Should Water Be Commodified - Case Study Example

SHOULD WATER BE COMMODIFIED? Introduction On account of water, many agree that the 21st century will be a decisive year for the humankind. For, unless the nations seriously consider managing water as an economic good and, at the same time, veer away from understanding water as a human right, the globe is very likely to face a prospect of health, economic and security crises. The consideration of water as an economic good is termed commodification (Seabright 2010, pp. 172; Bond 20xx) or privatization of water (Shiva 2011). Either of the terminologies refers to making willful or non-biddable payment to corporations for something that people could otherwise get for free (Shaw 2009). Such concept is found formally contained in Improving Water Resources Management, a 1972 World Bank paper (The World Bank 2011). In this paper, the World Bank asserted that it is uneconomic and inefficient to allow access to water at low cost or no cost at all. And, this contention by the World Bank is made to appear plausible by the proposition that the human race has actually taken water for granted, and that we have been seriously mistaken about the capacity of the global water systems to sustain our demands on water (Barlow 2001). The World Bank’s proposition, in effect, translates to making the poor pay for water (Shiva 2011) and clears the avenue for the entry of corporations into the realm or industry of water management (Bond 20xx). Big companies have been involved in the supply and distribution of water through irrigation, energy and even domestic use (The World Bank 2011) – the usual areas where government service used to be exercised. To date, however, the proposition – backed by the World Bank and the World Trade Organization – is still far from being accepted by all. In Seabright’s (2011) word, the issue is still far from finding closure. This is accounted for by sturdiness of the tradition of perceiving water as a human right. In fact, up to now, the issue is kept alive by the heated – nay, vibrant – exchange of ideas among the supra-government bodies, the national governments, the public and private (water providers) and the communities (The World Bank 2011). Now, these ideas that either support or contradict the thought of commodifying or privatizing water will be attempted by the succeeding sections to present. These ideas or arguments were culled from papers and reports of organizations and government agencies, as well as from the writings of authorities who support either side of the ongoing debate. This paper concludes that not only does the question have polarizing effect; the issue, too, is complex and cannot be settled through just a single approach. The ideologies of water commodification Actually, everyone pays for water. This observation forms the core of the argument for commodification or privatization of water that the World Bank has been advancing. The adherents of this position, as a matter of fact, starkly observes that even the poor are willing to pay for a water service that is reliable. And, they pay more for the less that they enjoy when the water service is unreliable. Thus, the logical subsequence of commodification of water is in fact a service to the poor people who are given a wider range of options to choose the level or quality of water services for which they will pay (The World Bank 1992). Another consequence of this is that the water suppliers are now given financial stake to meet the needs of the poor. It is said that this will ultimately compensate for the reduction of government expenditure that would have been intended to satisfy the basic needs of the people, such as water (Shiva 2011). Between the (private) water suppliers and the consumers, this redounds to a fee schedule that is devised by the former in such a way that the latter will receive a calculated amount of water at a low cost and optionally pay a higher fee for additional water. The preceding discourse is complemented by the position associated with neo-liberalism holding that, in fact, history would tell us that at all times and particularly over the recent century water has been badly managed and – most importantly – terribly underpriced (The Economist 2003; see also Snitow, Kaufman & Fox 2007, p. 2). Bad governance of water takes the primary form of allowing access to it for free for all. This is an instance of bad governance for it completely ignores in the process the huge cost associated with the collection, cleaning, storage and distribution of water to its end users. To correct this problem, the “best” solution is held to be the sensible pricing of water (The Economist 2003). In similar vein, the “best” way to deliver water to poor people is to treat it pretty much like any business goods (The Economist 2003). The sensible pricing of water and its treatment as an economic commodity should only be made to accurately reflect costs to everyone and not just to the immediate user. This should be preceded by first looking at how systems of prices are established in the first place, together