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The water market is an oligopoly

The water market is an oligopoly

By Libio Pérez

The privatization of water is paid for by consumers, who are fortunate to have the water resource at their fingertips. A "water warrior" speaks.


The figures it delivers are scary. About 1,500 million inhabitants of the planet do not have access to healthy water; In the last three decades, some 50 thousand lakes and rivers have disappeared in the world; many of these channels reach the sea dry as a result of the forestry industry. In the United States alone, each person living in a large city uses about 800 liters of water a day; although in cities like Los Angeles (California) the average rises, because the almost 500 thousand private pools that exist in the city have to be fed.

Riccardo Petrella is an Italian economist who in 1998 wrote "The Water Manifesto" and gave enough ammunition to create a planetary current in defense of this resource, at the same time that he became a key figure in the alterworld movement.

This world current of defense of water resources brought him this week to Chile, where he was hosted by the Bishop of Aysén, Luis Infanti. The bishop, Patrella emphasizes, is the only prelate of the Catholic Church in the world who has written a "Pastoral Letter on Water", where he raises fierce opposition to the construction of dams in his region.

In Santiago, in addition to meeting with government authorities - such as MOP Minister Sergio Bitar, coordinator of the “Mesa del Agua” - he had an appointment with former President Ricardo Lagos, in his capacity as special envoy of the UN for the Climate change. This last meeting, for this promoter of critical thinking, was very important. His battle in the coming months is that at the December Summit in Copenhagen for Climate Change, the debate on how to make "blue gold" be recognized "as a universal right" and leave the category of tradable merchandise enters the agenda. . And it shoots more figures: 2,400 million people live without health services; 3,000 million without a wastewater treatment system. Result: 30,000 people die every day due to diseases caused by the lack of healthy water. Energy is important to produce, but without water there is no life, he repeats.


"It is necessary to fight to achieve that peace and democracy are decisively imposed in the future of societies, to avoid that the 21st century ends up becoming the century of the water war," he warns.

And he adds: Control over the use of the planet's water resources by the “water lords” (Suez and its subsidiaries in the world and Chile, Thames Water, RWE, Vivendi, Bechtel, Nestlé, Coca-Cola, Danone , etc.) is making great strides around the world thanks to the privatization and commodification of water.

-Water has been privatized in many parts of the world, such as Chile, on the grounds that the public sector does not have the resources to modernize the purification processes, and also due to management issues in the sector, why now the Would the solution be to re-nationalize or nationalize it, in cases where ownership passed to transnationals?

-The argument of the limitation of financial resources is at the base of privatization, it is said that the State does not have the money to do it and that it cannot raise taxes either. They say that only private capital can make the big investments, to guarantee distribution, to build the channels, and so on. But it is a false argument, because in the end it is the consumer who pays and finances the investments. It is the consumer who sees how their bills go up every month. The State transfers its responsibility to private parties and exempts itself from its responsibility to citizens. The private companies not only recover their investment, they also make a profit. The privatization of water only has arguments that are against the citizens.

-How has the global economic crisis affected the resource?

-The financial and economic crisis has impacted through an amplification and reinforcement of the process of commodification of water. Therefore it has produced a further privatization of water resources. Now the argument is that the State is allocating resources to reactivate the economy and therefore does not have resources to manage water. The resources now - say the governments - are destined to give liquidity to the banks, so that there is credit, because without credit there is no economic activity. They add that there is no possibility of raising taxes, as this slows growth. They also argue that they should speed up the allocation of resources that reach companies with the capacity to make investments and produce profits, because those profits help pay debts. This frees the market's ability to make new investments; that is the capitalist logic in this stage of crisis. As it is necessary to renew the aqueducts -which in many countries are very old- again they repeat that only the private ones have the resources to invest. That is why there is a new wave of water privatization and its commodification.

-Is it a logic that has no way out?

-What happens is that if water is considered a commodity, privatization is favored; and if the water is privatized it becomes part of a business. But there is another impact of the current crisis, it also amplifies the idea of ​​national water security. For this reason, the design implies the desalination of seawater, the construction of a new generation of dams and the recycling of used water. Some have positive results.

-Do you support seawater desalination projects?

- I do not like the ideas of a new generation of dams and neither of the desalination. If they were small dams for consumption, and that preserve rivers, it would not be bad; But dams, as in Chile, are intended to power large mining projects, destroy rivers and produce high pollution. In the case of desalination, it is similar, the plants are equivalent in size to the installation of an oil refinery, with a great environmental impact, not to mention that it requires to be fed with large volumes of fuels. Because the costs of desalination in the high seas are even higher, therefore they must necessarily be done on the coast, with all the environmental consequences that this implies.

-Is the use of solar energy to produce desalinated water not viable?

-The technology to do it efficiently requires improvements that may take, according to the technicians, between 10 and 20 years, but the environmental impact that is produced is now, as is the case in Spain, where there are more than a thousand plants. But desalination plants destroy the coasts. Isn't it more efficient to take care of lakes, rivers, to take advantage of rainwater than to pollute it to produce fresh water from the sea? Large companies are already destroying the sources of fresh water on earth, now they want to go by sea. That should not be allowed, because in the end those costs will also be passed on to consumers. The market for water, like that for mining and other resources, is an oligopoly. This economic paradigm must be fought.

Libio Pérez - The Nation - Chile


Video: Introduction to Market Structures - Oligopoly. Economics Revision (July 2021).