Free Water!

Every year, World Water Week gathers experts and UN officials in their thousands, uttering vitriolic statements, holding meetings and forming alliances – but ignoring the real problem that prevents a billion people getting decent water: bad management.


by Caroline Boin and Kendra Okonsky

Every year, World Water Week gathers experts and UN officials in their thousands, uttering vitriolic statements, holding meetings and forming alliances – but ignoring the real problem that prevents a billion people getting decent water: bad management.

This year, the main issue is (surprise, surprise!) climate change. But, whether or not climate change will increase droughts or increase rainfall, none of these meetings will lead to better water management – because that management is generally accepted as a natural State monopoly: “Only governments can reach the scale necessary to provide universal access to services that are free or heavily subsidised for poor people and geared to the needs of all citizens,” says Oxfam.

Water, like any resource, is scarce in many places. Normally, scarcity or demand drives people to devote their time, ingenuity and money to finding more efficient ways of using resources and increasing supplies. These entrepreneurs, whether they produce or sell wheat, shoes or water, need to be able to make a living out of their business – but in most countries private water business is illegal. To understand the problem with water, it is useful to look at another liquid resource: petroleum.

The management of water and of oil is heavily politicised – oil supply is subject to cartels and political tensions, while water is one of the most heavily regulated and controlled goods on Earth. And both are distributed unevenly across the globe: the Middle East is rich in oil but poor in water.

Still, to a large degree, oil production, transport and use is managed largely through the market process. As a result, its price enables all market participants – from explorers to consumers – to decide how much to use and whether to invest in the business.

Human ingenuity has been invested in discovering more oil and better ways of handling and using it because, when there is potential for reward, people invest their own resources (effort, skill, money and time).

Thanks to such investments, oil now accounts for 40% of the world’s energy, supply has multiplied by more than 150 during the past century and the price has remained similar in real terms over that time. And this dangerous substance is transported safely to every corner of the world.

As with oil, water requires processing and transport. Water for households or industry generally requires treatment. It must also be transported from wells and reservoirs, whether by human, animal or mechanical labour or through pipes. And once water has been used, it needs to be properly disposed of or it can exacerbate the spread of diseases such as cholera and even contaminate clean water.

If water were oil, entrepreneurs would pounce upon myriad opportunities to find new or better ways to treat, distribute, use and recycle it. But, unlike oil, water is rarely subject to market processes.

Without the benefits of competition, water policy is determined by lobbying, corruption and inefficiency. This explains why in most poor countries, from Pakistan to Peru, farmers pay a subsidised price for water. This causes waste and shortages, usually to the detriment of the poor, who must spend their own scarce time and money in pursuit of other sources of water. For instance, 30% of India’s urban population lacks access to municipal water. Around the world, slums rarely have any municipal supply.

So, like with any other goods or services, the unconnected obtain water from entrepreneurs who use pushcarts, donkeys, water tankers or even private pipes: the World Bank estimates that half of urban residents in poor countries get their water from such private suppliers, especially in slums – from South American aguateros to African jerrycan vendors.

The key to solving water scarcity in urban areas could lie with these innovative entrepreneurs. Yet they are usually prevented from providing water more widely because their businesses are illegal or “informal.”

Water is a more basic human need than oil so humans deserve the full benefits of the market process. This suggestion infuriates the many activists and politicians who believe that water is somehow special (unlike food, clothing and shelter) and must remain in government hands: “Water privatisation simply doesn’t work” and governments should “invest instead in public solutions to the global water crisis,” says the World Development Movement, which includes Oxfam and Christian Aid as partners. So the poor must remain the victims of water policies created in their name but formed by corruption and cronyism.

Instead of being a political, emotive issue, the solution to water scarcity is to free it, so water can benefit from the economic forces of supply and demand and the startling power of innovation and enterprise.

——–

Caroline Boin is a Research Fellow in the Environment Programme at International Policy Network, an educational think-tank based in London. Kendra. Okonski is editor of “The Water Revolution” (International Policy Press, 2006) and is Environment Programme Director of IPN.

This article appeared in the Business Recorder on August 29, 2007.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *