Is water privatization a good idea? - On the Green Fence

Summary

This podcast episode explores the implications of water privatization, emphasizing its impact on pricing and accessibility. Water policy expert Narin Prasad discusses the historical shifts between private and public sector control, highlighting the private sector's profit-driven approach and its tendency to increase tariffs. He argues for water as a basic human right, suggesting that any private sector involvement must respect this principle and contribute positively to water management without exploiting communities or governments.

Takeaways

• 💰 The main aim of private enterprises is profit maximization, which often leads to higher tariffs for water services but does not necessarily improve water quality.
• 🌎 Water is a basic human right, and its management should prioritize affordability and accessibility for all, regardless of whether it is provided by the public or private sector.
• 📈 Historically, there has been a fluctuating trend between private and public management of water services, with periods of privatization followed by re-municipalization due to various reasons including health concerns and economic crises.
• 💡 The private sector can contribute to the water sector through innovation and investment, but it must be regulated to ensure it does not exploit the essential nature of water for profit at the expense of the public.
• 🚀 The role of the private sector should be carefully defined, with a focus on reinvesting profits back into water infrastructure and respecting human rights obligations.
• 🏛️ Good governance is crucial in managing water resources, whether by public or private entities, to ensure sustainability and avoid exploitation.
• 🔄 The dynamic of water privatization shows that it is not a one-size-fits-all solution; it requires careful consideration of local contexts and the potential for fair distribution and sharing of water resources.
• 🌊 Water scarcity is a growing global issue, with nearly two-thirds of the world's population experiencing severe water scarcity at least one month per year, highlighting the urgent need for sustainable water management practices.
• 🌍 A few countries hold a significant portion of the world's freshwater, raising concerns about potential conflicts and the need for international cooperation in water resource management.
• 🛑 The imposition of privatization by international financial institutions as a condition for loans has led to negative outcomes in some cases, emphasizing the need for countries to assert control over their water resources.
• 📝 Contracts between public and private sectors should clearly stipulate the terms and conditions to ensure that the goal of universal and affordable water access is not compromised.

Q & A

What is the primary goal of private enterprises according to the transcript?

The primary goal of private enterprises is profit maximization.

What is the expected trend for water use over the next four decades?

Water use is expected to triple due to population growth and the impact of climate change on the water cycle.

What are some arguments in favor of water privatization?

Some argue that water privatization could lead to better pricing, less waste, and better distribution even to the world's poor.

What is Narin Prasad's professional background according to the interview?

Narin Prasad is a water policy expert and researcher from Fiji, currently heading the UN's International Labor Organization's Education and Training Program in Geneva, Switzerland. He used to work with a major French water company.

Why did Narin Prasad resign from his job at the French water company?

Narin Prasad resigned because he felt that the principles he had, which included considering water as a human right, did not align with what the company was asking him to do.

What is the historical context of water services and infrastructure development mentioned in the transcript?

Historically, private capital developed water infrastructure, especially in the developed world. However, due to health concerns in the early 20th century, public authorities took control, leading to a period of municipalization. Later, due to conditions imposed by international financial institutions, there was a push for privatization again.

What impact does privatization have on water tariffs and connection fees according to the experiences shared in the transcript?

Privatization often leads to increased tariffs and connection fees, which can be particularly harmful to consumers, especially in developing countries.

How does the private sector's involvement in water supply affect the cost of water for consumers in the US and France?

In the US, private utility services cost about 59% more than public water services. In France, there were instances of significant price hikes, such as in Bayon, where prices increased by 8.5 to 9% immediately after privatization.

What are some examples of where water privatization has gone wrong according to the transcript?

Examples include Bougainville, where water bills increased by close to 88%, and Cape Town, where water charges increased by 600% after a French multinational took over the water provision.

What role can the private sector play in the future of water management according to Narin Prasad?

The private sector can contribute with technology, innovation, and capital, but they must respect human rights obligations, be transparent, and ensure that water coverage is increased affordably.

What are Narin Prasad's suggestions for ensuring that private sector involvement in water supply is beneficial?

He suggests that a certain percentage of profits should be reinvested in infrastructure, and there should be a cap on profits to ensure that the private sector's motive is to recover capital rather than excessive profit-seeking.

What is the current state of global drinking water distribution according to the 'World's Water' report mentioned in the transcript?

Just under 65% of drinking water is located in just 13 countries, leading to potential issues of redistribution and politics around water scarcity.

What are the three principles Narin Prasad suggests for addressing water scarcity and management?

The principles are recognizing water as a basic human right, ensuring fair redistribution and sharing of water resources, and managing and protecting water for environmental sustainability.