Water as Big Business

When the so-called “great men” of Chicago were planning the 1893 World’s Fair, lead architect Daniel Burnham was worried about water. Tens of millions of visitors were expected and Chicago had notoriously poor drinking water. So Burnham decided that they would lay pipes from a small town in Wisconsin with a natural spring, and pipe the water into the “White City” at the fairgrounds on Chicago’s south shore. According to Erik Larson’s account of the World’s Fair, “Devil in the White City”, when the engineers showed up to start laying the pipe, the Wisconsin townspeople ran them off with pitch forks. The engineers found another town with a less active population and the visitors to the fair had their drinking water.

115 years later and Beijing is essentially doing the same thing for the Olympics, but this time the villagers aren’t coming after the engineers with pitchforks, they are talking to the media. Farmers may not have water to grow crops, but visitors for the Olympics will have tap water even though city reservoirs are at 1/3 the levels they were 10 years ago because of drought and population growth. Conservation be damned, the visitors shouldn’t have to worry about all that!

Beyond civic pride, water has become big business. Somehow a necessity of life has become a commodity. Not only one that people will pay a premium to buy in the west rather than drink for free from the tap, but also one that can be controlled for profit in the developing world. Corporations are jumping on the opportunity. According to a CBC series on the privatization of water, “In the past ten years, three giant global corporations have quietly assumed control over the water supplied to almost 300 million people in every continent of the world,” French companies Vivendi and Suez and German owned Thames Water of England. According to one of the reports in the CBC series, Peter Spillett, a senior executive with Thames Water, calls water the petroleum of the 21st century. Maude Barlow and Tony Clarke have a comprehensive piece about this that they wrote in 2002 which has been republished on Celsias.

The private corporate water grab is primarily happening in Asia, Latin America and Africa, three parts of the world that can ill afford to commoditize water in this way. The big three intend to expand to China and North America next as they see huge profit potentials. But not everybody is willing to just accept it.

In Bolivia, activists successfully fought off the privatization of the water supply in the town of Cochabamba, where Bechtel Corporation temporarily took over the water supply, increasing water prices by 300% to 1/5th of per capita income under a federal law that even made it so that villagers needed to get permits to collect rainwater!

Cochabamba lies in a semidesert region of Bolivia, making water a scarce and precious resource. However, in 1999 the World Bank recommended privatization of Cochabamba's municipal water supply company... "Bank officials directly threatened to withhold $600 million in international debt relief if Bolivia didn't privatize Cochabamba's public water system." -- Water Privatization Conflicts
It took five months, three dead protesters and dozens of injuries, but villagers were finally able to get the law reversed and kick Bechtel out. And yet, the World Bank continues to back these attempts to privatize water supplies in developing countries despite the effect that will play in global poverty.

In South Africa, water was privatized with the end of apartheid. True, water distribution has been greatly expanded, but at a price that many could not afford. So even with more clean water available, the poor were still sourcing their water from unclean streams and ponds because they could not access the available water without the money to pay their water bills. Water companies would shut down their water supply or demand that they pre-pay. The South Africa water debacles, including privatization and the pollution of water supplies by the Coca-Cola bottling company, are cited in a new documentary, “FLOW: For Love of Water”.

Agricultural, fishing and industry water rights have led to big disputes in the last few years, too. The Atlanta drought this past fall created big problems between Georgia, Alabama and Florida. And we have had plenty of fighting here in California over the rights to water from the Klamath River. It has taken two years for farmers, fisherman, Native American tribes and the Federal government to come to an agreement that now hinges on the destruction of four privately owned hydroelectric dams, with no certainty that the dams’ owner, Warren Buffet’s PacifiCorp, will agree to do so.

Some are predicting a water cap and trade system similar to the carbon cap and trade system in Europe (because THAT has worked so well) in order to deal with shortages. And while this might have the benefit of making wind and solar power more competitive in price with coal and nuclear which use far greater amounts of water, one has to acknowledge that such a system has the capacity to further harm the poor as water prices increase even further. It seems the looming global water crisis may already be here, and like with carbon, the powers that be believe that the free market system will solve it. Based on evidence from the developing world, though, the last thing we ought to do is further commoditize this critical resource.

The rush to privatize water continues unencumbered, despite its unpopularity among residents worldwide who are affected by it. Countries faced with large debts are forced by the World Bank and IMF to privatize water. Water deregulation is a common demand of the World Bank and IMF as part of their loan conditions. In 2000, out of 40 IMF loans distributed through the International Finance Corporation, 12 had requirements of partial or full privatization of water supplies. They also insisted on the creation of policies to stimulate “full cost recovery” and the elimination of subsidies. African governments, such as Ghana, increasingly give in to pressures for water privatization. In Ghana, the World Bank and IMF policies forced the sale of water at market rate, requiring the poor to spend up to 50 percent of their earnings on water purchases. As Vandana Shiva writes in Water Wars, “The water crisis is the most pervasive, most severe, and most invisible dimension of the ecological devastation of the earth.” -- Water Privatization Conflicts
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  • Posted on March 12, 2008. Listed in:

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