Research Paper on Water Privatization
Water is one of the most
essential elements for life. Over 71 percent of the earth is
covered with water but only 1 percent of that water is fresh
water. The scarcity of fresh and clean water leads to the world
to a situation where at least 1 billion of people lack access to
clean water and over 2 billion of people lack access to the
facilities of proper sanitation. This shortage of clean water
creates problems like public health, pollution and widespread
environment contamination. It has been estimated that the
shortage of clean water kills almost 10,000 to 30,000 children
everyday. The water consumption increases day by day and it has
been estimated that it increases more rapidly than twice the
rate of human population.
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Corporate privatization of Water
The water has now become an economic resource managed by the
market forces. The governments of such countries, who cannot
afford to start and maintain the projects to overcome the
difficulty of water scarcity, give the control of this resource
to private interests, which in turn are capitalizing on the
growing scarcity of water. According to the reports of World
Bank’s Private Participation in Infrastructure (PPI), there were
only 8 projects of water and sewerage in developing countries
during 1984 to 1990, which increased up to 97 between the years
1990 to 1997. There are actually five financial concerns, which
are associated with the privatization of water. These concerns
are:
1. Water is a resource necessary for life; hence there is much
at stake rather than only financial benefits while making
decisions about water allocation. The corporate privatization of
water to some organization give them control over the lives of
millions of people, and they would exercise their monopoly to
maximize their profits
2. The history of water industry has shown the allegations of
bribery, misappropriation of funds, high consumer prices etc.
3. It is also to be noted that the privatization of an important
resource like water means that the management of water is based
on the scarcity and profit maximization rather than a long-term
sustainability. It is possible that the organization puts their
profit before the sustainable water management
4. The trend of privatization gradually reduces the democratic
involvement of governments and the citizens in water industry’s
water management decisions. Hence the government and the public
of a country become unable to ensure that the resource of their
country managed in an efficient manner. There is also a
possibility that if monopoly of a private organization is
established it is almost impossible for the government to
reverse it.
5. According to the records, it can easily be said that the
countries that have the worst water crisis have the lowest GDP
and are the home of the poorest people of the world. If private
organizations establish their monopoly over the resource of
water there, it results the access of water only to those who
can afford it.
Desalinization of Sea Water
It has often been thought that desalination is only used for the
removal of salt from seawater. This is a wrong concept.
Desalination is actually the process of removing any material
and most organic chemical compounds from the water. Desalination
can be defined with the term “purification” of water, more
appropriately.
There are two process or technologies, which are used to purify
the seawater. These technologies are:
• Reverse Osmosis: In this process the Seawater is forced
through a semi-permeable membrane, the function of this membrane
is to restrict the salt and other minerals and allow water to
pass through it.
• Distillation: In this process Seawater is heated to produce
steam, this steam is then condensed to produce water without
impurities.
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It has been estimated that the distillation unit capable of
producing 9 gallons of pure water per day cost around US $ 1500.
The other expense is only the power consumed to purify the
water. Thus a gallon of fresh water can be produced from
seawater for about 25 cents. Desalination is considered to be a
cheapest method for the purification of water. According to the
Saline Water Conversion Corporation, there were 27 desalination
plants in 1999, producing 745 million cubic meters of purified
water per day, which is approximately equal to the 70 percent of
the required drinking water.
Benefits of corporate Commercialization of water
The most important benefit of corporate commercialization of
water is to solve the problem of the scarcity of water by
converting the waste and seawater into fresh drinking water. The
other direct socio-economic benefit is that, the organizations
involved in the privatization of water have created the
employment opportunities at a considerable extent in some of the
poorest countries.
Role of World Bank in Commercialization Process
The financial success of most of the organizations of water
industry is supported by the international financial
organizations such as the World Bank, the I.M.F and the European
Bank for Reconstruction and development. According to the
database of the World Bank, the corporate commercialization of
water supply is composed of 14 percent of its lending. The World
Bank has invested more than $ 33 billion in water related
projects during 1985 to 1998. This whole-hearted support from
the World Bank allows the corporations to incur less risk while
reaping the maximum profits of their water projects. For
example, at one instance, Suez Lyonnaise invested only $ 30
million of the promised $1,000 million for improvements in a
subsidiary’s project, the rest has been provided by the World
Bank and the Argentine banks.
The World Bank and other international financial institutions
have very biased and partial role towards the corporate
commercialization of water. From the mid 1980s World Bank has
been developing policies and strategies for the better
management of water resources, but all of these policies are
biased towards the privatization and the involvement of large
corporations. This partiality explains the trend towards the
multi-pronged structure of the large corporations and the joint
venture approach taken in many occasions.
According to a report, the World Bank has believed that the
water availability at low or at no cost is uneconomic and
inefficient; the World Bank is of the opinion that even the poor
have to pay for water. In the same report the Bank has stated
that, the poor has been given a wide range of options so they
can choose the level of water services for which they are
willing to pay.
The World Bank has initiated water sector reforms whose direct
aim is the privatization of water resources and
commercialization of water management. Hence the World Bank has
suggested a shift from “supply oriented” to a “demand oriented”
approach. According to this logic, the economically powerful
will override the needs of the poor.
Conclusion
In summary, it can be said that world is seriously facing the
crisis of clean water, which is gradually increasing. Although
the privatization of water resources helps to solve the
difficulty of scarcity of water, it also gives the organization,
the total controls over the water resources.
If the corporate commercialization is the only solution for the
difficulty of water crisis, it is the duty of the respective
government to ensure that this privatization would not aggravate
the crisis.
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