Essay on Water Privatization

Water is a common good that should not be privatized; it should be administered properly through long and short-term projects handled by experts and the governments. The role of the private sector in the ownership, management and distribution of water is a highly controversial topic. Mainly due to the fact that other sectors, such as electricity, telecommunications and postal services have been opened in various ways to competition or have been privatized around the world, with highly positive results in terms of quality, productivity and profits. Water is considered different because it is seen as a matter of life or death. Privatization means the replacement of the public monopoly by a private monopoly. If water is a natural monopoly, when privatizing, we would be facing a private monopoly instead of a public one. Water cannot be considered as a commodity, since it is a public good. Water privatization, is not a political issue, it is an ethical issue. If we turn water into a commodity we are taking away a right from someone.

Currently, at least 1.1 billion people (about one sixth of the world's human population) do not have adequate access to clean, potable water, and 2.6 billion people lack adequate sanitation, 2 resulting in almost 250 million people of the cases of disease and between ten and twenty million deaths annually worldwide. Despite the fact that water is a renewable resource that can be managed in a sustainable and equitable manner, the fact is that the world's water supply rapidly decreases due to inappropriate use, pollution and mercantilist privatization strategies.

As we have read, some authors point out that making an adequate privatization of water will help to promote the care and value of water as it deserves, but the quality of the privatization service offered by companies is still questioned. The World Trade Organization, the multilateral bank and the International Financial Institutions, such as the World Bank, the International Monetary Fund and the Inter-American Development Bank, are the fundamental axes that are putting water in the hands of companies.

Naturally, in a sensitive social, environmental and economic aspect, the approaches with which water management is studied range from conceiving it as a human right or a common and, therefore, free right, to understanding it as an exclusive good of an economy of the market and therefore subject to the rules of supply and demand. The world has entered a critical phase of the insufficient availability of water characterized —among other things— by population growth, the abatement of water tables, waste and excess in consumption patterns, the obsolescence of aqueducts for liquid conduction, poor distribution between urban and agricultural uses, as well as the low percentages of treatment, reuse and use of rainwater. Some estimates, estimate that the chronic shortage already affects 80 countries and 40% of the world population, and the demand for water increases to more than 2% per year, which implies that it will double every 21 years. The origins of the problem they can be varied, but the result is the same: the scarcity of a single good inevitably generates tensions, disputes and political conflicts, and, on the economic level, an alignment of the price through a regulated market or along the way of informality.

From an economic point of view, a privatization of inelastic goods or services, such as water or other natural monopolies, tends to reflect prices and tariffs that reflect the real costs of the service, so that the tariff adjustment is as harsh as possible. Users accustomed to not paying for it —or pay small amounts— and then maintain a stable, but realistic trend, and that, in the case of limited resources, induce a change in consumption patterns. Privatization is not an end in itself. In order to produce a sustainable public policy in the long term, it is essential to include changes in other sectors and variables, although these must be gradual and medium and long term. Privatization allowed in Buenos Aires, Argentina; Manila, Philippines and El Alto, Bolivia, more people obtain access to clean and safe water. As the poor are more likely not to receive attention from the public operator, with privatization, they have benefited more and pay lower prices than the black market.

Nearly 90 percent of the world's freshwater reserves remain in public hands, however, privatization is becoming more common as governments in need of resources are increasingly unable to maintain the deteriorating municipal purification systems and water supply, which were often built several decades ago.

In Conclusion, with the privatization of water, an efficiency in the quality, quantity and distribution of water is largely sought, but its greatest disadvantages are the high costs that this includes, mainly affecting the ones that have less, therefore we have to be aware of the actual use that is given to water, especially those who have the great joy that the water reaches their homes, to avoid having to make the government look for alternatives as we said would bring certain advantages but also serious problems to some sectors of society. I am convinced that water must be privatized. Resources are better taken care of by private owners than by politicians and bureaucrats. But if it is not possible, we need a plan that allows the rational use of water for human, agricultural, commercial and industrial consumption and that preserves resources for future generations.


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