[Toro]

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More than a billion people worldwide lack access to clean, safe water. Some 12 million people die annually as a result, and millions more are struck by diseases associated with the lack of sanitary water. Those afflicted live mainly in poor countries where water distribution is run by inefficient public providers—97 percent of all water distribution in poor countries is public.

In recent years, a small number of developing country governments have turned to the private sector for help. Swedish activist and author Fredrik Segerfeldt shows how millions of new households in places as diverse as Argentina, the Philippines, Cambodia, and Morocco, have been connected to water networks as a result of private investment.

But “privatization” of water distribution has met with stiff resistance. A coalition of NGOs and special interests argues that water is a human right and that the private sector would hike rates beyond the ability of the poor to pay. Segerfeldt reviews cases of privatization and shows that most claims of the anti-privatization lobby are unfounded.

The very poor who are not connected to any water network have the most to gain from privatization since the rates they pay -- 12 times more on average than the price of network water -- fall dramatically when private companies connect them to the network. Using statistical data Segerfeldt warns against the tragic consequences of paying heed to those who are driven by an anti-business ideological agenda rather than a desire to try policies that actually help the poor.

[Toro]

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August 29, 2005

Private Water Saves Lives

by Fredrik Segerfeldt

Fredrik Segerfeldt is author of Water for Sale: How Businesses and the Market Can Resolve the World's Water Crisis (Cato Institute).

Worldwide, 1.1 billion people, mainly in poor countries, do not have access to clean, safe water. The shortage of water helps to perpetuate poverty, disease and early death. However, there is no shortage of water, at least not globally. We use a mere 8 per cent of the water available for human consumption. Instead, bad policies are the main problem. Even Cherrapunji, India, the wettest place on earth, suffers from recurrent water shortages.

Ninety-seven per cent of all water distribution in poor countries is managed by the public sector, which is largely responsible for more than a billion people being without water. Some governments of impoverished nations have turned to business for help, usually with good results. In poor countries with private investments in the water sector, more people have access to water than in those without such investments. Moreover, there are many examples of local businesses improving water distribution. Superior competence, better incentives and better access to capital for investment have allowed private distributors to enhance both the quality of the water and the scope of its distribution. Millions of people who lacked water mains within reach are now getting clean and safe water delivered within a convenient distance.

The privatization of water distribution has stirred up strong feelings and met with resistance. There have been violent protests and demonstrations against water privatization all over the world. Western anti-business non-governmental organizations and public employee unions, sometimes together with local protesters, have formed anti-privatization coalitions. However, the movement's criticisms are off base.

The main argument of the anti-privatization movement is that privatization increases prices, making water unaffordable for millions of poor people. In some cases, it is true that prices have gone up after privatization; in others not. But the price of water for those already connected to a mains network should not be the immediate concern. Instead, we should focus on those who lack access to mains water, usually the poorest in poor countries. It is primarily those people who die, suffer from disease and are trapped in poverty.

They usually purchase their lower-quality water from small-time vendors, paying on average 12 times more than for water from regular mains, and often more than that. When the price of water for those already connected goes up, the distributor gets both the resources to enlarge the network and the incentives to reach as many new customers as possible. When prices are too low to cover the costs of laying new pipes, each new customer entails a loss rather than a profit, which makes the distributor unwilling to extend the network. Therefore, even a doubling of the price of mains water could actually give poor people access to cheaper water than before.

There is another, less serious, argument put forward by the anti-privatization movement. Since water is considered a human right and since we die if we do not drink, its distribution must be handled democratically; that is, remain in the hands of the government and not be handed over to private, profit-seeking interests. Here we must allow for a degree of pragmatism. Access to food is also a human right. People also die if they do not eat. And in countries where food is produced and distributed "democratically", there tends to be neither food nor democracy. No one can seriously argue that all food should be produced and distributed by governments.

The resistance to giving enterprise and the market a larger scope in water distribution in poor countries has had the effect desired by the protesters. The pace of privatization has slowed. It is therefore vital that we have a serious discussion based on facts and analysis, rather than on anecdotes and dogmas.

True, many privatizations have been troublesome. Proper supervision has been missing. Regulatory bodies charged with enforcing contracts have been non-existent, incompetent or too weak. Contracts have been badly designed and bidding processes sloppy. But these mistakes do not make strong arguments against privatizations as such, but against bad privatizations. Let us, therefore, have a discussion on how to make them work better, instead of rejecting the idea altogether. Greater scope for businesses and the market has already saved many lives in Chile and Argentina, in Cambodia and the Philippines, in Guinea and Gabon. There are millions more to be saved.

This article appeared in the Financial Times, August 25, 2005.

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[Jaime_Souviens]

Toro Toro:

But “privatization” of water distribution has met with stiff resistance. A coalition of NGOs and special interests argues that water is a human right and that the private sector would hike rates beyond the ability of the poor to pay. Segerfeldt reviews cases of privatization and shows that most claims of the anti-privatization lobby are unfounded.

Stiff resistance from NGO's.... well, that figures.

Highly paid professionals in the NGO's would be out of work if people actually solved the problems that they were set up to manage.

Of course, a highly paid professional is :

a) a certified expert,
b) left leaning,
c) believes in the huge institutional processes he is a part of,
d) went in to non-profit work because of an animus toward profit,
e) etc.

