- The Washington Times - Saturday, April 8, 2006

MEXICO CITY.

The Fourth World Water Forum, just concluded here, was marred by a series of logistical nightmares. But not all participants suffered equally. Some waited four to five hours in line simply to pay and register for the conference.

Afterward, attendees faced long cues for buses (since taxis weren’t allowed into the vicinity of the conference center) and security. But special line-jumping and transportation privileges were extended to (nonpaying) politicians, such as Japan’s Prince Naruhito and His Royal Highness Willem-Alexander, prince of Orange of the Netherlands.

As it was with the Water Forum, so it is with water. In most poor countries, governments dole out water as a special privilege and at a low cost, mainly to the wealthy and politically connected elite. Meanwhile, the poor masses are left waiting.

At the water forum, the losers were mainly relatively wealthy people denied cultural offerings such as Mexican artist Diego Rivera’s “Water: The Origin of Life.” In the real world, the poor are denied access to life-preserving clean water.

Water infrastructure in Mexico’s urban areas is decrepit, leaking and failing. Jesus Campos, a representative of Mexico’s water regulator Conagua told the Forum consumer water prices are 10 times less than the water systems’ operating costs. But this subsidized water is available only to those with political connections. The poor lack such connections and so are far less likely to have a water connection. For those lucky enough to have a connection, water is supplied only intermittently.

Because of how water is allocated in a politically controlled system, revenue is typically too low to pay for necessary maintenance, let alone extend networks or engage in watershed conservation. Yet oddly, such government-induced water scarcity has fueled opposition to private provision of water.

The most vocal opponents — who regularly demonstrated in Mexico City — are part of a broader group referred to by Latin Americans as globophobicos (literally, those who fear globalization). These globophobics are big on rhetoric but small on solutions. Professional activists, public sector unions and other vested interests, they travel the world to preach their disdain for globalization. They condemn the official water forum as a corporate boondoggle — even though a majority of participants are individuals who have dedicated their own intellectual and entrepreneurial skills to important water issues.

The ideological globophobics are essentially nihilists, completely ignorant of the underlying issues they address in their campaigns. But their actions prevent the very reforms that would help the truly disenfranchised.

In Mexico, the activists co-opted one marginalized community — the Mazahua — whose water was taken without compensation by the Mexican government, giving them a legitimate grievance.

Opponents argue water should not be owned, traded or sold for “a profit” — whether by the Mazahua or businesses — because it is a “common good” and a “human right.” This perspective suggests complete obliviousness about the economic nature of water scarcity, as well as to the fundamental rights that have been infringed. Latin American governments have a poor track record in upholding the legal rights of indigenous communities; ironically, the globophobics legitimize this abrogation.

The relative merits of private and public systems speak for themselves. Chile, for instance, has a market-driven water system, defined by enforceable and tradable private property rights. In less than 30 years, the country achieved universal, 24-hour-a-day access to potable water in urban areas, and 95 percent of rural areas. These private water providers, most owned by locals, generate enough revenue for investing in extending sewerage networks and wastewater treatment.

Chile’s water management has also benefited its farmers. Because they must pay the full costs of water, they use it more efficiently by growing higher-value crops or selling marginal units to urban users.

By contrast, government-run water systems treat their poorest citizens with disdain, as if they are a burden on already failing public services. For those who do get a connection to the government-run system, there is no guarantee water will flow from the tap, or if it does, that will be suitable for human use.

In rapidly urbanizing Africa, for instance, a government water connection requires individuals to live inside the urban boundary and to have formal title to their land.

So governments absolve themselves of the obligation to extend water connections (and other public services) by denying land tenure to the poor and refusing to extend urban boundaries to slums and shanty towns on the urban periphery, where a majority of the poor live.

In contrast to governments, entrepreneurs in poor countries view additional people as an opportunity — not a burden. Across the world, from Nairobi to Accra, from Dhaka to New Delhi, the urban poor are not waiting for government to remedy its self-imposed scarcity of water and sewerage services.

Instead, small-scale entrepreneurs are using markets and — gasp — earning a profit in doing so.

These small-scale businesses in poor urban areas are both competitive and innovative in delivering water and sewerage services to other residents. In one New Delhi slum, a local entrepreneur built a private pipe network, and 80 households pay for water to be delivered twice daily.

These solutions are not perfect. But they are far better than the alternative. Yet the entrepreneurs providing the services are forced to operate in the informal economy because governments consider their activities “illegal.” That imposes huge “transactions costs” — there are no contracts, so both parties rely upon local reputation — meaning the businesses cannot grow beyond the neighborhood and consumers are not guaranteed clean water. Meanwhile, government officials are able to exact bribes to ignore these activities.

One straightforward policy to address water and sewerage scarcity would be for national and local governments formally to recognize the legal existence of the poor and their businesses — as argued so eloquently by Peruvian economist Hernando de Soto. This “bottom-up” approach is at odds with the top-down solutions advocated by global agencies, national and local governments at the Fourth Water Forum, and even the activists. But where water is concerned, poor people need results — not rhetoric.

Kendra Okonski is editor of “The Water Revolution” (just out from International Policy Press) and environment program director of the International Policy Network in London, England.

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