Privatization of water resources in developing countries

Water Privatization

How Privatization of Water is Bad for the World

Water is a scarce resource, a fact that is becoming more evident as time goes on and pollution becomes more evident. There are many instances where privatization has been beneficial; bureaucratic red tape often makes policy making a headache for consumers, and some eagerly advocate for privatization of certain resources. Privatization often has advantages, but in many instances it also realizes many of the same disadvantages of many other political systems including customer complaints and scandals (Morris, 2006). When it comes to water, privatization can lead to the destruction of healthy drinking water, a lack of equitable access of drinking water, and a shortage of drinking water not just in third world countries, but in developed nations. Water is not a resource that can be privatized successfully; it is a resource that has to be standardized to be made safe, and one that basic human rights dictate must be made readily available to everyone.

Privatization 101

Privatization is not something new; it has existed ever since corporations have; it is a money game. Water is a resource that is readily available; it is a basic right, something that should be readily available for all of mankind. Private companies exist for the private man as a way to make money. They can "help" people, but only if it is in the best interests of their board of directors, and in the best interests of their shareholders. When push comes to shove, the private company is going to do what is best for the company, and not for the individual citizen. When a resource comes along that is valuable, something that is as essential to life as is water, then a company has the potential to make an enormous profit. Corruption is almost inevitable, because there is something at stake that is priceless, and that is human life. There is a great deal of power that is associated with something as great as water and life. This is something that is not always talked about when it comes to "human" resources, or the resource of water. But essentially this is what the privatization of water boils down to. There are many instances and examples where private companies have attempted to take over and control water, and have failed, demonstrated the inefficiency and potential harm privatization can have on water distribution. French companies and other foreign companies have had opportunities to distribute water in the states. Thus far, they have not done a very successful job of satisfying the American people, although no major calamities have occurred just yet. This is not the same in the UK, where there have been instances of poor quality drinking water, and contaminated drinking water distributed to the people in the UK. Morris (2006) points out that in Atlanta, GA residents noticed that "brown, brackish drinking water" became the norm after a French company named Suez started running the once owned public water system after purchasing a 20-year contract. In New Orleans public officials stated a French company was also to blame for discharging sewage into the Mississippi river multiple times which also lead to water contamination. In cases where water is contaminated, much more serious public consequences can occur. For example, water can carry very dangerous diseases, including E. Coli and cryptosporidium, which can be life-threatening illnesses. This is one reason why water quality management is so important. Once water-born illness spreads, it can be very difficult to get under control.

There are many other examples of how devastating water privatization can be. Macdonald (2009) notes that in 1999 Bolivia privatized water services in the country's third largest city, which resulted in angry street protest and violence. Part of the reason is that the cost of water skyrocketed, water was not readily made available to all people, and that water quality controls were not adequately measured and in place. This eventually resulted in the withdrawal of the private contract. AU.S. engineering company which was overseeing the project eventually had to leave the country due to the extent of the violence and protests. There has been much footage since then of the protests, and the extent of violence and the dangers associated with water privatization. Why is it so difficult to privatize the distribution of water? In recent years, private water companies have been spending more money, up to 1.5 million dollars and more on political campaigns, especially foreign private water companies (SERC, 2011). Perhaps foreign water companies are trying to gain political influence, an even bigger reason to share a concern over privatization of water Campaign spending "more than tripled between 1999 and 2002" (SERC, 2011). Clinton and Bush both deferred to more "state independence" suggesting states should allow more private sector outsourcing in water administrations, whereas in the past water regulations was "wholly the province of municipal government" (Vitale, 2001). Changes in tax laws are encouraging more privatization of water regulation, despite the statistics showing that privatization is not necessarily, beneficial to the public. In fact, industry reps are actually encouraging incentives to increase privatization, to help reduce the budget deficit. States are still increasing their efforts toward privatization, and it is likely that this trend will continue in 1st and 2nd world countries, given the current state of economic affairs.

There are many perils associated with water privatization as well. Typically, when it comes to water privatization, much of the management in private corporations is simply not equipped with the knowledge and skills necessary to perform the duties associated with operating a water management firm (Macdonald, 1999). Much of the time, there is a lot of corruption and inefficiency associated with the privatization of water, because water is such a valuable, and necessary resource for life; the potential for abuse is extreme. What often happens is that private companies consider capital and their profit margins over the considerations of what is best for the people; and for this reason water distribution and the best interests of the public go unchecked. If water is in the hands of the state, this is less likely to happen, because government officials have an obligation and duty to do what is right for the people that they govern.

