WATER AS A COMMODITY

Investments in Privatized Water Supply Businesses are Among the Most Profitable investments

By Gerhard Klas

[This article published in: Junge Welt, 3/22/2006 is translated from the German on the World Wide Web,  http://www.jungewelt.de/2006/03-22/001.php?print=1.]


Drinking water is becoming scarce. Within 30 years, the available worldwide fresh water supply will be reduced 40 percent. The causes are urbanization, pollution of the environment and the enormous water consumption of industrialized agriculture with its monocultures. 400 of 600 Chinese cities suffer under water problems. In 2003, Spain, Portugal and France had to ration the water supply because of lower rainfall.

GOOD PROFIT CHANCES

Scarce commodities are interesting objects in the world of globalized capitalism promised enormous profits. “Whatever is rare has its price.” Under this motto, the large French bank Societe Generale presented in the middle of March 2006 the new World-Water-Index, in short WOWAX that covers the 20 largest global corporations in the water business. The sales brochure for the WOWAX realistically analyzes the worldwide problems of the water supply and cities without criticizing the profiteers in the private water business. The motto was: we share your stocktaking, not your proposed solution.

Critics want to prevent water from becoming a commodity. For several years, they have urged the UN to recognize water supply as a human right and public asset. Unlike the energy and telecommunications sectors, 90 percent of the water supply is still controlled by public authorities. However the Societe Generale gloats, “Investment need on one side and the strained financial situation of many public budgets on the other suggest an increased market share of private businesses.”

The question whether water is a commodity or part of our common heritage has already been decided in many places. In France, Great Britain, the US and above all in some countries of Africa, Latin America and Asia, the global players in the water business have taken over the supply in the big cities: RWE in Jakarta, Biwater in Dar Es Salaam and Suez-Ondeo in New Delhi. Prices inevitably soar because guaranteeing the water supply is no longer central. The necessary profits for stock corporations must be amassed. The communities often make so-called deficiency guarantees as for example in Jakarta. This mans concretely: If the targeted profit is not reached, the state must be responsible. This will also happen in Berlin governed by the SPD, the Left party and PDS/

RESISTANCE IN SOWETO

The payment discipline of customers is very important. To increase this, more and more so-called prepaid systems will be installed, for example in the Philippines, Namibia, Egypt, Tanzania and China. The system functions like telephoning with a card. When the balance is used up, there is no water any more. The South African economic metropolis Johannesburg and its township Soweto is regarded as the most important pilot project. The public water supply firm Johannesburg Water must cover its costs – in the well-to-do districts with more than 100,000 private swimming pools and also in the townships where unemployment is high and poverty is widespread. Thus South Africa depends on the credits of the World Bank like nearly all countries of the South. The French corporation Suez Ondeo has signed a management contract with Johannesburg Water and supports the firm in enforcing the World Bank guidelines. The Bank recommends the prepaid system to “cover costs and accelerate privatization.” The mourners are the private consumers. According to the data of the unions, water prices rose 400 percent in Soweto.

The rage of the residents of Soweto is directed against the installed meters. Activists of the Soweto Crisis committee regularly lash out, tear out the sturdy meters and reconnect the pipes. Then the water flows again – without the card with the electronic chip.

The first mammoth prepaid water project started in 1992 under Margaret Thatcher in British Birmingham – three years after the privatization of the entire water supply in Great Britain. Within a short time, 2,500 households had no running water anymore. The water suppliers cynically described this as “self-disconnect.” The customers themselves ultimately turned off the water, not the supplier. The sanitation- and hygenic conditions in the affected households were dramatic. Nothing functioned any more: no toilet flushing, no faucets, no showers and no washing machines. Many residents relieved themselves in pots and dumped the contents out the window. In 1998 the British government finally declared the prepaid water system illegal.