Climate change, pollution and a growing population have thrust us firmly into a global water crisis. The United Nations (UN) estimates that five billion people will face water shortages by 2050, and over two thirds of the world will live in water stressed areas by 2030. Many people are already dealing with the consequences: Cape Town, California, Sao Paulo and China have experienced massive droughts in recent years. Moreover, water scarcity has far reaching ripple effects. Recent civil wars in Sudan and Syria were partially caused by drought and the ensuing migration, urban overcrowding and battle over resources. The intensity and number of these water wars will only increase as scarcity worsens.
As always, when the world sees a crisis, the private sector sees dollar signs. Investment banks, corporations and billionaires have moved to exploit earth’s most crucial resource for their own financial gain. We have to push back against this trend; there is no profit in water, only life. Public management of water is by no means perfect, but it remains relatively uncorrupted by greed.
Community water reserves, for instance, have suffered under private control. As water is generally a local resource, corporations are able to purchase de-facto monopolies by offering cash strapped municipalities large up-front sums. Because profit is prioritized over accessibility, privately run water systems increase prices by more than 50 percent on average. Additionally, private ownership raises concerns about accountability. Corporations are beholden to their shareholders, unlike the state, who can be held responsible by their constituency. The main economic argument for privatization hasn’t proven itself either: a wide array of studies show that private ownership is no more efficient than state control. Ethical concerns must also be considered. Should water be a good that people can be priced out of? Should it be sold on the free market, a place which naturally creates inequalities of access?
These issues are exacerbated when corporations get special treatment from the government. Bottled water giant, Nestle pays the state of Michigan just two hundred dollars a year in order to extract public water worth 343 million dollars annually. Nestle’s corrupt contract with the state stands in sharp contrast to nearby Flint, Michigan, a city which hasn’t had clean water for almost five years. Nestle has also pumped millions of gallons of water in California during droughts, sometimes illegally. Other bottled water companies, such as Coca Cola and PepsiCo, have employed similar strategies to collect public water on the cheap.
Likewise, investment banks and billionaires have poured resources into buying water around the world. Goldman Sachs owns Veolia Water, which serves over three million people in Southern England, while Hong Kong billionaire Li Ka-shing owns Northumbrian Water, which serves the northeastern part of the country. George Bush’s family owns three hundred thousand acres of land over Acuifero Guaraní in South America, one of the largest underground reservoirs in the world. Billionaire tycoon T. Boone Pickens owns enough land in the US to pump sixty-five billion gallons of water a year. To these people, the scarcity and inherent necessity of water is what makes it such a smart investment. Goldman Sachs tellingly sees water as “…the petroleum for the next century.”
Credit Suisse, another large investment bank, follow the same logic: “…the supply is finite, but demand is growing by leaps and, unlike oil, there is no alternative.”
This line of thinking is ominous. Water isn’t just another resource to be bought and sold on the free market. It’s an essential ingredient to life, and should be treated as a human right. The private sector does have a role to play in this crisis, as innovators of new, sustainable water technology. However, they cannot be allowed to own water itself. Greed and profit dictate they will control (and have controlled) water like any other resource, manipulating prices and bleeding our reservoirs dry. Letting water rights slip into the grubby hands of capitalism should unnerve us. After all, as Credit Suisse so astutely noted, there is no alternative to water; when it runs out, we die. The fact that banks, billionaires and corporate investors view this global humanitarian crisis as an opportunity is predictable, but nonetheless deeply troubling.
Harry Zehner is a staff columnist for The Daily Campus. He can be reached via email at email@example.com.