Blue Gold: the privatization of water + it’s effects

Here is a paper I wrote for my Contemporary Ethical Issues class in 2011 on the Earth's water crisis and the impact it's having on the developing world.

Every day we use water. We use it when brushing our teeth, quenching our thirst, washing our clothes, and watering our plants. We are even using water when we may not be aware of it – the produce we eat needs water to grow; if you look at the ingredients of your face wash you will see water listed, and even the jeans we put on in the morning required water in order to be produced. So what would we do if suddenly we ran out of water? Well due to overconsumption and environmental factors such as global warming, this possibility is not far from reality – the UN has already predicted that around 1.1 billion people don’t have reliable access to water. As the earth’s water supply begins running out, areas with more money (namely, regions in the developed world) start purchasing their water from outside sources, both from within their nation’s borders and from other countries as well. In addition, regions are beginning to privatize their water supply, which leads to higher costs and less conservation. The greatest impact is felt by those in third world countries, where their water supply is running short as they are forced to give in to privatization and the exporting of what little water they have to wealthier nations as a way of paying off their foreign debt. It is clear that with its dwindling supplies, water is fast becoming a highly coveted natural resource and there is a great divide evolving between the ‘haves’ and the ‘have-nots’; meanwhile, privatized water corporations show no concern for the real cost this poses to these poorer nations, a cost that far surpasses any financial debt they could ever accumulate: the lives of their people.

According to National Geographic, the earth is made up of approximately 75% water (National Geographic, 2003) – so how could it be that there is a threat to our supply? For starters, 97% of this water is salt-water (Achbar, Bozzo & Litvinoff, 2008) – salt-water is not completely useless, but does require a desalination system to make it useable, which, according to Erica Gies in her article “Water Wars: Is water a human right or a commodity?”, activists oppose on the grounds of being harmful to the environment and high in cost (Gies, 2009). In addition to the majority of the earth’s water being salt-water, much of the earth’s freshwater is polluted beyond use. This is caused mostly by industrialization (Achbar et al., 2008) in addition to population growth and environmental factors (including global warming). Gies says, “The lack of clean water leads directly to a higher incidence of preventable waterborne diseases such as cholera and dysentery, which kill 2.2. Million a year” (Gies, 2009). And as water levels drop, the pollution increases exponentially. Lora Zimmerman, a US Fish and Wildlife Service biologist, as quoted in Doreen Cubie’s article “The Water Wars Move East,” explains: “When flows are low, thermal discharges from power plants and factories also have bigger impact.” She adds that this is because the lower the water levels, the less the pollution gets diluted (Cubie, 2009).

As a region’s water supply begins to run out, they need to look to other regions for their water supplies. The transportation of this water, as well as the cleaning of their own polluted water, comes at a price that both developing and developed countries find hard to afford. For example, it is estimated that by 2019, the US will need to invest $1 trillion to make necessary upgrades to their water supplies (Gies, 2009). Governments begin to see the value in switching to privatization of their water systems because when a water system is privatized, all expenses, such as improved infrastructure or transporting water from one region to another, are paid for by the company. These companies argue that because they specialize in water alone they can provide a more efficient water supply than a public water system can through purchasing supplies in bulk and investigating more cost-effective planning. However, studies show that in the US, privately owned water utilities are up to 50% more expensive than those that are publicly owned (Gies, 2009). Gies suggests this is because private firms have the incentive to charge more for their water in order to earn more money for their shareholders (Gies, 2009). In addition, these private companies have little to no incentive to conserve water because, as activists point out, the more water they sell the more money they make (Gies, 2009).

Privatized water companies are also beginning to realize that there is more value not in simply providing infrastructure to clean local water or in transporting water from one region to another, but in bottling the water to be shipped all over the world. In the short film “The Story of Bottled Water,” they state that the bottled water industry is growing and that people pay nearly two thousand times the actual value of each bottle of water they purchase (Free Range Studios, 2010) – that’s a huge mark-up and one that clearly appeals to big corporations. How do they convince people to pay such heavy prices on something they can get for free from their taps? They convince people that the water from their taps cannot be trusted. They use advertising to make people feel scared and insecure about their tap water and feel an obligation to purchase water in bottled form. The ironic part, as the film points out, is that bottled water is actually less regulated than tap water (Free Range Studios, 2010) – with the exception of developing countries, of course. In addition to the impact purchasing bottled water has on one’s wallet, it also costs a country millions of dollars each year to deal with the empty plastic bottles, which have a huge impact on the environment. Even when ‘recycled’ these bottles don’t necessarily avoid damaging the environment – often they are actually ‘down-cycled’, which means they are turned into products of less value and functionality. These are then shipped to third world countries like India where they sit in giant landfills (Free Range Studios, 2010). Yet again the third world becomes the dumping ground of the rich.

