The Role of Water Privatization in the World-Wide Water Crisis

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Tue Jan-06-09 11:00 PM
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The Role of Water Privatization in the World-Wide Water Crisis

�Although the earth is awash with water, the world is facing a global water crisis. Global freshwater supplies are dwindling fast. Climate change, rapid urbanization, environmental degradation, the growth of industries that either pollute water sources or consume vast water volumes� climate change and our very modern lifestyle are contributing to an increase in demand that outstrips supply. For instance, Lake Chad has shrunk to 20% of its size in 1962� It is expected that inter-state violent conflict in the future will be waged to secure water supplies.� � from a review of the book �World Water Crisis � A Challenge to Social Justice�

There are currently about 1.1 billion people in the world without access to safe drinking water, plus an additional 1.5 billion people without access to adequate water sanitation. Consequently, estimates of annual deaths due to water-related diseases range from 2.2 million to over 5 million � mostly children.

The problem threatens to get a lot worse, due to world-wide population growth, increasing use of water for agricultural and industrial purposes, and global warming. Increasing use of water for agriculture is depleting freshwater from underground aquifers faster than it can be replenished. Increasing industrial use of water is polluting surface water supplies, thereby making them unsafe for human consumption.

Some aspects of the problem create a vicious cycle. One of the most important, if not the most important means of controlling population growth is the education of women. Yet, in water scarce regions of the world women spend so much time gathering and hauling water that they have no time left over for education.

Although the world contains enough safe drinking water today to supply all the people of the world, grossly unequal distribution means that much of the world lacks access to it. This map shows that while more than 90% of the population of the United States, Canada, Australia and Western Europe has access to adequate water sanitation, less than 50% of the population in Sub-Saharan Africa and Southeast Asia has such access:

Geographically, water use varies in the same general proportion. This chart shows that, while the average use of water by the inhabitants of the United States and Europe is many times the United Nations recommended basic minimum, the average use in Africa is well below the basic minimum:

WATER PRIVATIZATION

The fundamentals of water privatization

The shortage of water, like a shortage of any commodity, presents opportunities for profits, which are enabled by lack of government regulation, which allow for the driving up of costs. Marion Ronan, an Associate Professor of Contemporary Theology, explains the basic fundamentals of water privatization, and the role that certain kinds of governments play in this process:

Increasingly, services previously provided by communities or non-profit organizations � education, health care, corrections, and now energy and water services � are being taken over by private corporations and sold as commodities� The goal of this system is to privatize all aspects of �The Commons,� the physical, social, cultural and genetic resources that have long been considered the shared property of the human race�.

Central to this assault is the attempted privatization of public institutions and enterprises that have traditionally provided water and sanitation to communities�. Needless to say, corporations enter into �public- private partnerships� in order to maximize profits, though they are often rationalized as more efficient than public utilities. The privatization of water almost invariably results in an increase in water rates for consumers.

Yet water privatization increases steadily, in large part because governments lack the capital to maintain deteriorating water infrastructures, especially in the developing world. Ironically, though corporations enter into privatization schemes to earn profits, such
schemes are almost always partially funded by governments and private lenders like the World Bank who at the same time guarantee profits to the corporation providing the services. Even in the face of unsatisfactory corporate performance, governments contracting with corporations risk being sued if they attempt to terminate a contract.

We might assume that governments would therefore be cautious in entering into such contracts, and would work, instead, to decrease industrial and personal water waste and ecological degradation fundamental to water scarcity. Yet many governments seem primarily committed to corporate investments. Some call these governments �corporate states�.

Facilitators of water privatization

Bottled water
Problems with bottled water are that it is unnecessary, expensive, very bad for the environment, and plays an important ideological role in preparing people for the privatization of water, in a manner similar to how school vouchers provide a drain on the public school system. Ronan explains:

Bottled water is, according to the US Natural Resources Defense Council, between 240 and 10,000 times more expensive than tap water and often less safe. The bottles themselves cause significant harm to the environment during and after manufacture. In addition, the extraction from aquifers of water for bottling uses up limited and sometimes irreplaceable groundwater resources and damages nearby rivers and streams. Most harmful of all, however, is the role of bottled water in weakening citizens� confidence in public water systems and thus preparing them for the privatization of those systems and massive rate increases.

