I saw an ad in a magazine for a bank touting that they had helped a small city in a third-world country build water treatment facilities. The intention of the ad was clearly to show the bank as a positive contributor to society with a philanthropic mindset. But the text of the ad revealed that the bank provided financing to the city government. Given that the economy in a third-world country is weak, the bank easily could have afforded to donate money for the facility without taking a significant hit to their bottom line. But they chose to loan the money instead.
Water is a basic requirement of life, so people without it are desperate and willing to take any deal. A struggling government – unable to purchase supplies and hire skilled workers on their meager budget – takes out a huge loan from a “generous” bank at a steep interest rate, and suddenly the population is indebted to a bank for years to come. Like the American housing bubble where banks loaned to people who couldn’t possibly hope to repay those loans, the same banks are now doing this to desperate governments. And when those governments need to make costly repairs, or their population increases and they need larger facilities, they’ll go back for another loan.
Not only are these communities taking out loans, they are turning to private companies to install plants and operate their water infrastructure, permanently setting up a privatized system for a life-sustaining resource. Those private companies can then raise the prices at-will to increase their margins, with little to no accountability to the people. This isn’t philanthropy and it’s not sustainable.
So the next time you look at such an ad where a corporation “helped” a group or country in dire straits…did they really? Or were they just looking for a profit, and hypocritically spinning it to seem like they were the good guys?
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