The World Bank in Armenia

Every year, the World Bank lends billions of dollars for water sector projects in the developing world. The projects it finances, to deliver public water through private corporations, have a track record of leaving communities dry while transnationals reap unsightly profits. In the months ahead, Corporate Accountability International will be documenting cases from across the globe like this story from Armenia.

In 1998, the World Bank granted Armenia $30 million to upgrade the water supply in its capital city of Yerevan, provided that it hand over the public water utility to a transnational corporation. Despite massive subsidies, the private operator failed to improve basic water delivery in Yerevan. A parliamentary investigation discovered that through a series of crooked deals the corporation misappropriated an estimated $35 million from the Armenian people and amassed over $50 million in debt. Today, water flows from the tap only a few hours a day, and residents live in fear of outbreaks of water contamination. The World Bank refuses to recognize the corruption, and instead continues to insist that the project — and the private contractor — surpassed all expectations.

"This case raises difficult questions about the legitimacy of development projects all over the world where so-called 'public-private partnerships' are involved, said Patti Lynn, campaigns director. “The World Bank’s complicity in corruption calls the whole of the Bank’s water lending into disrepute,” said Patti Lynn, campaigns director.

Corporate Accountability is calling on the Bank to use its publicly-supported coffers to finance public water projects.