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The 3rd World Water Forum, which has just ended in Kyoto, seems to have been a pretty typical UN boondoggle.  No less than 24,000 people flew in from 182 countries for a week of conference junketing.  If their air flights didn’t warm the globe, the hot air from their mouths will have done so. 

The Japanese Minister Chikage Oogi set the tone by ignoring the matter in hand.  She started off banging on about overpopulation rather than water, and when she finally got onto water, all she could manage were pious exhortations to the delegates to move, "from promise to practice, from commitment to concrete projects, and from intent to implementation." 

The ending was no better.  Most conferences manage to produce some high flown rhetoric to send the delegates home smiling, but the best this organizing committee could manage was to settle back on their, presumably so far unachieved, promises of three years earlier.   They would be "solemnly committed to facing the global water challenges and to meeting the goals set forth at the Millennium Summit of the United Nations in New York, 2000."  Well, at least it’s a solemn commitment.  

In between the usual gang of “has-been” statesmen delivered their political messages.   Mikhail Gorbachev, who is currently president of Green Cross International, also forgot that he was at a water summit and devoted most of his speech to bashing America.  He told the delegates that the war in Iraq "undermines international law and democracy."   Eventually one of his handlers passed the right speech to him and he managed to come up with the helpful recommendation that a right to water be included in the Universal Declaration of Human Rights.   Does anyone think that making water a human right, or even declaring 2003 the United Nations International Year of Freshwater will turn on a single tap?    With one exception, the summit produced nothing but this sort of blather.  Click here to read the resolutions.  The delegates should be ashamed of themselves.  

The exception – water privatisation

Providing clean water is expensive.   Reservoirs need building, pipes need laying, and water purification and sewage treatment plants need to be built.   It has been estimated that it will cost £180 billion over the next 10 years to reduce the number of people without clean water by half.   The issues are twofold.   Who will pay for this, and who will do the work?  

Paying.

It is inconceivable that rich country governments are going to cough up this sort of money in foreign aid.  We only have to look at the resolutions of the forum to see that even their promises are for only a few million dollars here and a few million there.   Aid can no more provide clean water for the developing world than it can feed it.  Sure there is a place for aid for some of the poorest people over the short term, but no more than that.   Another source would be the taxes of the citizens of developing countries.  This will provide some of the needed funding but it carries considerable risks.  Many developing country governments are corrupt.   Often their tax revenue is spent on services for the electorally important middle classes in the cities rather than the rural poor.  People who pay taxes but get no water will resent the imposition and often refuse the needed investment.  The fairest way by far is water charging.  Those who get the water pay for it, and by charging, they are encouraged to reduce waste. 

Providing

Here there are two choices, the public and the private sector.   Private companies can easily provide clean water so long as they have a reasonable reassurance both that their investment won’t suddenly be expropriated, and they are allowed to charge either their customers directly via fees or indirectly via government grants.  The trouble is that they tend to appear more expensive than the prices quoted by public companies.  

When people invest their own money they like to see a return on their investment that correctly reflects the investment risk.  

Public (i.e. government) water providers usually claim to be cheaper.   The problem is their cheapness is often an illusion, and their services are typically much worse.  Politicians and the executives of public companies can easily bid lower than private companies safe in the knowledge that they don’t risk expropriation by the state, and that nothing much will happen if they fail to deliver on their promises.  Water projects are long-term investments and the mistakes of one administration usually only make themselves visible when their successors reach power.  Politicians and administrators move on.   The blame can easily be shifted. 

Anyone with any experience of government and privately provided services can see the difference.   Private companies always provide the better service, and obey the regulators rulings better than their public counterparts.   The example of the UK privatised water utilities is detailed here. 

More importantly private water companies do better in developing countries as well.  The data from Africa (click here for details) show a clear trend to better service from privatisation, although some of the authors of the studies have refused to believe their own findings.   The most recent study from Argentina is perhaps the strongest yet.  The improvements in water supply consequent on privatisation have led to falls in infant mortality in the states that privatised the water.  Click here for details.

However, the quoted price differentials seem to muddle the sillier types of bleeding heart western handwringers.  Their state sponsors of course want government water companies because it increases their political power.    The NGO delegates from western countries pretty much all opposed water privatisation.  According to them water is special.   

We agree.  We need a reasonable amount of clean water to drink and wash and lots more less pure stuff to grow crops, feed animals and run industry.  That is why it should be delivered reliably and efficiently.  That means by accountable private companies, rather than corrupt state ones.

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Last modified: September 20, 2006