Water as a human right? Or a private good? By Jooyoun Lee

Contents Public vs. private good 1 Water as a human right 2 Privatization of water 3 Case study: Bolivia 4

Contending viewpoints  "Water should not be privatized, commodified, traded or exported in bulk for commercial purposes." — Maude Barlow, International Forum on Globalization  "Food and water are basic rights. But we pay for food. Why should we not pay for water?" — Ismail Serageldin at the Second World Water Forum, The Hague

Questions  How is the 21 st century different in terms of the perspectives of water? What is the cause of the conflict if any?  To what extent do you think Wolf’s claim is valid or not? What is your reasoning about it?  How can private water markets address the needs of people with different social, environmental and political concerns?

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, since purely private markets often do not find it profitable to provide public goods.  Water has often been provided at subsidized prices or for free in many situations. Thus it makes water available to even the poorest segments of society.

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) -  Access to water can be inferred as a derivative right necessary to meet the explicit rights to health and an adequate standard of life.

Water as a human right (cont.)  Explicit support for the human right to water in international statements Article 24 of the 1989 Convention of the Rights of the Child (CRC) states that a child has the right to enjoy the highest attainable standard of health and among the measures States are to take to secure this right are measures to combat disease and malnutrition… through, inter alia, … the provision of adequate nutritious foods and clean drinking water.  A human right to water apply to ‘basic needs’ for drinking, cooking and fundamental domestic uses.  The imperatives to meet basic human water needs are rooted in international law and agreement, which calls for government responsibility.

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.

Water as a public and private good  Following the Dublin meeting, the United Nations Conference on Environment and Development (held in Rio in 1992) recognized that economics must play a part in efficient water management: “Integrated water resources management is based on the perception of water as an integral part of the ecosystem, a natural resource, and a social and economic good…” (UN Agenda 21, Chapter 18.8).  In the years following Dublin, the new concept of water has been used to challenge traditional approaches to government provision of basic water services.

Rationale for Privatization of Water  Societal: The private sector can deliver basic goods and services more efficiently and at lower costs than the public sector. Thus privatization actually benefits consumers – particularly the poor – by improving access and lowering costs.  Commercial: more business is better.  Financial: Private sector can mobilize capital faster and cheaper than the public sector. Adequate water services cannot be provided without enormous increases in investment.  Ideological: Smaller government is better (Europe).  Pragmatic: Competent, efficient water-system operations require private participation.

Water privatization Area (2000) Population (millions) Europe and Mediterranean 43 North America14 South America25 Asia Pacific23 Africa5 Area (2000) Population (millions) France25.0 Western Europe18.5 Central & Eastern Europe 6.3 Middle East and Africa 8.5 North America16.8 Latin America7.8 Asia14.6 Populations Served by Suez Populations Served by Vivendi

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  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.

The 4 th World Water Forum (March 2006)  Ministerial Declaration  The critical importance of water for sustainable development  The need to include water and sanitation as priorities in national sustainable development and poverty reduction strategies.  The importance of domestic and international capacity-building policies and cooperation to mitigate water-related disasters, the role of parliamentarians and local authorities in increasing sustainable access to water and sanitation services.

Suggested readings and information  Gleick, Peter H “The Human Right to Water.” Water Policy 1:  Gleick, Peter H., Gary Wolff, Elizabeth L. Chalecki, Rachel Reyes “The New Economy of Water: The Risks and Benefits of Globalization and Privatization of Fresh Water.” Pacific Institute. Available at onomy_of_water.pdf  Perreault, Thomas “From the Guerra Del Agua to the Guerra Del Gas: Resource Governance, Neoliberalism and Popular Protest in Bolivia.” Antipode 38 (1):  4 th World Water Forum. March  The homepage of film “Thirst.”