Privatization: Issues & Debates
As the world's water becomes scarce and
corporations seek to exploit this scarcity for profit, people
around the world are losing ownership and control of water
resources on which they depend. Water is a human right; to the
extent one has the right to live, one has the right to water.
Public Citizen's Water for All Campaign is dedicated to
protecting water as a common resource, stopping water
privatization and bulk water sales, and defending access to
clean and affordable water around the world.
A worldwide crisis over water is brewing.
According to the United Nations, 31 countries are now facing
water scarcity and 1 billion people lack access clean drinking
water. Water consumption is doubling every 20 years and yet at
the same time, water sources are rapidly being polluted,
depleted, diverted and exploited by corporate interests ranging
from industrial agriculture and manufacturing to electricity
production and mining. The World Bank predicts that by 2025,
two-thirds of the world's population will suffer from lack of
clean and safe drinking water.
Today, people around the world are losing
ownership and control of the water which remains.
Instead of protecting their citizens’ water
resources from self-interested profiteers, governments are
retreating from their responsibilities and bending to the will
of giant transnational corporations that are poised to profit
from the shortage of water. Fortune magazine has
predicted that "water is the oil of the 21 century," and now
corporations are rushing to invest in the new get-rich economy
of water. Giant water, energy, food, and shipping companies have
plans to buy water rights, privatize publicly-owned water
systems, promote bottled water, and sell "bulk" water by
transporting it from water rich areas to thirsty markets. At the
same time, to ensure maximum profits, these companies are
lobbying to weaken water quality standards, and pushing for
trade agreements that hand over the U.S. water resources to
Why oppose privatization of water?
Water privatization schemes throughout the
world have a track record of skyrocketing prices, water quality
problems, deteriorating service and a loss of local control.
Privatization advocates argue – usually
without any supporting evidence – that switching from publicly
owned and operated utilities to private sector firms will lead
to greater economic efficiency, stabilized rates, reduced public
debt and improved budgetary management.
In reality, privatization more often than not
fulfills none of these promises, and instead creates a number of
new problems. Vulnerable to corruption and operating according
to a profit-driven corporate agenda fundamentally incompatible
with delivering an essential service, private water companies
are failing to provide citizens with safe, affordable water.
Private corporations seek to increase profit margins by cutting
costs; hence privatization is almost always accompanied by
Water Privatization Fiascos
A New Social Experiment?
The role of multinational corporations in providing water
and sanitation services is relatively new. In fact, one could
say water "privatization" is a global social experiment.
Historically, water has been viewed as a public good, not a
market commodity. Over the last 200 years, most water utilities
have been publicly owned and managed. And, the vast majority of
people around the world receive water and sanitation services
from publicly owned and operated facilities. Most countries have
only recently begun to consider privatization of their water
utilities. Only 5% of the world’s water services are run by
private companies. Water and sanitation services have been
publicly run because private companies were not interested in
owning or managing water utilities. There was little or no
profit to be made. But, with the specter of growing freshwater
scarcity and the prediction that water will be the oil of
the 21st century, major global corporations have been moving
into the "water market."
The multinational water corporations, their government allies,
the IMF, the World Bank and the regional development banks have
claimed that water privatization (or public/private
partnerships) is the answer. They claim that bringing the
private sector into water and sanitation service provision will
ensure access to the more than a billion people worldwide who
lack clean and affordable water, and the 2.4 billion who lack
sanitation services. The water corporations and their allies
argue that the private sector is more efficient, cost-effective
and competitive. And, the private sector can bring needed
Alternatives to Water Privatization
Water is a basic human right and governments
have a responsibility to ensure universal access to water and
sanitation services. Water and sanitation services that are
publicly funded, managed and operated are the most common
approach around the world. This approach has evolved in the
course of human history due to the adverse public health
outcomes (cholera and other water-borne diseases) when major
portions of the population are excluded from access to adequate
water and sanitation facilities. The public health literature
makes it clear that expanding access to clean water has such
great human and economic benefits that it is worth considering
having governments provide it at a loss, to be subsidized by
other sectors that benefit.
Yet many governments have failed in their
obligation to provide universal access to water and sanitation
services. This has enabled the World Bank and other
international institutions to claim that the public sector is
not efficient and cost-effective and the private sector is the
answer. Most people are not convinced that the answer can be
found in ceding their public water systems to private
profit-making corporations. Instead, around the world, local
communities have developed their own creative water management
solutions. This section will explore a range of dynamic
alternative models of publicly-owned or collectively-owned water
services that focus on democratic participation, local
accountability and community activism.
Private companies have offered themselves as the solution, but
have not posted a good record. Many cities have concluded that
their vital water and wastewater services could be operated more
efficiently in the public sphere. A number of communities have
reorganized operation and management under local, public
control. It has saved money, rewarded employees, maintained or
improved water quality and kept money in the community.
ALSO SEE -
Problems of privatization of water are many
It is the government of the poor country left to pick up the
pieces of failed privatization projects .