International lending institutions and structural adjustment programs
The role of international lending institutions in keeping poor countries subservient to the needs of multinational corporations is explained as well as I�ve ever seen it explained in Naomi Klein�s book, �The Shock Doctrine � The Rise of Disaster Capitalism�.

The International Monetary Fund (IMF) and the World Bank � both very much under the control of the United States � loan money to impoverished nations that are desperate for it, imposing conditions on those nations which work to keep the great majority of its inhabitants impoverished indefinitely. The process is something akin to loan sharking or indentured servitude. Since the governing elites of those nations usually profit from the deal, they have some motivation to play along with it.

The underpinning for the whole system is right wing economic ideology of the type first put forth by Milton Friedman. The country where Friedman�s economic theories were first put into practice was Chile, in 1973, following the CIA sponsored coup, which ousted Salvador Allende and replaced him with the brutal dictator, Augusto Pinochet.

Friedman�s disciples, who are known as �The Chicago Boys�, after the University of Chicago where they learned their economic theories, had been working hand in glove with Pinochet for some time before the actual coup took place. So they were plenty ready to put their theories into place as soon as Pinochet came to power. Klein describes how that worked out:

In 1974, inflation reached 375 %. The cost of basics such as bread went through the roof. At the same time, Chileans were being thrown out of work because Pinochet�s experiment with �free trade� was flooding the country with cheap imports� Unemployment hit record levels and hunger became rampant� Chicago boys argued that the problem didn�t lie with their theory but with the fact that it wasn�t being applied with sufficient strictness.

So Friedman flew to Chile to visit Pinochet himself, and he advocated even harsher measures. Eventually he convinced Pinochet to fully institute his �reforms�:

Friedman advised Pinochet to impose a rapid-fire transformation of the economy � tax cuts, free trade, privatized services, cuts to social spending and deregulation� It was the most extreme capitalist make-over ever attempted anywhere, and it became known as a �Chicago School� revolution� Friedman predicted that the speed, suddenness and scope of the economic shifts would provoke psychological reactions in the public that �facilitate the adjustment�. He coined a phrase for this painful tactic: economic �shock treatment.�

This caused even more severe distress for the Chilean people. But eventually, 15 years after he came to power, the economy �stabilized�.

International trade agreements
Marion Ronan explains that international trade agreements, by making governments to a large extent subservient to global corporations, contribute greatly to the privatization of water and sanitation. She explains:

Regional trade agreements like the North American Free Trade Agreement (NAFTA) and the Free Trade Area of the Americas (FTAA) seriously undercut the power of governments to restrict the importation and exportation of water, no matter how harmful that trade may be to humans or the environment. Bilateral trade agreements� also seriously endanger the democratic rights of citizens to control water and other parts of the Commons in their own country.

An egregious example of water privatization wreaking havoc on a community

Antonia Juhasz, in her book, �http://www.google.com/search%3Fhl%3Den%26q%3Dthe%2Bbush%2Bagenda%2Bjuhasz%26btnG%3DSearch&sa=X&oi=print&ct=title&cad=one-book-with-thumbnail">The Bush Agenda � Invading the World One Economy at a Time�, describes an especially egregious example of how a corporate state, allied with a ruthless corporation, and with aid from an international lending institutions, can wreak havoc on a community:

Cochabamba is the 3rd largest city in Bolivia� In late 1999, the World Bank required that Bolivia privatize Cochabamba�s water in return for reduction of its debts. Bechtel � one of the top ten water privatization companies in the world � won the contract.

Immediately after Bechtel took over the Cochabamba water system, and before any of the promised investments in infrastructure were made to improve or expand services, the company raised the price of water� by 100%... Many were simply forced to do without running water� The same law that privatized the water system also privatized any collected water, including rainwater collected in barrels�

The majority of the people voted for the cancellation of the contract with Bechtel. When this demand was met with silence from government officials, the citizens went on a citywide strike� the Bolivian government defended Bechtel�s right to privatize by sending armed military troops into the streets to disperse the crowds. At least one 17-year-old boy was shot and killed and hundreds more were injured�

SOLUTIONS

Marion Ronan notes that �The potential exhaustion of the world water supply in the coming decades can be reversed only by coordinated action on the part of governments and communities��

Probably the most basic step towards that goal is to obtain world-wide consensus that water should be considered a basic human right. As Rudolf Amenga says:

Water must be recognized as a public good and a human right, not as a commodity to be traded for financial gain in the open market.

Political action against globalization

Since the international trade agreements and lending institutions associated with today�s version of globalization is a major part of the problem, attacking that process is necessarily a big part of the solution. Ronan describes previously successful efforts in that realm:

The international anti-globalization movement is a major nexus of political action against privatization, including the privatization of water services, forced on poor nations by the international lending and trade organizations. Beginning with the Seattle WTO meeting in 1999� protests by large numbers of anti-globalization activists have succeeded in attracting media attention and at the very least making those meetings difficult�

The �Water War� in Cochabamba, Bolivia, is perhaps the best known instance of such resistance. After the Bolivian government, under pressure from the World Bank, leased Cochabamba�s water system to Bechtel in 1999, the people of Cochabamba rose up, under the leadership of�. a coalition of peasants, environmental groups, teachers, and blue- and white- collar workers. After four months of struggle, including attacks on protestors by police and military, the coalition forced the Bolivian government to void the Bechtel contract�

Replacing corporatism (i.e. fascism) with democracy

Corporatist states and the multi-national corporations that seek to privatize the world�s resources go hand in hand to a very large extent. And it must be recognized that the use of an electoral process to elect a nation�s representatives is no guarantee against a corporatist state. Whenever wealth inequality and the influence of money in the electoral process are great, the dynamics are set up to favor the creation of a corporatist state. Such is what we see in the United States of America today, where levels of income and wealth inequality have reached levels not seen since the Gilded Age. This has led to and been reinforced by a situation where large tax cuts for the wealthy have received priority over providing for the basic needs of our citizens.

An example of this is what happened recently in Atlanta, Georgia. When US water activists pressured the city to cancel the largest private water contract in the country, that was thought to represent a victory. However, less than two years later, the city began to shut off the water and sanitation services for one quarter of its customers � those who had fallen behind in their payments. The underlying problem was severe rate increases, necessitated by a lack of public funding, which in turn was largely the result of the Bush tax cuts for the wealthy, which led to cuts in federal funding for state and local infrastructure.

Education

Some nations, the United States being probably the biggest and most important example, have been for so long inundated with �free-market� propaganda that the ideological climate makes anti-privatization efforts difficult. Yet even in the United States, most citizens are in favor of national universal health insurance. That is a remarkable fact, given the long-standing ferocious propaganda of our nation�s conservative elite to equate any efforts against privatization of vital resources or services with the �slippery slope towards totalitarian Communism�.

The phenomenon of water privatization may present an important potential for meaningful education of the American and other publics. If the American people consider adequate health care to be an inalienable right, then certainly they would feel the same way about water, which is more necessary to health than is health care. People need to understand that when vital natural resources become privatized the stage is set for pricing those resources out of the range that many or most people can afford.

It is also worth while to point out that on a world-wide basis, the world�s water crisis falls disproportionately on women and girls because they are usually the ones who end up having to spend so much time on gathering and hauling water. Marion Ronan suggests:

Materials on water-related gender disparities are available on the World Wide Web� In educational work in developed countries, it can be effective to begin a session on water shortage by having participants carry a bucket of water some distance� This helps them to imagine a life of water-hauling.

Ronan goes on to explain how places of religious worship can be an excellent setting for educating people about the dangers of water privatization and the need for community and government control over and support for water supplies. She gives an example from her own teaching experience:

I have found the commitment to justice for the poor in the Hebrew and Christian scriptures a solid foundation from which to address this crucial issue. I often begin my classes with the passage in Matthew 25 in which the gathered multitudes say� �Lord, when was it that we saw you thirsty and gave you something to drink?� And Jesus replies, �Truly, I tell you, just as you did it to one of the least of these who are members of my family, you did it to me�.

CONCLUSION

I�ll end this post with a quote from Maude Barlow, one of the world�s foremost water-rights activists:

Water crises pose the greatest threat of our time to the planet and to our survival. Together with impending climate change from fossil fuel emissions, the water crises impose some life-or-death decisions on us all. Unless we collectively change our behavior, we are heading toward a world of deepening conflict and potential wars over the dwindling supplies of freshwater � between nations, between rich and poor, between the public and the private interest, between rural and urban populations, and between the competing needs of the natural world and industrialized humans.