Case studies of privatization: A backlash

Case studies of privatization: A backlash

The Jakarta Post, Jakarta

One of the strongest arguments in favor of water privatization is
the widespread inability of public utilities in the developing
world to provide clean water.

As pointed out by the World Bank's senior water adviser John
Briscoe in The New York Times last August, public utilities are
"heavily overstaffed, provide poor quality, are unwilling or
unable to invest, with not enough money to serve everybody".

At present, some one billion people do not have access to
clean water, two billion others are suffering from an inadequate
supply of clean water, and every year three million people die of
water-borne diseases.

In big cities, the clean water supply decreases 40 percent for
a variety of different reasons.

By 2025, as the world's population grows to eight billion, the
United Nations expects the number of people suffering from an
inadequate supply of clean water to grow to five billion.

However, case studies in several countries show that private
enterprise appears to be no panacea for this problem.
Privatization, according to the studies, turns water into a
profit-oriented business and hampers the poor's access to clean
water.

Critics say that with their main responsibility to their
shareholders, it is unrealistic to expect private companies to
assume the financial risk of supplying water to portions of the
world's population that may not be able to afford it in the first
place.

The economics of water have become so highly charged that vast
numbers of people have staged protests in Argentina, Bolivia,
Ecuador, Panama and South Africa.

Residents of Tucuman province in Argentina have demanded that
a French multinational company go home. They accuse the company
of only raising the price of water without making any new
investments.

"Any investments they made were with government money," said
one resident.

Critics say the company, Vivendi Environnement, recklessly
pursued the contract to break into the market and that most of
the problems it has encountered were of its own making.

One Argentinean academic has accused Argentina's political
leadership of cynically permitting the public utilities to
deteriorate, so that voters would embrace privatization.

Daniel Azpiazu from the Latin American School of Social
Sciences in Buenos Aires said that in a haste to privatize,
regulatory bodies and oversight authorities were rarely
installed.

In Bolivia, the price of clean water rose a whopping 300
percent when a California-based multinational company took over,
forcing many families to spend a quarter of their total earnings
just for clean water.

Research from the International Labor Resource and Information
Group shows that the governments of African countries, through
the New Partnerships for Africa's Development (Nepad), have
violated the public's right to basic necessities, including clean
water.

Ever since Nepad adopted the principle of privatization,
international corporations have competed for water rights,
resulting in reduced access to clean water for the poor.

Given all this, the natural question is should water, a
substance so close to life, be a profit-oriented business?

"Water is a resource essential to life," Hannah Griffiths of
the environmental group Friends of Earth said.

"Decisions about allocation and distribution should be
democratic and based on everyone's fundamental right to a clean
and healthy supply."