March 23, 2009
Private Water Management Helps The Poor
The Cochabamba “Water War”: An Anti-Privatisation Poster Child?
Back in 2002, when I was a young, wet-behind-the-ears Water Management Masters Student, I was of the mind that privatisation was wrong, or at the very least discriminatory. When applied to water utilities in developing countries – where lack of water and sanitation accounts for a high percentage of infant mortality – it was tantamount to immorality.1 How could poor communities be forced to decide between putting food on the table and having access to water for their families? As the course progressed, I and my fellow classmates listened to some very persuasive arguments as to why private-public partnerships in the water industry are beneficial and should be encouraged. Greater investment, more efficiency, better management; the reasons were many and legitimate. We were, however, also provided with very divergent views on the issue of social unrest and conflict that arise from privatisation of water utilities. The extreme views reflected the polarity which has come to define “privatisation”. Privatisation of water: you’re either for it or against it. Seemingly, there is no middle ground.
The outcome of a failed water privatisation in Cochabamba, Bolivia, has become a mantra for a variety of groups (academics, ideologues, trade unions) who oppose privatisation as a matter of course. In most media discussions and academic tomes, the cause of this failure is portrayed as unambiguous: foreign, multinational, profit-driven companies. Further analysis reveals that privatisation has become a scapegoat for the very complex origins of the conflict, involving local corruption, problems with regulatory enforcement, and lack of public engagement.
Chile: A Dynamic Water Market
Thirty years ago, Chile’s water management was not very different from water management in many parts of the developing world today. Management was topdown, there was excessive intervention from administrative authorities, and provision of water services was relatively poor. Yet today, Chile boasts near universal coverage of water provision in urban areas and 72 per cent coverage for rural households, one of the highest rates in South America.
This is largely due to the emergence of water markets in Chile, where rights to water resources have been traded freely for over two decades. Chile successfully created an appropriate institutional framework that permitted ownership of water resources, independent of land ownership, and the free transfer of these water rights between users.
direct the Centre’s Saskatchewan office from 2007 to 2011. He holds degrees in Electrical Engineering and Philosophy from the University of Auckland, where he also tutored Economics. In four years working for the Frontier Centre, David carried out extensive media work, presenting policy analysis through local and national television, newspapers, and radio. His policy columns have been published in newspapers in every province as well as the Globe and Mail and the National Post. David has produced policy research papers on telecommunications privatization, education, environmental policy, fiscal policy, poverty, and taxi deregulation. However, his major project with the Frontier Centre is the annual Local Government Performance Index (LGPI). The inaugural LGPI was released in November 2007 and comes at a time when municipal accounting standards in Canada must improve if the municipal government sector is to reach its potential as an economic growth engine for Canada. David is now a policy advisor in Wellington, New Zealand.