3.9.07

Water and Development - Global Issues

Water and Development - Global Issues
Anup Shah

Much of the world lives without access to clean water. Privatization of water resources, promoted as a means to bring business efficiency into water service management, has instead led to reduced access for the poor around the world as prices for these essential services have risen. This article looks into this issue in further detail below.

Introduction—A Water Management Crisis Leading to Lack of Access to Safe Water for Much of the World

Consider the following:

  • The 2006 United Nations Human Development Report, focusing on water, notes the following:
    • Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation.
    • Almost two in three people lacking access to clean water survive on less than $2 a day, with one in three living on less than $1 a day.
    • More than 660 million people without sanitation live on less than $2 a day, and more than 385 million on less than $1 a day.
    • Access to piped water into the household averages about 85% for the wealthiest 20% of the population, compared with 25% for the poorest 20%.
    • 1.8 billion people who have access to a water source within 1 kilometre, but not in their house or yard, consumpe around 20 litres per day. In the United Kingdom the average person uses more than 50 litres of water a day flushing toilets (where average daily water usage is about 150 liters a day. The highest average water use in the world is in the US, at 600 liters day.)
    • Some 1.8 million child deaths each year as a result of diarrhoea
    • The loss of 443 million school days each year from water-related illness.
    • Close to half of all people in developing countries suffering at any given time from a health problem caused by water and sanitation deficits.
    • Millions of women spending several hours a day collecting water.
    • To these human costs can be added the massive economic waste associated with the water and sanitation deficit.… The costs associated with health spending, productivity losses and labour diversions … are greatest in some of the poorest countries. Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceeds total aid flows and debt relief to the region in 2003.
    (See pages 6, 7, 35.)
  • 400 million children (1 in 5 from the developing world) have no access to safe water. 1.4 million children will die each year from lack of access to safe drinking water and adequate sanitation (State of the World’s Children, 2005, UNICEF)
  • A mere 12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World. (Maude Barlow, Water as Commodity—The Wrong Prescription, The Institute for Food and Development Policy, Backgrounder, Summer 2001, Vol. 7, No. 3)
  • “Already, corporations own or operate water systems across the globe that bring in about $200 billion a year. Yet they serve only about 7 percent of the world’s population, leaving a potentially vast market untapped.” (John Tagliabue, As Multinationals Run the Taps, Anger Rises Over Water for Profit, New York Times, August 26, 2002)

Already some one third of the world’s population is living in either water-scarce, or water-short areas. It is predicted that climate change and population growth will take this number to one half of humanity. Yet, as Maude Barlow has commented, it is not necessarily over-population causing water shortages: “12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World.”

The United Nations appears to concur:

We reject this [Malthusian perspective that global water problems are a problem of scarcity and population growth]. The availability of water is a concern for some countries. But the scarcity at the heart of the global water crisis is rooted in power, poverty and inequality, not in physical availability.

— 2006 United Nations Human Development Report, 2006, p.2

Indian scientist and activist, Vandana Shiva noted in a documentary that the water crisis is a human-created crisis only in the last two or so decades. In other words, it is not so much of a water shortage crisis, but a water management crisis. That documentary was World Without Water, from True Vision Productions broadcast by Britain’s mainstream media channel, Channel 4 on April 29, 2006.

The main reason for the water crisis, the documentary implied, is the commoditization of water. By promoting water as a commodity, this has led to increased control of water by multinational corporations. In turn, there has been increased fear that the poor are shut out, because the MNC’s main responsibility is to shareholders and to increase profit. As a result, though there may be many people in terms of market access, many people are too poor to afford it. The World Bank, IMF and others have encouraged countries around the world to privatize water access in the hope for increased efficiency as well as follow other policies such as removal of subsidies for such provisions. In doing so, the poor have found themselves being shut out as prices have risen beyond affordability.

The documentary traced the struggles of

  • A family in Bolivia living just behind a water plant, unable to afford the 9-month salary equivalent connection charge [highlighting the issue of access inequality and water access privatization];
  • Poor Indian farmers in Rajasthan facing water shortages and worse because the Coca Cola company had taken so much water from nearby wells and aquifers [highlighting the issue of need versus luxury];
  • Tanzanian people’s struggles with water privatization, and even the struggles of the poor in the world’s richest country, the United States [highlighting water resource commoditization and privatization versus water as a human right with universal access].

Around the world, the documentary noted, water access issues are reaching crisis point, similar to the ones they highlighted in detail.

