Friday, March 24, 2006

In abundance, scarcity

My article titled In abundance, scarcity was published on International Policy Network on March 3, 2006.

ONE fifth of Earth's inhabitants lack access to safe drinking water and two fifths lack adequate sewerage.

But it is neither scarcity nor overpopulation that makes this abundant natural resource an increasingly scarce commodity: it is the heavy hand of government.

Even India's north-eastern state of Assam - one of the wettest places on earth - suffers periodic bouts of government-induced water scarcity.

Yet Australia, the driest place on Earth, exports agricultural produce.
People are paying the price for this, and the poorest are paying with their lives.
For the past week, thousands of officials, researchers, businesses and international agencies have been meeting at the fourth World Water Forum in Mexico City.

This year's slogan is "local action for global challenges" and it might contain the beginnings of a push for local initiative to replace government monopoly.

These global jamborees do at least draw attention to the size of the crisis at hand and we hear that water scarcity will cause an increasing number of local conflicts around the world.
But wars aside, dirty water and bad sewerage contribute every day to the diarrhoea and malaria that kill more than three million people, mostly children, each year.

Blaming everything from population growth to commercial interests, those attending frequently exhorted governments to show leadership and galvanise political will to ensure more equitable access to water.

But few noted that government control itself has caused and perpetuated scarcity.
Mexico City faces an enormous water crisis, like many other cities in poor countries.
Their pipes are decrepit and failing, leading to huge losses, both financially and physically.
The systems do not generate enough revenue to cover their costs, so they cannot maintain their infrastructure, let alone invest in wastewater treatment or resource conservation.

At the same time, many cities provide a subsidy to households: most cities in Mexico charge a price which is ten times less than their costs; New Delhi's water is free, when you can get it.
Yet these subsidies do not help the poorest.

They may help wealthy people with swimming pools but the poor are lucky to get one hour of municipal water a week.

Many individuals, entrepreneurs and communities are refusing to wait for government to fulfil its empty promises and fill their empty pipes.

Countless private initiatives in India, Africa, Latin America and Asia are already sustaining local markets and improving access to water for millions of people, including the poorest.
For instance, farmers in Coimbatore district, in the southern Indian province of Tamil Nadu, sell water to the clothing industry in Tirupur.

This town has over 9 000 small textile units and contributes 56 per cent of India's cotton-knitwear exports.

It is no surprise that farmers are happy to sell groundwater to industry: they earn more money by selling water than they earn from producing crops.

But this is a rare instance of poor people owning their own water and being free to use it to their best advantage.

In Delhi's slums, "informal" entrepreneurs have responded to the demand for reliable water, supplying water from a borehole through a small pipe network which connects 50 to 100 dwellings.
The households pay a fee to the supplier, who assures water half an hour at least twice daily.
These informal local water entrepreneurs could easily become the nodes for the city's water authority to distribute water more widely, collect the rates and prevent leakage - around 40% of municipal water in Delhi's gravity-fed system is wasted or lost.

But they are illegal, "informal" and discouraged by government monopolies and the law.
Governments, like any monopoly, have no incentive to preserve, develop or innovate.
People do, given half a chance: that chance means giving them property rights and free markets, causing competition, efficiency and innovation to match local demand.

The end result would be that private entrepreneurs of all sizes and public agencies would compete against each other to provide this most vital of elements - and water scarcity would be no reason for anyone to go thirsty or go to war.

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