From Socialist Voice, July 2005


Reclaiming public water

Belén Balanyá, Bríd Brennan, Olivier Hoedeman, Satoko Kishimoto, and Philipp Terhorst (editors), Reclaiming Public Water: Achievements, Struggles and Visions from Around the World (Amsterdam: Transnational Institute and Corporate Europe Observatory, 2005; ISBN: 90-71007-10-3; €12.99)

Reclaiming Public Water is a powerful attack on the neo-liberal consensus that permeates water and privatisation debates throughout the world. It does this through a range of international case studies that show that publicly owned water supplies are a success, and can in fact be more efficient, and more democratic, than the private option.
    These examples come straight from those involved either in the water utilities themselves or in the fight against privatisation. Again and again the book shows that privatisation, from France to Argentina, has been a tragic failure, resulting in rising prices, failing services, and corruption, and hitting the marginalised and poor the hardest.
    The significance of the book is that it provides indisputable evidence of numerous alternatives to the neo-liberal slogan of “no alternative.” Fifteen of the articles contain working examples of public water utilities, including western examples in France and Germany. These water utilities are often decentralised and locally run and have low prices, long-term investment, and planning; and where tariffs are charged they are charged progressively in order to protect the poor and enforce water as a substantive right for all citizens to enjoy. Fundamentally, these enterprises also generally arose out of popular democratic movements, either from traditional market failure or from the disastrous privatisation of previous publicly owned utilities. They have also arisen from the success of left-wing movements, such as in the state of Kerala in India or under Chávez in Venezuela, that are openly opposed to the neo-liberal agenda.
    An important aspect in most of these developments, and specifically noted by the editors throughout the book, is the active participation of citizens and civil society in the organisations. This participation has proved to be the key to the success of these organisations. It has avoided the inertia and unaccountability experienced with former state-run industries, which often resulted in as much inefficiency as private firms. It has also helped make these enterprises more resilient to the pressures mounted against them by domestic elites, Western governments, and international financial institutions.
    Reclaiming Public Water helps strip away the façade of neo-liberalism to show its true agenda and anti-democratic nature. Throughout the examples, international financial institutions such as the World Bank use methods such as imposing privatisation as a condition for loans, or forcing developing countries to privatise in order to pay debts. Western countries use similar tactics. In Indonesia, for instance, France provided loans for water treatment facilities and then, when the water industry was privatised, saw to it that it was sold to the French water giant Suez Lyonnaise. In addition to this, existing publicly owned services are being undermined from within through the enforcement of commercialisation and sub-contracting or, in Europe, by the European Union through the European Water Framework Directive. This directive forces all water prices to be at full-cost calculation.
    Where privatisation does occur the company is usually sold to a western firm, such as Suez Lyonnaise, Bechtel, or Thames UK, or one of its subsidiaries. Even in Slovakia, where the domestic firm TVS corruptly gained a former state water company, Suez Lyonnaise bought a controlling stake in it. Clearly, far from creating competition, privatisation is merely creating markets for western capital. This is obviously to the detriment of local industry but also to the detriment of the people, with the result always being higher prices, worse quality of service, and a complete lack of long-term investment.
    In developing countries it also has a negative impact on the infrastructure necessary for development and is often accompanied by an increase in disease as a result of poor services. These international firms lack local expertise and experience and are unaccountable to the local people. They are also unaccountable to the domestic elites, because of their huge economic power and backing from international financial institutions.
    One problem with the book is its failure to emphasise that this is about more than just water. It seems to suggest that international financial institutions will see sense and act in the interests of democracy if sufficiently pressured. While there is nothing inherently wrong with this belief, it does seem rather naïve and without a basis in reality. This is especially true following the contradiction exposed in the book between neo-liberalism and democratic, publicly owned water services. At the same time these problems are not confined to water but apply to all public services and major industries. This is particularly the case in the developing world, where international firms that have their headquarters in the west are allowed to buy up domestic firms and former state firms. More often than not this is part of restructuring or privatisation as imposed by international institutions or western states.
    The result of this process is now clear: the bankruptcy of national governments; sweatshops; the destruction of domestic industry; and increasing poverty. The West has not been left untouched by it either but has instead experienced the destruction of its own public services, increasing inequality, job insecurity, and job losses.
    In addition it misses the fact that this development has a material basis in the West, that of capital ownership.
    Reclaiming Public Water is well worth the read, even if only to reinforce one’s belief in publicly owned property. The book will also be particularly useful to those in the North who are now facing the imminent threat of privatisation by the back door. This is due to the failure of the British state to adequately invest in water infrastructure in the North, and it is now seeking to “solve” this by introducing water charging and an independent firm to operate the water system. This is despite huge opposition on both sides of the political fence, and the experience of water privatisation in Britain, which can hardly be touted as a success story. If the moves in the North are successful it is possible that similar moves could occur in the South.
    This books helps highlight the alternative that must be fought for, north and south: that of publicly owned and publicly run services, and water as a fundamental right.

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