Opposing views on Water Deregulation – an international perspective

Those in favour of privatisation tend to see water as an economic proposition and are concerned with the failures in many countries to provide and develop basic services. They look at the economic realities of paying for it and have pragmatic views about how to do this. Governments are concerned with their responsibility to provide a service to the people and they accept that commercial profit may be a part of this. It may also be more efficient and cheaper.

Those who are against privatisation hold the position that water is a basic human right, that should be available to everyone, if necessary at no cost to the consumer. They see it as an issue of human welfare and are concerned with hygiene and preventing disease. They do not believe that privately financed providers will deliver to all segments of the community, but that only a state-controlled or cooperative organisation will do this. Some are aware of the economic issues but others disregard them as irrelevant to the central issue. Many regard full cost recovery as unacceptable, without consideration of the need to fund the service.

These two sets of views are not only different ways of understanding the economics of water but they are also symptomatic of irreconcilably different value systems. While advocates for privatisation are essentially looking for pragmatic solutions to the provision of water, there is often a strong streak of political activism in the arguments against privatisation. The tone of the rhetoric of each party reflects this and the arguments often start with political statements before moving to discussion of the water issues.

Anti-privatisation activists have sometimes employed inaccurate but believable information about the ills of privatisation. One recent study of cancellations in Africa and South America found that although price increases were cited by activists, a survey showed that there was actually no difference in prices between recently privatised companies and state or municipally-owned utilities in the same region which had neither been privatised or for which management concessions had been let out. We are not claiming that prices never go up when operations are privatised but that false information is sometimes used to persuade the public against privatisation.

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