WATER PRIVATISATION-SOLUTION OR A PROBLEM?

Another boring article from my side. This one has been written for the economics magazine of our college. U can read first para n jump last if u wish to or u can read alternate ones..anything u wish..n leave ur comments if u wish to!!!Heartiest thanks to those who read it completely!n also to the ones who "try to"!

"India has recently seen an important development on the water entitlement issue with the state of Maharashtra passing, after years of study and EXTENSIVE consultation with civil society, local communities and all political parties, the Maharashtra Water Resources Regulatory Authority Act, 2005, the heart of which is the creation and management of a water entitlement system" says John Briscoi, senior water advisor, World Bank(Hindu, 22nd March 2006)
It’s interesting to know how the bill was passed on the last day of Maharashtra’s assembly amidst other 16 bills. The bill was not read, forget being debtated by the assemply but yes certainly passed. And the result? World bank announced Rs.1700 crores towards water projects in the state.
More interesting is the "two-child norm" on which this act is based on. It says that if the farmer has more than two children, he will have to pay one and a half times the new rates of irrigation. Thankfully the law has not been enforced yet!
As India is moving towards becoming world’s one of the fastest growing economy, at the same time it is also easily succumbing to the pressure of International Organizations like World bank and IMF to move towards privatisation. Privatisation of water is becoming one of the most disturbing trends in developing countries. According to an estimate by Mande Barlow, "water business" is worth $400 billion(annually) worldwide.
In 2005, through filing an RTI by Parivartan, an NGO exposed on how Delhi Jal Board changed its criteria, deleted scores by officials for giving a multi-million water supply contract to PriceWater House Cooper(PWC). Arvind Kejriwal of Parivartan aptly termed it as an "ideological corruption".
Water Privatisation is infact one of the conditions that determine the extent of loan under World bank’s Assistance strategy.
Many countries under the pressure of World Bank privatised water distribution. Suez, a French multinational increased water rates by 140% in South Africa forcing 11% of the community to reply on river water. This led to 1,20,000 people being affected by Cholera. Bolivia is another country where water privatisation led to manifold increase in water rates. All those who couldn’t afford it were denied water supply. Masses led by Oscar Olivera protested against this injustice which eventually led to the set up of an enterprise which is neither private nor state-owned. As Mr.Olivera puts in "Private enterprises are for rich people and state enterprises are basicallt private enterprises of a political party". True to an extent
World Bank it seems is propogating "Survival of the Richest".
Chile and Latin-America rejected privatisation of state run water company. Uruguay went ahead for an amendment in their constitution saying, "Water is a natural resource essential to life. Access to water and sanitation are ‘fundamental human rights’ and ‘public service of water supply for human consumption wil be served exclusively and directly by state legal persons" India today needs to learn from such a small African Country working for its "aam aadmi".
It’s inefficiency on the part of government they say is leading them towards Privatisation.Leakage losses in Delhi are as high as 40%, highly inefficient for sure but is privatisation the answer?
Rajendra Singh, perhaps can be termed as "Water God", revived five dead rivers in dry state of Rajasthan, has since 1985 built some 4,500 earthen check dams, or johads, to collect rainwater in around 850 villages in 11 districts in the State. Residents of Neembi in Jamwa Ramgarh tehsil of Jaipur district spent Rs.50,000 in building johads and is today earning around Rs. 3 crores annually by selling agricultural products.
Some further argue that increased prices will lead to greater incentive for producers to produce more of the good and better efficiency! Sounds a good justification for propagating free market theory involving basic necessities and making richer "more" richer.
Another set of argument says that privatisation is the only effective way to deal with "water crisis". The very concept of terming the situation as "water crisis" is questionnable. Billions of litres of water guzzle out daily in private water parks, golf course all over the world. There is never a "water crisis" at such places. Coke itself used 283 billions litres of water worldwide in 2005. We already know what happened in Rajasthan.
The solution doesn’t lie in privatising. We have seen it through examples all over the world that privatising basic commodities will only led to exclusivity of water consumers (if that term can be used). MNC’s are certainly not charitable organizations, their aim cannot be prosperity of common man but just profit as seen in countries like Bolivia, Canada, Argentina, South Africa. One can understand any businessman making profit but making profit at the cost of human misery is an unpardonable offence.
In France, "Electricite de France", a government owned company provides 95% of electricity in France and ranks as the world’s largest electircity company in terms of production capacity.
Delhi Metro is the perfect exampls of how public sector can run as efficiently as an successful private company.
Solution lies in forming water cooperatives as already in existence in towns of Rajasthan where people are coming forward, collecting money to build their own water distribution system. Government has also formulated a policy to encourage such cooperative efforts in water resource management and distribution giving 50% grants to such water cooperations. Obviously it should be 100% funded by the government but as it is said "something is better than nothing".
In 1990 Nobel Laureate Octavio Paz in his Nobel Lecture said, "Market economy cannot be simply a cause for joy. As a mechanism the market is efficient, but like all mechanisms it lacks both conscience and compassion.
We must find a way of integrating it into society so that it expresses the social contract and becomes an instrument of justice and fairness. The advanced democratic societies have reached an enviable level of prosperity, at the same time they are islands of abundance in an ocean of universal misery. A society possessed by the frantic need to produce more in order to consume more sends to tends to reduce ideas, feelings, art, love, friendship and people themselves to consumer good. Everything becomes an item to be bought, used, and then thrown on the rubbish dump."