Water for People, Water for Life, For the Right Price by Hani Mumtazah

     Jakarta, February 7, 2003 (Islam Online) -  Mrs. Lan Tang Hok, 43, can start saving money to buy more food for her seven children since piped water from the Phnom Penh Water Supply Authority (PWSA) has reached her home.

      Lan Tang Hok, who lives in the Pra You Vong slum area in Phnom Penh, Cambodia, used to pay 1,000 riels a day for water she bought from private water vendors. Nowadays, she spends only about 5,000 riels per month for the water supplied by the PWSA, since the water authority has expanded its services to her poor neighborhood.

      This means that she can start saving about 25,000 riels per month, quite a lot for her family, because her husband, a taxi driver, earns only a meager 5,000 riels -- less than US$ 2 -- a day. (US$ 1 = about 3,800 riels).

The Poor Get Poorer

The Cambodian housewife is one of a very few lucky poor people who can enjoy water services from the PWSA, which is much cheaper than water sold by vendors. In many developing countries, the poor have to pay vendors more for water, often ten times as much as the rich. This is because the poor are often forgotten and are given the least priority in terms of access to piped water services. The rich in contrast receive the privileges of almost all government-run services, such as electricity and piped water.

Meanwhile, the very poor, who cannot afford clean water at all, often die prematurely due to the unsafe water they consume. Waterborne diseases cause more than a billion episodes of illness a year, with more than 3 million deaths annually from water-related diseases -- more than 2 million of them children.

Steve Iddings of the World Health Organization (WHO) told participants of the Workshop for Journalists on Water Policy Issues in East Asia in Phnom Penh last February 16, that more than 2 million people, 90 percent of whom are children, have died of diarrhea from consuming contaminated water.

The poor, especially the children, are most vulnerable to water-related diseases. They spend up to 20 percent of their income just on water, yet it still might not be safe for consumption. It needs behavioral change to ensure that water is safe and clean, he added.

The Importance of Water in Poverty Reduction

Poverty cannot be reduced unless people understand the importance of water in development, according to the World Bank Institute. The Asian Development Bank (ADB) has led a Water and Poverty Initiative Program by promoting a policy of greater access to water in a sustainable way for the poor.

Wouter T. Linklaen Arriens, head water resource specialist of the ADB, who also spoke at the Workshop for Journalists on Water Policy Issues, said that two out of three people in the world will face water shortage by 2025, and 1.1 billion people will lack access to safe water supplies. In Asia alone, 1.3 billion people do not have access to safe drinking water, and more than 40 percent of the urban poor do not have piped water at home.

According to Arriens, the poor depend on or are affected by water resources in four key ways. "As direct inputs into production, such as agriculture, fishing and small-scale manufacturing; and for health, welfare and food security. The poor are also the most vulnerable to water-related hazards, such as extreme floods, droughts, major storms, landslides and pollution.

Many developing countries have developed their national poverty reduction strategies, but unfortunately they do not include water at all in the programs. It is a weakness of water people that they talk only to fellow water people. Water issues are dealt with in a fragmented approach and there is a lack of coordination because each agency has handled its projects in isolation, said Arriens.

The ADB has identified six key result areas for action to improve water security for the poor -- among them strengthening water governance through better water policies, increasing the poor's access to water services such as drinking water supply, and increasing investments in water-using sectors that generate income for poor communities.

But the potential of water investments as a tool for reducing poverty and building sustainable livelihoods has not been fully realized by many people, said ADB President Tadao Chino when opening the "Water and Poverty" session at the Third World Water Forum in Kyoto.

A success story on the link between poverty and water supply was told in the session by Shakeel Khan from the Punjab Rural Water Supply Project. He said that since the clean water supply reached villages in Punjab Province, Pakistan, the number of student enrollment to schools has increased by 70 to 90 percent, the number of death mortality of children due to diarrhea has dropped by 90 percent and the income of households has increased by around 25 percent.

According to the Water Poverty Index (WPI), the worst 10 water-poor nations in the world are Haiti, Niger, Ethiopia, Eritrea, Malawi, Djibouti, Chad, Benin, Rwanda and Burundi. The top 10 water-rich nations in the world are Finland, Canada, Iceland, Norway, Guayana, Suriname, Austria, Ireland, Sweden and Switzerland

Water as an Economic Good

In the past, water used to be treated as a social good to the extent that most people took it for granted when using it without considering either its conservation or its economic value. However those happy

days are gone, although under the international human rights law, water is implicitly and explicitly protected as a human right.

Water has become important for capital because water is increasingly characterized by a crisis of scarcity, which is the basis of modern capitalism, Richardo Petrella, a professor at the Catholic University of Louvain in France, said as quoted by the International Consortium of Investigative Journalists (ICIJ).

