Treating Water as Commodity

 From my least entry we know that water conflicts mostly arise between adherents of two opponent ideologies of how to treat water. Today I am going to talk about the "water as commodity" approach and my next entry will be about the "water as common good" approach.


At the end of the last century, international companies like Bechtel or Vivendi expanded their ownerships of water supply systems. The private sector started taking over more and more government owned systems. The nations considered market-based water sectors as the best possibility to face the world's increasing water crisis (Bakker 2010:2). With this idea, they followed the so-called 'market paradigm' that explains water crisis as the result from the absence of water trade: “If water could be moved and distributed freely through free markets, this paradigm holds, it would be transferred to regions of scarcity, and higher prices would lead to conversation” (Shiva 2002: 14). In other words, treating water as commodity leads to an adjustment of water demand and supply. The force of the free market can solve the problem of the water crisis.

Representatives of the ‘water as commodity’ approach are certain that private companies perform better than public services in terms of efficiency, finance and expertise. They argue that water should be treated as an economic good to guarantee water conservation or reduction of pollution. The problems of government management of urban water supplies are “low coverage rates, low rates of cost recovery, low tariffs, underinvestment, deteriorating infrastructure, overstaffing, inefficient management, and unresponsiveness to the needs of the poor” (Bakker 2010:2). In short: according to the 'water as commodity' view, the government has failed and it is irresponsible to not let private companies take over (Bakker 2010:2).

The World Bank and the International Monetary Fund regard privatization of government services as one way to reduce poverty. To achieve the MDG, they strongly support privatization of water. Private sector investors underline the under performance of the public sector in many developing countries to legitimize the commodification of water (Morvaridi 2008:70). Behind this course of action stands the neo-liberal assumption development can be initiated by market-led measures such as free trade, privatization and minimal state intervention (Moravidi 2008:67). Neo-liberals see individuals as “rational economic actors, who operate in the market for utility maximization and are motivated by self-interest” (Moravidi 2008:69). This assumption leads them to the conclusion that public goods and community are not necessary because every individual is responsible for his/her own poverty (Moravidi 2008:69).

Morvaridi argues that it is problematic to give water an economic value, because at the end the poor have to pay charges they cannot afford. In addition, it is the duty of the state to guarantee its citizen access to human rights and basic standards of living, as they are put down in the Universal Declaration of Human Rights (Moravidi 2008:70).

Bakker, Karen. Privatizing Water. Governance Failure and the World's Urban Water Crisis. Cornell University Press: Ithaca and London. 2010. Print.

Morvaridi, Behrooz. Social Justice and Development. Ch.3: Neoliberalism and Social Justice. Palgrave MacMillian: New York. 2008. Print. pp. 67-106.

Shiva, Vandana. Water Wars. Privatization, Pollution, and Profit. South End Press: Cambridge, MA. 2002. Print.