Pros And Cons Of Water Privatization

Other advocates of water privatization argue that private entities, assuming not government subsidies, would be forced to price water at its actual economic value. This would decrease unnecessary uses for water, like cleaning one’s car too often because doing so would become too expensive for many people. There are benefits to pricing finite natural resources relative to their supply levels. In fact, Herman Daly in his book Beyond Growth, suggests such pricing as a response to capitalism’s wanton use of finite materials. However, because water is necessary for life, there are also considerable drawbacks. Privatizing the price of water means that a government would abdicate its ability to provide water to those who cannot afford it. Although

In Bolivia, for example, the national “government privatized the water system of Cochabamba, partly in response to pressures from the World Bank to make structural adjustments to its economy” in 1998. The pressure from the World Bank stemmed from the fact that multiple investment banks had invested money in the Cochabamba public water sector and seen little to no improvement. Before privatization, only 60% of the population was connected to the water grid and that percentage only had access to water for four hours a day. The private company, International Water Holding, announced that citizens should anticipate increases in water bills, but that commercial water users would be more affected than poorer individuals. However, some individuals saw their water bill more than double. For those who could not afford a water permit, access was denied. Furthermore, the Bolivian Parliament granted exclusive water use rights to International Water Holding, of “community-based water systems that local communities had built with their own funds.” The price increase and rights transfer of community water invoked a number of violent protests in which nine civilians were killed. The contract was cancelled in 2000 in response to these

However, such a program contradicts the nature of a private system. Here arises the fundamental problem with privatizing water utility. A private entity is more responsible for profit to itself than it is quality to its customers. In fact, private water utility companies often forgo efforts which could improve quantity and quality of the water if the problems are long-term or do not prevent the accumulation of profit in the short-term. , An alternative to a private water utility company are “independent, special-purpose water agencies or districts [which] can have technical and financial capacity equal to private corporations,” meaning they function similar to private entities, but are owned publicly.

Another aspect of water privatization is the bottled water industry. The bottled water industry provides an example of how companies act unethically in order to make profit. The Chairman of Nestle, the largest producer of bottled water in the world “Peter Brabeck-Letmathe, believes that ‘access to water is not a public right.’” He beliefs are evident in Nestle’s actions in