with their strengths and limitations in coordinating reciprocal exchange (Seabright 2010). The third discourse in support of water privatization or commodification springs from refute of the principle that water is a scarce good with aspects of economic efficiency, social equity and environmental sustainability (Seabright 2010). Termed sustainable development or ecological modernization (Shiva 2011), this discourse is essentially directing the political decision makers to desert the concept of free water for all and – in the process – take an active role in promoting increased capital cost recovery from water users (Bond 20xx). Bluemel echoes this line of thinking when he writes that the stand that water is human right may be beneficial from individual perspective, but is actually fraught with difficulties from a country point of view since it will delimit the cost recovery capability of the State (2004, p. 1005). Water is human right The overriding argument that supports the other end of the equilibrium is that which posits that right to water is a universal fundamental right (Shaw 2009). The 25th Article of the Universal Declaration of Human Rights (1948) may not explicitly mention water (see Barlow 2011; Shaw 2009), but it refers to the right to food. And, essentially, right to food includes water. Since water is essential to human life, an access to it should be a basic human right (Grover 2004). Likewise, the United Nations Convention on the Elimination of All Forms of Discrimination Against Women (1979) contains a provision that unequivocally provides for adequate nutritious foods and clean drinking water. Particularly, the South African Charter of 1955 did not contain the word “water”. However, its later version – the South African Constitution in 1996 – is categorical in holding that everyone has the right to have access to adequate water. The water-as-human-right argument is very eloquently argued for by the Bolivian water minister, Abel Mamani, in 2006 just before the World Water Forum. He held that water is a fundamental human right. In fact, it is a prerequisite to the realization of other human rights. In addition, he advanced that water really belongs to the earth and – by implication – to all living beings. For this reason, it is everyone’s duty to protect our access to water for all life forms and for the earth itself. Likewise, it is said that water is a public good; and, consequently, its management should be public, social, community-based, and participative. Or, it could be anything else but economic or profit based. Moreover, Mamani posited that water never be commodified. He called for withdrawal of water from all free trade and investment agreements. Finally, he said that there should be profound or radical change in the organization of World Water Forum by accommodating and allowing the crucial participation by the poorest and those who most need water (Bond 20xx). Simply put, the idea that water is a fundamental human right means that water cannot be likened to a car or a soup that is an ordinary product and poses no problem to be traded (Segerfeldt 2005). For, the intrinsic problem with reducing the universal fundamental right to water to commerce and trade is that it effectively results to exclude the poor people. Clearly, this counters the claim of the water corporations that they actually do an almost altruistic engagement since they principally focus on targeting precisely the disadvantaged. And, just for this, commodification of water is viewed by some quarters as unethical! This is the anticipated result of pricing water, which is said to be scarce (Seabright 2010). For, once priced, water will be taken from the poor to the rich and from poor rural areas to posh and rich urban residence. The poor will be left out, specifically when the price of the water goes up well beyond affordability (Glover 2004). Naturally, the demands of the rich people are surely going to override the needs of the poor and even the limits of nature. Access to water needs to be determined by the limits of its renewability; otherwise, the water cycle becomes systematically violated. And when water is overly exploited, the water crisis is definitely going to deepen (Shiva 2011). Commodifying water is being anticipated, too, to be counterproductive. Shiva (2011) recalls that the World-Bank-endorsed economic reform policies relative to privatization of food distribution has created hunger. There were media reports of rotting rice and wheat that were stocked in rice traders’ warehouses, while there were reports too of starvation in another part of the globe. On this basis, Shiva surmises that the privatization of water services will equally bring about thirst and water scarcity. Water is understandably equated with life. For this reason, water is correctly understood as a human right. (Biswas, Rached & Tortajada 2008, p. 22). As such, I should be distributed by the government and not by private water corporations (Segerfeldt 2005, p. 113). The unacceptable role of water corporations Economic globalization also explains the issue of