Economist.com | Articles by Subject |
10/23/2007 12:14 PM
Articles by subject: Topics: The environment
Go
Saturday June 22nd 2002
About
LEADERS
A soluble problem
Mar 23rd 2000
From The Economist print edition
| My account | Log out | Help
Printable page
E-mail this
Growing pains
Mar 23rd 2000
Running water
Mar 23rd 2000
Much of the world’s fresh water is wasted. Governments are
shying away from the answer: to price this valuable
substance correctly
The environment
Backgrounders
Surveys
Style guide
Internet guide
More about...
WHAT could be more basic to life than a drink of water? Yet more
than a billion people have no access to safe water. Three times as
many lack adequate sanitation. To disease is added the prospect
of drought. Many water tables, from Mexico to China, are falling
by a metre or more a year. More than half of Europe’s cities are
exploiting groundwater at unsustainable rates. On present trends,
world demand for fresh water will grow sharply, by 70% (for
household use) by 2025. Shortages seem inevitable—and even
war.
This dismal reckoning lies behind the big world water summit held
this week in the Netherlands. As the biggest gathering of
everybody concerned about water, it ought to have marked a real
turning-point. Yet the summit was let down by the two groups
with the biggest role in shaping policy: ministers and nongovernmental organisations (NGOs).
Full contents
Subscriptions
The right starting-point for them should be to acknowledge that
much of the water is now squandered. Despite looming shortages,
most domestic water use is still not metered, so householders
file:///isha/pricing:trade:PSP/economist%20water-price.htm
Page 1 of 3
Economist.com | Articles by Subject |
Economist.com
10/23/2007 12:14 PM
have no incentive to turn off their taps and hoses. Worse,
subsidies worth billions of dollars serve positively to encourage
water wastage in industry and, above all, in farming (see survey).
Whatever use God intended for the Saudi desert, it was not to
grow wheat.
The Economist
Global Agenda
Contact us
About sponsorship
Advertising info
The way to make water available to everybody, everywhere is
rather simple: to price it at a level above the cost of its provision
and disposal. This would mean that scarce supplies would be put
to the best use by the people who most needed them. And it
would make it easier to get private firms to invest in and improve
both water supply and sanitation.
Here traditionally dirigiste France, home to the world’s two largest
water multinationals, has much to teach free-market America,
home to thousands of state-owned and municipal monopolies.
Many state-owned water bureaucracies are bloated and corrupt,
and sanitising them is beyond even advanced political machinery.
Under-regulated private companies can be prone to corruption
too. But France and other countries have learnt that governments
and consumers find it easier to impose efficiency and best
behaviour on private companies than on their own bureaucracies.
In any case, governments can no longer afford to run the water
business, especially in poor countries. They need private firms to
find the extra $100 billion a year in investment that is needed to
keep the water flowing during the next 25 years.
Trickle-down effects
Although the world’s water bureaucrats may understand this
diagnosis, they have too much to lose to embrace the cure. The
pity is that those most likely to shame them into reform, the
NGOs, are equally uncomfortable with being seen to back profits
for multinationals. Dogma is blinding many to the fact that the
people who stand to gain most from the pricing and private
management of water are precisely those—the poor and the
thirsty—whom they claim to represent.
An immediate benefit from pricing would be to encourage the
proper distribution of subsidies. If any subsidies at all are justified,
they should go to the poor: rather than money and water flowing
to tidy middle-class lawns and acres of alfalfa, both should go to
stand-pipes in the slums. But private-sector participation is also
the best way to improve sanitation and supply for the poor (see
article). It was not the government that invested $1 billion in
Buenos Aires to upgrade equipment and expand supplies to 1.6m
people. It took a joint effort by private firms and government to
provide cheap water to the poor of La Paz. The poor care far less
file:///isha/pricing:trade:PSP/economist%20water-price.htm
Page 2 of 3
Economist.com | Articles by Subject |
10/23/2007 12:14 PM
about profits flowing to private firms than about water flowing
from their taps.
Copyright © The Economist Newspaper Limited 2002. All rights reserved.
Legal disclaimer | Privacy Policy | Terms & Conditions | Help
file:///isha/pricing:trade:PSP/economist%20water-price.htm
Page 3 of 3