Water Privatization

 Since Vandana Shiva is such a big opponent to the privatization of water, I did a little background research on the subject. Because so far, my impression is that water wars do not take place between countries, but between private coporations and local citizen.


In recent years, neo-liberal policies focused on the privatization of water. Capitalist companies have begun to use especially urban water supply systems as a source for economic growth and profit (Swyngedouw 2007:53). In the countries of the global South, the reforms have reworked the government's provision of public services. At the same time, water privatization has become a controversial discussed issue because it leads to civil protests all over the world (Bakker 2010:3).

Privatization is a transfer of entitlements that can be defined as a “process through which activities, resources, and the like, which had not been formally privately owned, managed or organized, are taken away from whoever or whatever owned them before to a new property configuration that is based on some form of 'private' ownership or control” (Swyngedouw 2007:52). The part of this definitions that is most likely to be a source for discussion is “...are taken away”. Behind this stands the assumption that resources already belong to someone before they get privatized.

Since the inception of urban water systems, there have always been changes in the public-private partnership. Until the mid of the nineteenth century, the system was characterized by a range of small private companies within a city that provided water of varying quality. After that followed a period of municipalization in which providing essential public goods was more important than making profit. After the end of the Second World War and the rising of the nation state, the water industry became a growing national concern. The governments invested big in water infrastructure that went along with new jobs, generation of demand from the private sector and the providing of basic collective production and consumption goods (Swyngedouw 2007:53f).

Since then, a major shift in the public/private relationship in the water sector took place, initiated through the demise of state-led economic growth. The nations suffered from payment difficulties. The call for greater competitiveness within the water supply system was accompanied by privatization tendencies. Investors searched for new investment possibilities. One possibility was to turn water into capital and profit (Swyngedouw 2007:53f).

Behind privatization strategies often stands the wish of the public sector to strengthen its financial position and to improve competitiveness of the economy. In terms of developing nations, the idea of privatization includes structural adjustments and an economic push to stabilize these nations within the world economy (Glade 1991:2). But at the same time, a country’s society is more concerned about direct welfare effects of private over public management than about the economic growth that comes along with privatization. These welfare effects could be related to the access to public services and their prices, job losses or corruption (Chong 2007:3).

In Latin America, privatization found its way into the relationship between a state and its citizens after the economic crisis in the 1980s, with the goal to reduce fiscal deficits and inflation and to liberalize the economy. Nevertheless, the inhabitants of Latin American countries take a critical stance towards privatization. According to the Latinobarometer 2006, only 30 percent of Latin Americans are “satisfied or very satisfied” with the results of privatization of public services, “considering price and quality”. Reasons therefore are among others the fear of social exclusion and the distrust in economic elites (Chong 2007:1f).

Despite to the negative view in the population, according to Chong, water privatization decreases poverty and inequality in most cases, since it leads to a reduction in common diseases through the improvement of water quality by privatized companies. However, the nation's governments need to have strong economic and political capabilities to regulate the companies and make the lower social class benefit as well (2007:4).

Alberto, Chong. Privatization for the public good?: Welfare Effects of Private Intervention in Latin America. Harvard University Press: Cambridge, MA. 2008. Print

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

Swyngedouw, Erik. Dispossessing H²O: the contested terrain of water privatization. In: Heynen, Nik (ed.). Neoliberal Environments. False promises and unnatural consequences. Routledge: New York. 2007. Print. pp. 51-62.