NCPA - National Center for Policy Analysis

WATER FOR SALE

September 13, 2005

More than a billion poor people in the world lack access to safe drinking water. Privatizing water delivery could help these people gain access to potable water, says Reason's Ronald Bailey.

Public water systems in developing countries generally supply politically connected wealthy and middle class people, whereas the poor are not hooked up to municipal water mains. One study of 15 of the poorest countries found that 80 percent of the people were not hooked up to water mains. Consequently, poor people had to purchase water through distributors at a much higher price. According to Bailey:

  • Water obtained by methods other than a water main costs, on average, 12 times more.
  • Residents of Karachi, Pakistan, pay 28 to 83 times more, while in Lima, Peru, they pay 17 times more.
  • Essentially, the rich get cheap tap water while the poor pay the moral equivalent of Perrier prices.

While many privatization schemes are imperfect, Bailey notes that even flawed privatization plans have resulted in positive outcomes:

  • Before privatization in 1989, only 20 percent of urban dwellers in African Guinea had access to safe drinking water; by 2001, 70 percent did.
  • In Cartagena, Columbia, privatization boosted the number of people receiving piped water by 27 percent.
  • In Buenos Aires, 3 million new households were connected to piped water -- 85 percent of which lived in the poor suburbs of the city.

Bailey notes that the price of piped water rose under these policies, but argues that this is not relevant. Since most poor people could not access piped water before, they actually experienced a price drop.

Source: Ronald Bailey, "Water Is a Human Right," Reason.com, August 17, 2005.

 

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