Coca Cola vs. Indian Farmers: Luxury vs. Necessity

The documentary’s look at Coca Cola (Coke for short) company’s activities in India highlighted problems also seen around the world. Because Coke had been pumping water from local wells and aquifers, this led to farmers digging deeper and deeper to search for water, sometimes under dangerous conditions. Some farmers were digging as deep as 450 feet without finding water. The documentary noted that they wanted Coke to leave for they brought them nothing but misery. Indeed, earlier in 2000, violent protests by farmers in the state of Kerala led to the closure of Coke there.

The documentary also noted that for each liter of drink from Coca Cola, some 3 liters of water was needed.

When asked, Coke noted all the activities they were pursuing to be a more responsible neighbor. Coke also claimed that government figures showed they did not cause the drop in water levels, yet those figures showed otherwise. They also noted that agriculture is responsible for more water usage than Coca Cola. While this is partly correct, this applies more to industrial agribusinesses, not small farmers.

Furthermore, farmers are arguably using the land for more productive (and necessary) purposes than Coke. In addition, Coke, typical of many global companies, have used the lands (and, in this case, water) of the poor countries, to produce products to be mainly consumed by people in wealthy countries.

Privatization in both rich and poor countries can mean many cannot access safe water

In Tanzania, the documentary noted the hardships and struggles of the poor when the country followed rich-country and World Bank advice and privatized their water services. In a region where currently 11 million lives are at risk from water shortage, these policies are having serious impacts. Privatization led to increased prices and lack of access, rather than increased access.

In Bolivia, even though much of the major city covered by the documentary was connected up by the global water company, the poor could not afford the connection charges. Some 200,000 people in that city—a quarter of the population—were not connected. (The French company that owned the water services there said in the documentary that the poor “chose” not to be connected.) Numerous health and social problems developed, especially for the children and the poor were resorting to illegal connections. (We can often see such actions by poor as being “illegal”, but when the system itself encourages such last-resort actions and “corruption” we hear less of that aspect.)

In Detroit, USA, the documentary noted that the poor in the richest country in the world were also affected by similar global problems. Like families in Tanzania, many African Americans in Detroit were finding they needed to make daily trips to get water. The documentary followed the struggle of a woman who had fallen behind on her water bills because her disabled husband’s medical bills had grown so much. Yet, some 40,000 households (some 100,000 people) in Detroit were facing water shortages in similar ways, simply for being too poor to afford the bills. In this particular case, city officials were also accused of running down the water service so that it could be privatized and thereby reduce their accountability.

Water Access Policy: Following Neoliberal Ideology

The documentary then turned to the question of where the idea of privatization of such a vital resource came from. In short, Neoliberlism—as also detailed on this site’s section on free trade and globalization—was pushed by Britain’s Margaret Thatcher, USA’s Ronald Reagan and others, around the world. The World Bank and other international institutions took on this ideology, and encouraged privatization of most resources. In other words, they attempted to put a price on everything, even if it was not appropriate (e.g. health, education, and, possibly, water, amongst other services).

But it was not just conservative political parties pushing such ideologies. As also noted on this site’s neoliberalism section, economic ideology and political ideologies, though extremely related are also different in various ways. As a result, Britain’s Labour Party for example, also changed to become “New” Labour and supported privatization around the world. In Tanzania and elsewhere, they have used foreign aid budgets to pay for privatization (where British companies benefit) and even fund television advertising and popular songs that promote privatization. Furthermore, pressure is put on third world countries to privatize with favorable terms for private companies (including full guarantees in case of problems (i.e. bail out by the poor country’s tax payers). This again questions our common perceptions of corruption.

Separate from the above-mentioned documentary, The World Development Movement campaign organization (WDM) reported in 2005 that “British aid money is being used to push water privatization on poor countries PDF formatted document—making it less likely that clean water will ever get to the poorest people. And while poor people lose out, a group of big UK companies are profiting from this aid.” This, the organization says is being done through four main ways:

  1. Expensive consultancies (which a lot of that aid money goes to paying for and these groups have a vested interest in pushing for privatization);
  2. Public relations campaigns (to get the poor to accept privatization of water);
  3. Direct funding for privatization; and
  4. Via conditions imposed by the IMF and World Bank.

Predictably then, price hikes have been witnessed around the world, accompanied by public protests. The documentary noted the irony of the efficiency that private companies were supposed to bring to the provision and functioning of this service. One of the various examples given was where people had their water cut off but were still billed for many months for water they could never have used. Intermediary water sellers in Tanzania, for example, found business to be booming, because there were so many poor people unable to afford the privatized service and turned to them instead, and they also hiked up prices. Around the world, stories have been similar. Many poor people have also ended up working even more than they already do, unnecessarily.

In Tanzania, the documentary highlighted the courage of the Prime Minister Edward Lowassa, who after 18 months, became disillusioned by the British and World Bank-encouraged privatization. He complained to the documentary that the multinational corporations were only interested in profit. While the MNCs said that independent reviews were positive, the documentary revealed those same reports actually showed otherwise. Senior British staff were told to leave. “Think again before you privatize [water],” President Lowassa warned; It is “dangerous.”

Privatization vs. Democratic Accountability of Management of a Fundamental Resource

The above-mentioned documentary noted that the World Bank argues that the problem is not privatization itself, but that privatization is not being practiced properly.

Yet, the market-based paradigm for such a vital resource has come under question. The earlier-mentioned WDM report as well as the documentary noted that the goals of a responsible government (universal access), and the goals of a private company (profit, typically by providing access to those who can pay) implies that private sector efficiency for profit may not mean that same efficiency will lead to universal access.

Certainly, there are cases where markets have provided innovative ideas and efficiency in management. This typically requires a market where people that can pay for the service. For universal access, however, (which includes people who may not be able to pay, for a variety of reasons, and may require subsidies or assistance), a solely market-based privatization may be inappropriate.

The United Nations Human Development Report, focusing on water, weighs in on this too, and adds:

Some privatization programs have produced positive results. But the overall record is not encouraging. From Argentina to Bolivia, and from the Philippines to the United States, the conviction that the private sector offers a “magic bullet” for unleashing the equity and efficiency needed to accelerate progress towards water for all has proven to be misplaced. While these past failures of water concessions do not provide evidence that the private sector has no role to play, they do point to the need for greater caution, regulation and a commitment to equity in public-private partnerships.

Two specific aspects of water provision in countries with low coverage rates caution against an undue reliance on the private sector.

  1. The water sector has many of the characteristics of a natural monopoly. In the absence of a strong regulatory capacity to protect the public interest through the rules on pricing and investment, there are dangers of monopolistic abuse.
  2. In countries with high levels of poverty among unserved populations, public finance is a requirement for extended access regardless of whether the provider is public or private.

— 2006 United Nations Human Development Report, 2006, p.10 (Numbered list formatting is mine)

For poor countries, as argued elsewhere on this web site, pursuing neoliberal ideology too early goes counter to experiences from history; today’s wealthy countries did not prosper following these policies. They only used these policies once a market-based economy was already established and society had sufficiently developed.

Problems of privatization of water are many PDF formatted document the WDM adds. For example,

  • Alternatives are often not considered. Those private consultancies often follow a privatization ideology and they of course stand to win money from it. A major problem is that it is the government of the poor country left to pick up the pieces of failed privatization projects PDF formatted document.
  • Privatization of such vital resources (a right for all to access even if they do not have money) risks losing democratic accountability, and as cases in Bolivia, Argentina, Chile and elsewhere have shown, soaring water prices as a result can lead to many, many people not affording a basic right, and even spark massive unrest;
  • Profits from a private company can also be siphoned off elsewhere (often to other countries from where the company came) to their shareholders, and less is reinvested into the system itself;
  • Investment is likely only on those parts of the system that may bring profit, leaving the government with less resources to deal with the other parts of the system;

Earlier in 2001, the Institute for Food and Development Policy (also known as Food First) suggested that economic globalization is largely to blame for this water crisis. As if to turn around the World Bank’s point that privatization is not being practiced properly and more of it is needed, Food First counters that it is democracy not being practiced properly, so we need more democracy and democratic accountability, rather than less. The increased commoditization of a basic necessity and a public service “reduces the involvement of citizens in water management decisions.” Furthermore,

These companies argue that privatizing water is the best way to deliver it safely to a thirsty world. This is yet another area of potential disagreement. It is true that governments have done an abysmal job of protecting water within their boundaries. However, the answer is not to hand this precious resource over to transnational corporations who have escaped nation-state laws and live by no international law other than business-friendly trade agreements. The answer is to demand that governments begin to take their role seriously and establish full water protection regimes based on watershed management and conservation.

