Socialist Worker

How water offers a river of profits for global capitalism

Our commodities series looks at how we are being forced to pay for water

Issue No. 1950

Every Major city in Europe is near a river — Rome on the Tiber, Paris on the Seine and London on the Thames. The earliest civilisations grew in river valleys. For most of human history water was a communal resource.

Although the collection of water has sometimes required great effort, water has been free, safe to drink and relatively abundant. In the last 15 years this has ceased to be the case.

Across the world 1.1 billion people lack access to adequate, safe water supplies, 2.4 billion people have inadequate sanitation and 80 percent of illnesses are water related.

At the same time water consumption in homes, industry and agriculture is rising, nearly doubling in ten years.

The intergovernmental agencies, with their neo-liberal thinking, opened the door for companies to come in, settle, establish connections and charge unfeasibly high prices for a basic necessity of human life. Water became a commodity.

In the early 1990s the World Bank undertook a review of 120 water projects. The governing authorities were performing well in only four countries. While the projects failed, households were spending up to 20 percent of their income on water from vendors in cities such as Lima, in Peru, and Port-au-Prince, Haiti.

The argument goes that governments are incapable of delivering safe water, so it must be taken over by the private sector. Efficiency and conservation will then prevail. The managing director of one of the largest water companies, Vivendi, summed up their logic, “If you don’t pay for something you will not appreciate it.”

But what if you can’t pay for it? For the people of Kwazulu Natal, South Africa, the result was death. When they could no longer afford water they drank from streams. The ensuing cholera outbreak killed more than 250 people — the worst outbreak ever recorded.

Only 10 percent of water is used for drinking. Industry uses 20 percent and the remaining 70 percent is used for growing crops and irrigation. So it is here that there is the most money to make, and those who benefit most from irrigation are not usually those who need it most.

The poor lose out first when dams are built. Conservative estimates put the number of people displaced by dam building at between 40 and 80 million, often from indigenous groups.

When a stretch of untamed river is put behind a dam the rights of the local inhabitants to fish in the river or to quarry its banks are lost. Not only the water but fish, sand and shorelines become subject to licensed exploitation, only those with cash or bribes can use them.

Water systems were also sold off in Britain. The Tories privatised the water industry in 1989. From 1989 to 1995 the companies saw profits multiply nearly seven-fold.

In 1994 12,500 households were disconnected from water supplies because they couldn’t pay. Water companies are no longer allowed to disconnect but 9 percent of their revenue was estimated as unpayable customer debt in 2002-3.

Fortune magazine noted in May 2000, “Water promises to be to the 21st century what oil was to the 20th — the precious commodity that determines the wealth of nations.”

But as some companies have discovered, providing water to the poor is not always profitable. And when people can no longer afford to pay for something without which they will die, they tend to fight back.

In 2000, Bolivia’s government leased its water supply to the US multinational, Bechtel Enterprises under pressure from the World Bank. This was not benevolent aid — the company was promised a 16 percent average annual return on its investment.

Almost overnight the price of water rose to a third of the minimum wage. In the Bolivian city of Cochabamba, there was a mass, broad-based uprising to throw out Bechtel.

Finally, after one reported death, hundreds of arrests and multiple injuries at the hands of riot cops and armed soldiers, the Bolivian government gave in and declared the contract with Bechtel void.

Leaving control of water in the hands of the multinationals will make water supplies to the world’s poor far worse.

That water can be sold to make money for capitalists is a relatively new idea that has had disastrous consequences. But the idea that the profiteers are constantly in search of new markets at the expense of human lives is not.

The key to providing safe water supplies is dialogue with local communities and funding based solely on the needs of people not on filling the pockets of fat cats.


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