The argument that water should be treated purely as an economic good originated in the Dublin Conference, Ireland, 1992. Since then, water has been increasingly managed as an economic, rather than a social good, according to Mahmoud Abu-Zeid, Chairman of the World Water Council (WWC), when speaking at the Third World Water Forum in Japan, March 2003.

During the past century, as the world’s population tripled, the aggregate use of water has increased six-fold. By the year 2025, 48 countries are expected to face water shortages, affecting more than 2.8 billion people, while the demand for water will exceed supply by 56 percent.

Water is currently a socially vital economic good that is more important than oil or gold. If the wars of the 20th century were fought over oil, the wars of the next century will be fought over water, said Ismail Serageldin of the World Bank in 1995, referring to the global water scarcity.

The United Nations Millennium Declaration has set water targets of reducing by one-half the proportion of people without sustainable access to adequate quantities of affordable and safe water by the year 2015, and providing water, sanitation and hygiene for all by 2025.

However, extension of water services, including for irrigation and dams, needs huge investments, which many governments in the Asian region do not have. To meet the needs just for drinking water and sanitation, the investment required is estimated to be close to US$ 23 billion a year.

The ADB has provided US$ 17 billion in loan, or about 20 percent of its total loans, for water investment. The biggest shares of the loan go to Indonesia, China and India. The World Bank has outstanding commitments of about $17 billion in water projects, or about 16 percent of all World Bank lending.

Considering the large cost and management skills required in
water projects, the two funding companies encourage partnerships on water, involving governments, private corporations and NGOs. The participation of the private sector is necessary, but it needs strong regulations for public protection because water is a sensitive issue, Arriens stated.

He explained that the ADB promotes participation of the private sector, but not the privatization of water. The government must retain the rights to water and consider the people's paying capacity. Water cannot be privatized. Privatization of water is a wrong concept, he stressed. However, although the two funding agencies called it “the participation of the private sector,” some NGOs consider it privatization of the water supply.

The World Bank and ADB, two funding agencies that provide loans to many developing countries in terms of water project investments, promote cost recovery, which includes appropriate pricing, to ensure loan repayment and water conservation.

Pricing policy is often the key, but at the same time it is a dilemma. Set the price too high, and the poor will ignore the improvement and resort to the methods of sanitation and water collection that they have always used. Set the price too low and maintenance and expansion will not be possible, so that the poor are not adequately served and only the better-off benefit from lower prices, warned WASH.

For the purpose of environmental conservation, the people will be more aware of the value of water if they are asked to pay, prompting them to conserve water and use it economically. If the price of water is lower than the cost of providing those services, consumers will not be aware of the value of water, resulting in wastage and water misuse.

In Indonesia, 10 per cent of ADB's 55 active projects are in the water sector. The Indonesian government also requested the World Bank to finance the water utilities rescue programme in 1998. The participation of private sectors started in 1998 when Thames Water and Suez joined in.

ICIJ, a project of the Center for Public Integrity, in its investigative report called The Water Barons, showed that the world's three largest water companies: France's Suez, Vivendi Environment and British-based Thames Water owned by Germany's RWE AG, have since 1990 expanded into every region of the world. Three other companies, Saur of France, United Utilities of England and Bechtel of the United States, have also successfully secured major international drinking water contracts.

"The water companies are chasing a business with a potential annual revenue estimated at anywhere from $400 billion to $3 trillion," according to the ICIJ report. According to the World Water Council (WWC), the world needs to raise annual spending on water and sanitation from $80 billion to $180 billion if it is to supply everyone with basic services by 2025.

Delegates at the Third World Water Forum in Kyoto debated whether there was a place for profit making in water development and management. Some groups believe that governments should provide water for all with no charge, while others say that the private sector can be an important partner. Some speakers in Kyoto emphasized that water is everybody’s business and therefore all people should care, but no one openly declared during the discussions that it is a real business opportunity too.

Sources:

§                  Asian Development Bank, 2003 - Water and Poverty: Fighting Poverty through Water Management.

§                  The Third World Water Forum, Kyoto, March 2003

§                  John Soussan and Wouter Lincklaen Arriens, ADB, 2003 - Poverty and Water Security

§                  Journalism Workshop on Water, Cambodia, February 2003

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Ms. Hani Mumtazah is an environmental journalist based in Jakarta, Indonesia. She graduated from a three-year English language non-decree program at the University of Indonesia, Jakarta. She attended the Non-Aligned News Agencies Journalism Course in New Delhi, India, in 1987. Comments and suggestions may be forwarded to her by contacting the editor at: ScienceTech@islam-online.net  

02/07/2003