Private companies are simply not able to keep up with the demand for clean water. Roughly 90% of local water distribution in most areas is government or state controlled according to Macdonald (1999). Even if the aquifers currently available are poorly run, the government provides clean water. This is not always the case with private companies distributing water. Roughly one sixth of the population still does not receive clean water however (Macdonald, 1999). Given this, there is a lot of interest in privatization according to some. There are some organizations and lobbyists that think private corporations could do a better job of distributing the clean water that is available. The problem is that clean water is becoming a scarcer resource, and many feel that private companies will simply charge more for the clean water that is available, making it even more implausible that it will be available to the people that need it most, causing even more problems. In the near future, studies suggest that as the world population continues to grow, and global warming becomes an ever-increasing problem, more people than ever are going to need clean water. In fact, there are going to be more and more people inhabiting regions of the world where water is already in short supply, and inhabiting areas where there is "water stress" (Macdonald, 2009). The Organization for Economic Co-operation and Development says that more water will be necessary to quench the world in the next two decades and yet the world can barely keep up with the demand that is necessary even now. The supply of water that is available in aquifers throughout the world is already "dropping rapidly" according to many researchers and environmental experts, but most people are not in a place at present where they can or are willing to pay more so that they can pay for repairs to water gathering or sustaining resources (Macdonald, 2009). For the most part, many people who have access to clean water right now simply do not realize what valuable resource water is.

Promotion of Privatization

Who are the faces behind privatization? Typically they are large companies looking to make money. Consider pharmaceutical companies that take advantage of sick people looking to churn a profit. Sick people require medicine; healthy and sick people require water. There is no real difference. A corporation sees that they can make money from people, from humanity, so they jump on the opportunity. They have no obligation to the consumer; they have an obligation to their board of directors, and to their shareholders. The concept is roughly the same. They are the companies looking to make profits. Proponents of privatization state they can offer a more efficient system. However this for the most part is an illusion; privatization will drive the cost of water so high that it will become even scarcer to populations that can hardly afford to pay for water already. One of the groups already contributing to the problem is bottled water companies that pollute the environment by storing water in plastic bottles, and take water from the supply in rapidly dwindling aquifers. This use of water reduces the amount of water resources available and reduces according to some people's belief in the government's ability to produce safe water resources. It promotes people's confidence in water privatization.

Water privatization has been attempted in the UK and other European regions as well, and has been met with failure. In the UK, privatization was met with bankruptcy and public outcry. A company named Yorkshire Water amassed "colossal debts" while struggling to make a profit; the company like many others proposed many solutions to their problems, but like many other private water companies in the region, failed to pay sustainable dividends to customers, and failed to provide adequate clean water. Unlike public water agencies, the company failed to have the ability to charge reasonable prices for water, failed to provide clean water, and failed to engage in honest business. Many of the private water companies in the UK are "regularly prosecuted" because they consistently pollute the rivers in the country. Companies like Vivendi and Suez-Lyonnaise have been cited for dumping raw sewage in fact into the marina at Dorset. One can only imagine the environmental impact such actions have. Other agencies have been cited for outbreaks of diseases including cryptosporidiosis; still others include a failure to reduce the level of pesticides and other chemicals. This is not something that private companies have had problems with alone however. Public water agencies also struggle to keep water clean. However, one of the biggest arguments private companies have is that they can provide "cleaner" water than public agencies. However time and time again studies show that private companies are no better than government agencies at providing clean water, as evidenced. In fact, there is information suggesting that private companies are much worse at attempting to keep clean water clean. This is sometimes because of "lax" standards and the increase in sewage flow in sewers that increases the load on treatment. A study of the UK in early October of 2000 showed that the risk of raw sewage flooding into homes was high. According to one study the North West Customer Service Committee mentioned how "several cases of sewer flooding recently occurred due to sewers unable to cope with sudden increase in water volume during heavy storms" and blamed the government, stating that they did not make "elimination of sewer flooding a statutory obligation of water companies, meaning private water companies (Lobina & Hall, 2001).

