I live in a US city where water is a public utility. Home owners get a bill for their water and sanitation fees. Renters pay the cost in their monthly rent checks. The homeless depend on the faucets and restrooms of public buildings, such as libraries.
The situation is different in the developing world, where over a billion people lack access to safe drinking water. Many women spend over six hours a day collecting enough water for their families (and wait until after dark to relieve themselves). When it comes to sanitation, 2.6 billion people do not even have access to “improved” pit latrines – open pits with simple modifications to reduce flies and odors.
The health consequences of unsafe drinking water and poor sanitation include diarrheal diseases (such as cholera), infection with the parasite schistosomiasis (a cause of blindness), and various parasitic intestinal worms. Five million people die every year from waterborne diseases.
Providing water in poor countries is obviously essential to the health of the nation. When a country is poor, it may be forced to turn to foreign corporations for help, often at the insistence of the World Bank and the International Monetary Fund.
Consider what happened in Bolivia.
A short-lived victory
Foreign corporations view the privatization of water – the transfer of control from a public utility to a private interest — as an opportunity for a profitable business investment. In Cochabamba – Bolivia’s third largest city — a consortium of companies, including the infamous Bechtel, contracted to provide water and sanitation to residents. Their contract guaranteed a minimum return on investment of 15%.
Once the water started flowing, there were claims that the cost of water increased an average of 50% and that residents were no longer allowed to collect rain water. Residents organized in protest. In response, the government declared martial law. Bolivian police killed at least six people and injured over 170 protesters.
The protest was successful in that the government withdrew the Bechtel contract. What ensued is more complicated, however. There’s a lengthy and excellent description of the events by William Finnegan in The New Yorker.
Superficially the victory of those opposed to privatization by Bechtel was impressive, but the story does not have a happy ending. Not only did Bechtel sue the Bolivian government – some sources say for $40 million, others $50 million. The residents of Cochabamba still lack an adequate water supply.
The Water Wars of Cochabamba happened in 2000. Looking back on those events, Jim Shultz — an editor of Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization — writes:
[T]he story of the Water Revolt and its aftermath is so much more complicated than the myth of the Water Revolt. … [The] reality basically comes down to two things:
1. The Cochabamba Water Revolt was and remains a powerful David and Goliath struggle in which some of the most humble people in the world took on the forces of the World Bank, Bechtel, and a former dictator, Hugo Banzer, and took back a resource essential to life – their water.
2. Nine years later the public company reborn from that revolt, SEMAPA, is marked by an ongoing history of mismanagement and corruption which, combined with Cochabamba’s rapid population growth, has left much of the city without the basic water they need and deserve.
In other words, Cochabambinos won the war in the streets but lost the battle to have honest and competent water service.
Water privatization: An investment bonanza
Image source: Jon Flanders
William Finnegan, Leasing the Rain, The New Yorker, April 8, 2000
Jim Shultz and Melissa Crane Draper (editors), Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization
Joel Bakan, The Corporation (DVD)