The New Economic Market: Water

The New Economic Market: Water

Almost thirty years ago the discussion about water as an unlasting good started to become a basic problem all over the world. The first world water conference was in 1977 in Mar del Plata in Argentina. Since then water was one of the main topics in political discussions. In the 80ties the aim was to offer worldwide water supply to every one, but the goal could not be fulfilled until today. The UNO (United Nations Organization), UNESCO (United Nations Educational, Scientific and Cultural Organization), UNICEF(United Nations Children's Fund), WHO (World Health Organization), FAO (Food and Agriculture Organization)and a certain number of countries focused on the co-operation with each other and the co-operation with private investors to enable the worldwide water supply. The goals were clear, but every organisation had different ideas and methods to reach them. On the international Conference on Water and Environment in Dublin, 1992 four resolutions were made that formed the guideline:

“4 Dublin principles : - Fresh water is a finite and vulnerable resource, essential to sustain life, development and the environment. - Water development and management should be based on a participatory approach, involving users, planners and policy-makers at all levels - Women play a central part in the provision, management and safeguarding of water. - Water has an economic value in all its competing uses and should be recognize as an economic good.” (www.worldwatercouncil.org)

The fourth point made it possible to treat water as an economical good. Until then, it was possible for companies to make money with water. One reason for this decision was the thought that through the treatment of water under economical aspects and under the free market economy conditions, it will rise in quality. If water will be seen as a good, it will follow the rules of supply and demand, and it was hoped, that water would be dispensed equal and more efficient. The idea was that this could solve the water supply problem. For the first time water lost its status as common property and became marketable. The World Bank as one big supporter of water privatisation:

The World Bank as the international development bank often pointed out, that the deregulation and privatisation of water supply is the best solution to offer poor people access to important water infrastructure. Support from the World Bank as facilities and guarantees for water projects are often linked to the condition that private investors are participants, known as Public Private Partnership.

The lack of economic competition

A basic problem of the privatisation in the form of rent or sell of the public water supply is the lack of the economic competition. The public water supply turns into a monopoly and competition is impossible. The state has the possibility to choose the company that offers the best and efficient offer as good quality and low prices. Because of the privatisation every company has the chance to rent or buy the public water supply all over the world. For example the German company RWE bought the British water company Thames Water, that since then controls the water supply in London, Berlin, Budapest, Shanghai, Jakarta, Bangkok and the supply of different cities in Australia, India, Japan, Singapore and Malaysia.

Water in a bottle

Through Globalization and the opening of the world market it was possible for beverage companies to conquer the water market basically in developed countries. Worldwide Nestlé, Pepsi, Danone and the Coca Cola company are the marked leaders of mineral water in bottles. Beyond the problem that the production of plastic bottles has a high negative impact on environment, the regional public water quality declines. Water supply changes from a public issue to a private issue, it just depends on money. Rich people can afford high quality water in bottles, in contrast to the poor. That causes a reduced pressure on policy, because public water supply looses its importance, if high quality water is available even if it is in bottles and expensive.

Privatisation of Water Supply

“Worldwide water supply to every one” was the goal in the 80ties. The governments and development organisations thought to reach the goal, to provide the world population with high quality water with public funds. In the 90ties world wide water supply should be organised and improved by private companies. They were equated with characteristics as efficient, productive, profitable, flexible and innovative. On the contrary public suppliers were given characteristics as corrupt, bureaucratic, acting without flexibility and low quality. It is the truth that some of the characteristics of public supplier are correct, in particular in developing countries, but the decline of the public sector is caused by debts, the macroeconomic situation and the absence of democracy. The negative characteristics were used to legitimate the privatisation of the water-sector. Further, in times of low national and regional budgets the water supply is a burden and too expensive. In the future the public water sector will keep its importance, particularly concerning the water supply of poor people, which will not happen without state aid.