and void in retrospect. They refer in that to a judgment from the year 2005, which declared the privatisation of a state enterprise invalid due to “irregularities”.

Learn from Latin America…

Of course, you may compare the situation in developing countries with that in this country only to a limited extent. The times where privatisations could be pushed through almost without notice, are gone in Europe as well. The experiences one makes with private investors are too bad. Example, Berlin: There the water prices in the meantime count among the highest in Europe. The reasons are dubious secret contracts that were concluded in the framework of partial privatisation in 1999 with the companies Veolia and RWE and that guarantee the companies a hefty profit. Now a popular referendum is underway that like in Brazil demands elucidation of the circumstances of the privatisation in order to obtain the nullification of the contracts. As the examples from Latin America clearly show, privatisations are not a natural law and may be corrected. What is necessary for that is resolve and political pressure from below.