Why Government Should Regulate Water

There is much debate as to who should regulate water. In the states, there is debate as to whether states or the government should regulate water. The answer is "both." If states regulated water alone, there would be a tremendous amount of variation in clean water legislation, because states could randomly select adequate "safe" pollution levels. There are many different levels of how safe water pollution is, and many states have various levels of biodiversity, meaning plant and animal life. National regulations with a European type union framework would ensure that all states are operating cohesively to ensure that everyone has access to the same water quality and that pollutants were regulated within the scope of a national framework. This in turn could be translated into an international framework for global water sanitation. Water is something that is a global or international problem. It is not something that is limited to one nation or one nation-state. Water is something that seeps into the ground and is easily transmitted from one place to another. It evaporates into the air and therefore travels to the air into air quality and pollutants. Thus, it is something that should be considered from an international and not simply from a national vantage. Wind carries air and rain, which also becomes the water that people end up drinking. Water or rainwater goes into the ground which eventually becomes the water that people drink, or the water that flows into rivers and lakes. It is critical that standards are set that are safe for human beings everywhere. Humans are generally the same, so what is safe for a human being in one place will generally be safe for a human in another.

It isn't enough to simply set standards however, they need implementation and enforcement. This is why privatization of water isn't something that will work. With privatization, there is no reason to enforce certain standards. Private companies have no one to report to but themselves. The bottom line in privatization is how much money is going into the corporate entities bank account, and how much money the CEO and shareholders receive. Thus, one party or parties benefit. However, in the case of government, in idealized democracy, the government has to report to the people. If people begin rioting and complaining because the water is polluted, then people are going to rebel and fight back until they receive the water they need. What private companies may not realize is that polluted water brings many things, including disease. If water is not properly regulated than the spread of disease may become rampant. Once that happens, it will become a lot harder to control disease and provide clean water. It is better to prevent a problem than to fix a problem once it starts.

There are some liberals that argue having the government regulate water is much like having governments regulates carbon dioxide. They fear that if organizations like the Environmental Protection Agency regulate too much, they will become like commandos. Many people are afraid of water regulation, believing that if governments regulate the water they will have too much power over the people. If that is the case, they will at the very least argue in favor of the governments setting standards for water quality. If they do this however, who will be in charge of maintaining those standards? Water quality control is essential to life. Someone has to be held accountable for maintaining the quality of water. The government's role is not to control water, but to ensure the public has adequate access to safe, clean water to drink and to use otherwise. Sometimes people become too concerned that the government is taking too much control. They should be more concerned that private companies are attempting the very same thing. When private companies gain control of water resources, historically statistics suggest they begin charging excessive amounts for a resource that for all intents and purposes should be free to consumers.

Water is a life-promoting and life giving resource. All human beings require safe, clean water to live. The human body is largely made up of water. To fail to provide free and clean water is a crime. When privatization of water occurs in first and second world countries, one can only imagine the damage being done in developing countries where water is already in short supply. First and second world countries have an obligation to set a standard and an example for other developing areas of the world. Providing sanitary water is a human right. Governments have an obligation to set standards and implement quality controls regardless of whether they are democratic, socialist or otherwise regulated. All people have a right to (1) food and (2) access to clean water. In life, people first seek out the basic essentials, which include the things that will make them feel secure. These typically include a roof over their head, food, and access to water. When these things are denied, families become separated, children die. Riots occur. There are now over 1.1 billion people in the world today. Massachusetts-American, a U.S. Water Works subsidiary, made the cost of water more than double under just less than five years, stating they needed to raise the cost to provide a new treatment facility, however evidence suggests they did this just to increase their profit margin (SERC, 2011).

Water Solutions

One way to put a stop to privatization is to lobby for the right to water. Nations must come together and insist that the right to water is a basic human right. Many people argue that any effort against privatization is a good impetus that will support access to water. The move toward democracy is a movement that may help improve access to water in many regions. In regions where there is a great disparity among the wealthy and the poor the influence of money in the electoral system can result in more privatization. However even in the United States the tide is changing where more and more anymore we see greater levels of wealth inequality where the wealthy are receiving more breaks and this is resulting in greater benefits for the wealthy which is depriving citizens of their basic rights, including their rights to water and other essential needs. This is evidenced in GA where a large private water contract was defeated; however in the years following the water and sanitation system was cut off in a large area where customers had fallen significantly behind in payments because the areas was not supported by public funding. This was largely the result in tax cuts for the wealthy, and cuts in federal funding for things including sanitation in state and local infrastructure. There are many problems in the government today many that need to be addressed.