Dan Grech's report "Seeking solutions to water woes" cites Janet Larsen of the Earth Policy Institute as saying that water is "moving from what was once considered a social good...provided for everyone to a good that is sold at increasingly higher prices," and Grech notes that "In many poor countries, public water systems are under funded and polluted" and that "...bottled water sales are growing fastest in the developing world," which bothers Benoit Mailloux with the International Secretariat for Water, a Montreal based non-profit. Mailloux complains, "Bottled water is all controlled by big conglomerates. And their main goal for existence is not taking care of water for the poor, it's making money, period." Grech concludes, "Mailloux says water shouldn't be something you pay for, it should be a basic human right like air."
Water shortages stem from the refusal to treat water as an economic good, subject to the laws of supply and demand. Water is typically vastly underpriced, where it is not given away for free. This ignores the huge costs of collecting, cleaning, storing and distributing it, to say nothing of treating waste-water and sewage. It also leads to overuse of water for the wrong things.
Governments in the developing world spend a fortune on urban water utilities to provide water at rates well below the cost of provision, but the main benefits flow to the middle and upper classes. However, government control of water often leads to bureaucratic red tape and corruption. Even after all the money spent, the poor rarely have access to sewerage or piped water.
When people pay private firms responsible for water, the firms have the incentive to provide the water, to improve bill collecting, to reduce leakage and to upgrade infrastructure. Carefully targeted means-tested subsidies that cover part of the cost for the poorest citizens could help the poor by making them paying customers that the firms will also serve.
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