Water as a human right? Or a private good?

Current Situations 1.1 billion people do not have access to clean water 2.4 billion people lack access to basic sanitation. 8 million people, mainly children in African and Asia, die every year from preventable, water-related disease.

Future Prospects According to the UN estimates, in 50 years, an even higher number of people will be suffering from water shortage. According to the World Bank, two-thirds of the world’s population will run short of fresh drinking water. Fortune magazine dubbed water “the oil of the 21st century.”

Public vs. Private goods Defining characteristics of private and public goods: Rivalry in consumption – Rivalry means that what one person consumes cannot be consumed by anyone else. Excludability in ownership and use – Excludability means that some particular person has exclusive control over the good. Private good: Rivalry + Excludability Public good: Non-rivalry + Non-excludability

Water as a public good Widespread availability of clean and affordable water means that water is a public good. Access to clean water is fundamental to survival and critical for reducing the prevalence of many water-related diseases. Thus, ensuring that the public receives an adequate supply of public goods requires some level of government responsibilities and action.

Water as a human right The right to water is an implicit part of the right to food, health, human well-being and life. 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… - Article 25 of the Universal Declaration of human rights (UDHR) -

Water as a private good According to the International Conference on Water and Environment held in Dublin, Ireland in January 1992, it was recognized that “Water has an economic value in all its competing uses and should be recognized as an economic good.” According to this view, water will be allocated across competing uses in a way that maximize the net benefit from that amount of water. Allocation of water can take place through markets, through other means or through combinations of market and non-market processes.

Case study: Water War in Bolivia - Background Bolivia is one among many poor and highly indebted countries. Bolivia borrowed money ($600 million) from the World Bank and IMF. The World Bank and IMF have pushed the Bolivian government to sell its public enterprises to international investors.

Water War in Bolivia (Cont.) Officials in World Bank and IMF suggested that Bolivia’s continued poverty and underdevelopment is the result of delays in privatization schemes. In 1999, the Bolivian government privatized the water system of Cochabamba which is Bolivia’s third-largest city. The government granted a 40-year contract to Aguas de Tunari (a consortium of London-based International Water Limited and San Francisco-based Bechtel Corp.) to run Cochabamba’s water system. The newly privatized water company immediately modified the rate structure and it increased water rates as much as 200 percent, which the company claimed was necessary to cover the costs of planned extensions and upgrades to existing infrastructure.

Water War in Bolivia - Protests Unable to survive under the burden of the new water prices, the public staged huge protests in Cochabamba in Feb. 2000. Strikes, roadblocks and other forms of civil disobedience were used. The protests spread from Cochabamba throughout Bolivia. Tens of thousands of people gathered in streets to demand the cancellation of Aguas de Tunari’s contract and a reform of the laws that allowed it.

Water War in Bolivia - Violence President Banzer declared a 90-day state of emergency and dispatched military with tear gas into the streets of Cochabamba when thousands of protestors marched peacefully. About 175 marchers were injured and two were blinded by the gas. More than 50 people were detained and six people were killed.

Water War in Bolivia - Results Under pressure from civil society the governor of Cochabamba tried to persuade the central government to cancel the contract with Aguas del Tunari. Finally, on April 10, President Banzer announced the termination of the water contract between Bolivia and Aguas del Tunari. A revised drinking water law was issued. However, many structural problems remain as some 40 percent of the city’s population is not served by the municipal water system.

Implications of Bolivian case Differing logic of industries and indigenous people. (Natural resources vs. national resources) Protestors demanded broader forms of participation and the democratization of decision-making processes. Protestors demanded more secure livelihoods and resource rights. They called for an alternative model of economic development.