— Maude Barlow, Water as a Commodity—The Wrong Prescription, Institute for Food and Development Policy Backgrounder, Summer 2001, Vol. 7, No. 3

Water: A Human Right or a Commodity?

The fundamental question this documentary raises then is whether water is a fundamental human right, or a commodity; a privileged service that you can only access if you can afford it.

Article 25 of the United Nations Declaration of Human Rights—the premier human rights doctrine that practically all nations have signed up to—notes the following:

“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of ... circumstances beyond his control.”

— Universal Declaration of Human Rights, United Nations, December 10, 1948

While water is not mentioned explicitly, the right to food includes water as well, because water is essential for humans to live, and is therefore in line with the principles of the declaration.

Water and Environmental Issues

Along with access issues comes use issues. The Coca Cola example noted above highlighted one issue of luxury versus needs. Another issue is the efficient (or inefficient) use of water in industrial agriculture, factories and plants.

It takes a great deal of water to manufacture our goods:

  • 1 newspaper takes 150 gallons
  • 1 liter of orange juice takes 1000 gallons
  • 1 pound of beef takes 2500 gallons
  • 1 new car takes 40,000 gallons

— WaterDoc.org, Hart Productions Inc, 2005

Food First, mentioned above, charges that “While transnational corporations over-exploit water resources as they expand industrial and agricultural capacity, they pollute the water table through pollution or overuse. Meanwhile developing countries—under onerous lending requirements enforced by the World Bank—have had to aggressively export their way out of debt, devastating watersheds and placing water supplies in danger.” Quoting them further, and at length:

In the race to compete for foreign direct investment, countries are stripping their environmental laws and protection of natural resources, including water protection. In some cases, such as the world's 850 free trade zones, they either look the other way as environmental laws are broken and waters are criminally polluted or actually set lower standards in these zones than for the rest of the country.

Throughout Latin America and Asia, massive industrialization in rural communities is affecting the balance between humans and nature. Water use is being diverted from agriculture to industry. Huge corporate factories are moving up the rivers of the Third World, sucking them dry as they go.

Agribusinesses growing crops for export are claiming more of the water once used by family and peasant farmers for food self-sufficiency. The global expansion in mining and manufacturing is increasing the threat of pollution of underground water supplies and contaminating the aquifers that provide more than 50 percent of domestic supplies in most Asian countries.

To feed the voracious global consumer market, China has transformed its entire economy, massively diverting water use from communities and local farming to its burgeoning industrial sector. As the big industrial wells consume more water, millions of Chinese farmers have found their local wells pumped dry. Eighty percent of China's major rivers are now so degraded, they no longer support fish. Economic globalization and the policies that drive it are proving to be totally unsustainable.

— Maude Barlow, Water as a Commodity—The Wrong Prescription, Institute for Food and Development Policy Backgrounder, Summer 2001, Vol. 7, No. 3

(Some further examples of unnecessary/wasteful uses of water are described or hinted to in this site’s section, Behind Consumption and Consumerism.)

Climate Change and Water Security

Climate change is going to increase water security:

Many of the world’s most water-stressed areas will get less water, and water flows will become less predictable and more subject to extreme events. Among the projected outcomes:

  • Marked reductions in water availability in East Africa, the Sahel and Southern Africa as rainfall declines and temperature rises, with large productivity losses in basic food staples. Projections for rainfed areas in East Africa point to potential productivity losses of up to 33% in maize and more than 20% for sorghum and 18% for millet.
  • The disruption of food production systems exposing an additional 75–125 million people to the threat of hunger.
  • Accelerated glacial melt, leading to medium term reductions in water availability across a large group of countries in East Asia, Latin America and South Asia.
  • Disruptions to monsoon patterns in South Asia, with the potential for more rain but also fewer rainy days and more people affected by drought.
  • Rising sea levels resulting in freshwater losses in river delta systems in countries such as Bangladesh, Egypt and Thailand.

— 2006 United Nations Human Development Report, 2006, p.15

Future wars over water?

For a number of years now, we have heard of predictions that future wars will be fought over control of essential resources, such as water. To some extent, most wars have already been about that. However, in terms of water itself, some experts question this prediction. Inter Press Service (IPS) notes a number of experts disagree with the view that future wars will be over water, and instead feel it is mismanagement of water resources which is the issue, not scarcity (which is the underlying assumption for the prediction of such wars.)

That same IPS article quotes Arunabha Ghosh, co-author of the United Nations Human Development Report 2006 themed on water management who says, “Water wars make good newspaper headlines but cooperation (agreements) don’t.… there are plenty of bilateral, multilateral and trans-boundary agreements for water-sharing—all or most of which do not make good newspaper copy.”

