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NATIONAL CENTER FOR POLICY ANALYSIS
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Water Troubles

Water is a scarce resource. However, unlike most resources it is a necessary component of life. A recent report finds that a worldwide water crisis is brewing.

Global water demand tripled between 1950 and 1990, and is expect to double again by 2025. Fresh water supplies are being tapped out. Many, including the World Bank, argue that water providers should be a public-private partnership, not simply public entities. In developing countries, the World Bank found that:

One third of public water utilities cannot account for 40 percent of their water due to illegal connections or leaks.

Public utilities overstaff, inflate costs, irregularly collect fees from users, and service coverage is not complete.

Those in favor of public-private partnerships argue that only private investment can afford to cover the cost of fixing the water infrastructure. The American Water Works Association estimates that in the United States alone, restoring drinking-water infrastructure will require about $325 billion over the next two decades. Moreover, they also argue that the only way to encourage conservation is to charge for water.

However, the opponents argue that water is more than just a commodity, but a necessity for life. To the opponents, depending on corporations with no public interest to provide a necessity is a risky venture. Additionally, privatization of water has led to severe public disturbances in several places including Bolivia, Peru, India, Poland and South Africa. After years of subsidized water supplies, people are accustomed to getting water for free, researchers say.

Source: Melissa Master, "Just Another Commodity," Across the Board, July/August 2002.

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