water commodification. In itself, economic globalization effectively integrates the economic systems of different nations in the world into just one and unified global market. It also carries industrial production to higher levels. As it is about unlimited and unrestrained growth, rendering everything to be for sale and sparing nothing from the claws of private greed, economic globalization does not make preservation (such as of water) a priority (Barlow 2011). Now, this brings into surface the role of the multinational corporations (MNC’s) in determining the future of water in the globe. Giant transnational water, food, energy and shipping corporations are now competing to acquire control of water across the globe. They accomplish this by owning dams and waterways, developing new technologies such as water desalination and purification, controlling over the mushrooming bottled water industry, privatizing community water services, constructing water infrastructure and even exporting water (Barlow 2001). But, were these not responsibilities by the governments? Seabright (2010) is blunt in saying that the governments are backing away from these obligations. In fact, the governments have transferred these responsibilities to water corporations – who sell and trade water as a private commodity (Barlow 2001). Clearly, these companies do not water as a social resource that is essential for life. In fact, a close scrutiny of them reveals tales of imposing high customer rates, accounts of dramatic corporate profits, stories of corruption and bribery, disclosures of lower water quality standards, and testaments of overuse of the (water) resource for profit. All of these become expected since what comes first for the water companies is the economic imperative of maximum financial gains. Social and environmental concerns come second – if they are considered still at all (Barlow 2011). Conclusion At the outset of this paper, Seabright (2010) was quoted to have said that the issue of treating water as an economic commodity is very far from being resolved. With the global platform as the locus where debates are usually fiercely happening, the position of the World Bank to bankroll its policy for privatization of water distribution is met by invigorated opposition from activists, environmentalists and communities. In fact, even the World Bank and the United Nations seem to be at odds in this regard. With the former looking at water from primarily and purely economic point of view and the latter from social, environmental, political and cultural considerations, the result is two unproductive digressions (Biswas, Rached & Tortajada 2008, p. 22) and polarization between sectors of society (Morgan 2011, p. 10). And, if there is one thing that they attest to, it is that very clearly no piecemeal solution is going to definitely settle the debate (Morgan 2011, p. 11). References: Barlow, M 2001, Water as commodity: the wrong prescription, Backgrounder, viewed 14 May 2011 (http://www.foodfirst.org/en/node/57) Biswas, AK, Rached, E and Tortajada, C 2008, Water as a human right for the Middle East and North Africa, Routledge, London Bluemel, EB 2004, The implications of formulating a human right to water, Ecology Law Quarterly 31: 957-1006. Bond, P 20xx, When commodification annuls the human right to water, University of KwaZulu-Natal, Durban, South Africa, viewed 15 May 2011 (http://www2.ohchr.org/english/issues/water/contributions/universities/UniversityofKwaZulu-Natal.pdf). Grover, VI 2010, Water: a human right or a commodity? viewed 17 May 2011 (http://www.seroindia.org/articles/Article_VG.pdf). Morgen, B 2011, Water on tap: rights and regulation in the transnational governance of urban water services, Cambridge University Press, Cambridge Royte, E 2008, Bottlemania: how water went on sale and why we bought it, Scribe Publications, Dunedin (New Zealand) Seabright, P 2010, ‘Water: commodity or social institution?’ The company of strangers: a natural history of economic life, revised edition, Princeton University Press, Princeton New Jersey & Oxford UK, pp. 172-85. Segerfeldt, F 2005, Water for sale: how businesses and the market can resolve the world’s water crisis, Cato Institute, Washington D.C. Shaw, M 2009, Water: commodity or human right? Countercurrents, viewed 14 May 2011 (http://www.countercurrents.org/shaw240309.htm). Shiva, V 2001, World Bank, WTO and corporate control over water, International Socialist Review, viewed 14 May 2011 (http://www.thirdworldtraveler.com/Water/Corp_Control_Water_VShiva.html). Snitow, A, Kaufman, D. and Fox, M 200, Thirst: fighting the corporate theft of our water, John Wiley and Sons, San Francisco (CA) The Economist, (July 19) 2003, Survey of water, viewed 14 May 2011 (http://www.economist.com/node/1906846?story_id=1906846) The World Bank 1992, World Development Report, viewed 16 May 2011, (http://wdronline.worldbank.org/worldbank/a/c.html/world_development_report_1992/) The World Bank 2011, Water resources management, viewed 15 May 2011, (http://water.worldbank.org/water/topics/water-resources-management) Read More