Fig. 1

The third world, it seems, always gets hit with the largest impact whenever there is a crisis and the current water crisis is no exception, despite the fact that developing countries only use 20-30 liters per capita per day (enough to meet their basic human needs according to the UN) compared to some developed regions in the US that use as much as 380 liters per capita per day. As these nations run out of water and money, water privatization seems to be the only answer. “One of the promises of privatization is that it will provide infrastructure,” says Gies (Gies, 2009). With their lack of financial resources, this factor alone makes privatization appealing. Some regions, such as Ghana, Tanzania, and Zambia, were even pressured to switch to privatized systems as terms of their international loans (Gies, 2009). In these regions, the private water companies move into the rural areas and install water meters, some of which operate on a pay-as-you-go basis, meaning that if a person uses up their prepaid funds and has no more money to purchase more, they must go without water. In some rural compounds ‘water stations’ are even set up where locals go to purchase water based on what they can afford (see Fig. 1). In these desperate circumstances, sometimes the local people will damage the water supply infrastructure by punching holes in pipes in order to access free water.

Damage to pipelines is not the greatest concern, however; lack of water is leading to unnecessary deaths. For example, in a rural South Africa, two girls lost their lives when their house burnt down around them while their neighbours watched – unable to afford the water needed to put out the flames (Achbar et al., 2008). Despite the lives being lost and the dwindling supplies, private companies are still taking over Africa’s water supplies; some nations, such as Kenya, are even forced – or at least ‘strongly encouraged’ – to sell the little supply they have to foreign companies in order to pay off their international debt. This leaves the local people an even smaller supply, and it’s all in the name of money.

Money always seems to win out as the leading motivation. According to the documentary Blue Gold, there is more money in cleaning of water than in the prevention of pollution. This encourages companies to focus their attention on ‘the cure’ rather than the solution (Achbar et al., 2008). And in terms of foreign aid, this ‘aid’ is more accurately referred to as foreign investment. Laurence Summers, the United States Secretary of Treasury is quoted as saying, “For every dollar the US contributes to the World Bank, US corporations receive $1.30 in procurement contracts” (Achbar et al., 2008). So as people are lacking water, becoming ill, and losing their lives, it all comes down to the ‘bottom line’, placing money at a higher value than human life.

And this does concern human life. There are, in fact, 2-4 million water-related deaths per year (Bencala & Dabelko, 2008, p. 26) and when lives are threatened, people get scared and desperate and wars break out – in this case, water wars. Water wars, as defined by Doreen Cubie in her article “The Water Wars Move East,” are “fights over who owns the rights to the resources in certain waterways” (Cubie, 2009). According to the article “Water Wars: Obscuring Opportunities” by Karin R. Bencala and Geoffrey D. Dabelko,

“While it does not involve armies on the move, these conflicts carry high stakes – and life and death consequences – for those involved. Conflicts over the pricing of water, large mega-projects such as dams, competing sectoral water uses and limited supplies within sectors have engendered a long record of violent, if not always large-scale or deadly, conflict” (Bencala & Dabelko, 2008, p. 22).

But is the earth’s dwindling water supplies doomed to end in war?

According to Bencala and Dabelko, there is an upside to this water crisis. They argue that the interdependencies between nations over water supply could lead to a need for nations to cooperate rather than battle with one another (Bencala & Dabelko, 2008, p. 23). The article states,

“As nations become increasingly dependent on each other for food and other goods and services, the need to cooperate will become even more imperative. Hence, the challenge for scholars and practitioners alike is to differentiate between the various dynamics that can lead to conflict over water and find ways to capitalize on the range of opportunities for cooperation” (Bencala & Dabelko, 2008, p. 22).

Bencala and Dabelko are not denying the threat of water wars in the future; however, they argue that rather than focus on the negative potentials of worldwide water shortages, the media, politicians, and advocates need to begin “calling for water cooperation” (Bencala & Dabelko, 2008 p. 31).

It is encouraging to think that Bencala and Dabelko are right, and there is opportunity for international cooperation rather than warfare over the world’s water supply; however, in the present state of things, though their reasoning is logical, the future appears somewhat bleak. In order for their theory to play out, big corporations will have to let go of their greed and begin seeing the value in human life. It is not water privatization that is bad, it is the way these private companies choose to operate. As long as greed and thirst for power dominates, then the ‘haves’ will continue to rise to the top and exploit the ‘have-nots’ as the first world continues to thrive while sucking the life from the third world. And where struggle for survival comes into play, wars for self-preservation will take place. So the question remains, are the effects of our present ‘water crisis’ dooming us to water wars and more innocent deaths? Or could there be a silver lining around this cloud whereby international cooperation can emerge in order for us to move forward with the future? I suppose only time will tell…

Works Cited

All images taken from personal camera between 2008-2010.

Achbar, M., Bozzo, S., & Litvinoff, S. (Producers), & Bozzo, S. (Director). (2008). Blue gold: World water wars. [Video/DVD] USA: Purple Turtle Films.
Bencala, K. R., & Dabelko, G. D. (2008). Water wars: Obscuring opportunities. Journal of International Affairs, 61(2), 21-33.
Cubie, D. (2009). The water wars move east. National Wildlife, 47(6), 16-18.
Gies, E. (2009). Water wars: Is water a human right or a commodity? World Watch, 22(2), 22-27.
Nash, J. M. (2005). Western water wars. Time, 166(10), 56-57.
National Geographic. (2003). Session 1: Earth’s precious water. Retrieved Sept/12, 2011, from
Free Range Studios (Producer). (2010). The story of bottled water. [Video/DVD] USA: Retrieved from database.

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