Others have noted that there are many more examples of cooperation than conflict in regions with shard water interests. The Stockholm International Water Institute opines that “10- to 20-year-old arguments about conflict over water are still being recycled.”

At the same time there have been various incidents that fuel the fear of water-related wars, such as Israel’s recent bombing of the Lebanese water pipelines from the Litani River to farmland along the coastal plain and parts of the Bekaa Valley, and the conflict in Sri Lanka where the rebel group diverted a canal.

Other examples that might be worth watching include the Panama canal as that country considers nationalizing it, the North West Passage through Canada’s northern polar region that is now opening up more due to climate change, which the US argues should be an international water way, and various others that may affect water dependency further up or downstream (e.g. between India/Pakistan, Israel/Jordan, various Nile-dependent countries throughout northern, eastern and central Africa).

The Stockholm International Water Institute also argues that “Such arguments [for water wars] ignore massive amounts of recent research which shows that water-scarce states that share a water body tend to find cooperative solutions rather than enter into violent conflict,” which may offer hope that conflicts do not arise, at least not due to water resources.

Maude Barlow, in a short interview also raises the concern of geopolitical issues with water. She notes that places such as United States, China and Europe are all seeing water as a national security issue, whether it be for access, management or shortage. Control and access to water will also be important for their industries, as well as for people’s consumption:

Maude Barlow, Water Stress, May 12 2007, © Big Picture TV

International Agreements and Action

Access to fresh water is becoming a political problem, rather than a technical one, with lots of questions on the best way for countries to provide it.

The Millennium Development Goals, a number of targets to help alleviate poverty around the world by 2015, includes the aim to “reduce by half the proportion of people without sustainable access to safe drinking water.” A number of international meetings have taken place in recent years.

For example, March 17-22, 2000, saw the Second World Water Forum, which tried to address many issues. The types of topics addressed included the following:

  • Water as a human right
  • Water Management—not water scarcity—as the problem
  • Call for a new Water Ethic; That water is a management problem, a cultural problem, rather than a resource problem in most cases
  • Governments should participate in people’s projects rather than people participating in governments’ projects
  • Water culture—and gender. Female involvement will be important. Women are often more sensitive to cultural and other issues which will be important.
  • Privatization—water should maintain a common property resource, common heritage of all. However, there may be costs associated with being able to provide the infrastructure and services in a sustainable way.
  • Eco-sanitation: Turning waste into a resource
  • Rainwater Harvesting

Some activists were concerned about the corporate agenda in water privatization. However, as per the final declaration of the water forum, water security was defined to mean that “freshwater, coastal and related ecosystems are protected and improved; that sustainable development and political stability are promoted, that every person has access to enough safe water at an affordable cost to lead a healthy and productive life and that the vulnerable are protected from the risks of water-related hazards.”

The declaration of the third World Water Forum in Japan, in 2003, saw increased support for the private sector. As an AlterNet news report noted, sponsors of the forum included big corporations such as Microsoft and Coca Cola. However, the same AlterNet report noted that privatization was hardly mentioned at the fourth Forum in early 2006, although it was a big concern for activists, environmentalists and others present. The report also quoted Gemma Bulos, founder of the NGO A Single Drop, who attended both the Forum and the parallel alternative forums and noted that, “The omission of the privatization rhetoric may have raised some question as to whether that methodology is considered viable anymore.”

The fourth Forum also noted in its final ministerial declaration that governments should have the primary role in providing water access and related improvements. (This does not preclude the use of private companies contracted to provide the service, but highlights the importance of democratic accountability over the provision of such service.)

The aforementioned 2006 Human Development Report notes that dealing with causes rather than effects is also cost-effective. “Every $1 spent in the [water] sector creates on average another $8 in costs averted and productivity gained.” The report also lays out four foundations for success, recognizing that these are no ready-made blueprints:

  1. Make water a human right—and mean it.
  2. Draw up national strategies for water and sanitation.
  3. Support national plans with international aid.
  4. Develop a global action plan.

Urgently resolving key issues such as access to safe water, efficient and sustainable use is likely to involve a number of actors, including governments, corporations, activists, and local people who directly feel the implications of decisions made in fancy corporate offices and luxurious international meeting venues. Without understanding or common goals, the environment, the lives of people, and prospects for a healthy future are at risk.

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