[Blue_Nose]

I've a very shallow understanding of the situation, but from what you've presented, I would think making clean/safe water available to poorer countries by any means would be a beneficial act. Can these organizations really deny access to drinking water?

"Sure, your water is dirty and infected, but it's your right to not have to pay for it... we're protecting your rights by not allowing those scumbags to sell you potable water."

[Jaime_Souviens]

Blue-nose!!!

What do you think Socialism is all about ?

[Blue_Nose]

Well, maybe it would be better to collectively die of cholera than admit such ideals are not always the answer...

[Jaime_Souviens]

The surest way to PERPETUATE a problem is to fund an endowment that will generate a stream of income for someone. That someone will then always see to it that the problem remains so as to justify his drawing a salary.

In politics, the routine is the same except the endowment is the taxpayers' pocket.


Think of all the social service agencies spending billions of dollars in the United States on the urban poor. They can't actually do anything to help, or they'd jeopardize their funding.

Or the refugee problem 'managed' by the U.N.; including some tens of millions of people. If they actually resettled anyone and got them a job, the U.N. teams would undermine their own funding.


Good, 'honest', sincere, liberal, humanitarian, leftists. Professionals in their field. Funding their SUV and summer cottages on the suffering of millions.

[Toro]

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September 27, 2005
World Development Movement admits sorry state of nationalized water

By Alex Singleton | 27 September 2005

In this week's e-mail newsletter from the World Development Movement, an anti-capitalist pressure group, there is an attack water privatization. It says Britain's Department for International Development is wrong to assist Sierra Leone which has asked DFID for help tendering out and regulating its water system. But the e-mail admits the sorry state of the state-run water system in Sierra Leone: only 28 percent of the population has access to clean drinking water. Thanks to a state-run system, 72 percent of the people have to drink dirty water.

Puzzlingly, this is the same failed system that the World Development Movement wants to keep, despite the overwhelming evidence that water privatization increses quality and access to water thanks to greater investment and overseas expertize. Unfortunately, some people prefer to put ideological purity before water purity.

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[Blue_Nose]

I don't think the intent is quite that strong, Jaime... they likely wouldn't support this privatization because it takes the control out of their hands, but I think it's a bit much to assume they're intentionally keeping these people down for their own benefit

[Toro]

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Private investment brings clean water

By Penelope Hawthorne | 21 September 2005

Reuters reports that factories and homes in Tamil Nadu, India, have clean, reliable water for the very first time thanks to private investment. Although private provision of water has received some criticism from anti-capitalist groups, the newly-built water treatment and delivery plant shows a practical way of extending clean water access to a country where 87 per cent of rural dwellers live without running water.

The plant is majority owned by private firms, and is operated by Mahindra Water Utilities, a 50-50 joint venture of Mahindra Infrastructure Developers and Britain's United Utilities.

State-backed, but majority owned by private firms and investors, the water treatment and delivery plant in Tirupur is the first of its kind in a country where almost half the urban population and 87 percent of rural dwellers live without running water. Before the plant was built, trucks delivered water from the river or wells - but unfiltered.

"The water systems in India need technology upgrades which can minimise wastage and theft and ensure a more efficient system of distribution and transparency," said Shreerang Deshpande, manager of network and maintenance for Mahindra Water Utilities. "You need private participation for the resources and expertise required."

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[Blue_Nose]

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Unfortunately, some people prefer to put ideological purity before water purity.

I think that about sums it up.

[Toro]

Privatization of water decreases infant mortality! And some of you are against this. For shame!

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Abstract: In the 1990s Argentina embarked on one of the largest privatization campaigns in theworld as part of a structural reform plan. The program included the privatization of local water companies covering approximately 30 percent of the country’s municipalities. Since clean water and sewage treatment are critical to control the spread of infectious and parasitic diseases; access expansions, quality improvements, and tariff changes associated to privatization may have affected health outcomes. Using the variation in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 5 to 7 percent in areas that privatized their water services overall; and that the effect was largest in the poorest areas. In fact, we estimate that child mortality fell by 24 percent in the poorest municipalities. These results suggest that the privatization of water services prevented approximately 375 deaths of young children per year. We check the robustness of these estimates using cause specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it was uncorrelated with deaths from causes unrelated to water conditions.

High Quality Research Link

[Jaime_Souviens]

Blue_Nose Blue_Nose:

I don't think the intent is quite that strong, Jaime... they likely wouldn't support this privatization because it takes the control out of their hands, but I think it's a bit much to assume they're intentionally keeping these people down for their own benefit.

I doubt they consciously realize what they're doing.

And you'd be surprised how quickly people will blind themselves to the obvious in time of need.

[Blue_Nose]

You believe that, consciously or not, these organizations are intentionally preventing the betterment of millions of people for the sake of their jobs?

I hope you realize how huge an accusation that is.

[Toro]

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Investment Flows Up by 36 Percent in 2004

Drawing on the World Bank’s Private Participation in Infrastructure Project Database, this Note reviews developments in the water and sewerage sector of developing countries in 2004 and changes in private participation in the sector since 2001. Data for 2004 show that total investment in water and sewerage projects with private participation amounted to nearly US$2 billion. Recent private activity in water was concentrated in a few countries and focused on treatment plants and smaller projects.

http://rru.worldbank.org/Documents/PublicP...97Izaguirre.pdf