World Water Day, some thoughts

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By Jorge David Chapas | March 23, 2015

Milagros Quirino and Fely Griarte live on a poor zone in Manila, in the Philippines. Since the year 2000 they no longer belong to the 1.2 billion people that by that time endured potable and clean water shortage in the world. The last report from the UN tells that there are still 800 million people in that same situation. Why don’t we, in a day like this (March 22), in which we celebrate World Water Day, learn from experiences like the one from the lucky Quirino and Griarte?

In that case, two private companies took the responsibility from the municipal government in the production, sanitation and distribution of water and, by means of the virtuoso and necessary profit incentive, they favored millions of residents. Now they have access to potable water 24/7, and the service is cheaper than it was before; they used to pay 100 pesos per cubic meter, now they pay 15 pesos, 7 of those are invested to keep the service going and its maintenance.

In Guatemala, like the rest of Latin America, Africa and the Middle East, there’s still alive the harmful concept of water’s “public domain”, which operates under the perverse system of “state planning centralization”. These concepts and systems are very harmful, especially to poor people. They are the ones that endure its consequences like the shortage and bad quality of the resource: sickness, child mortality, chronic malnutrition and low agricultural productivity, among others.

I disagree with the irrational ecologists that keep pointing that the causes of water shortage are overpopulation, deforestation, droughts or climate change. Besides they insist that water is a human right. Firstly we must clarify that the shortage is not physical, but economical. The world has abundant water; excluding the water that is frozen, salty or not available due to its constant cycle (gaseous state), you can use 19,000 liters per day, that’s 20 times more than what you consume daily.

Water is a limited economic resource because the quantity of available water as a way to satisfy certain human being purposes (for example, the purpose of satisfying a physiological demand, or the purpose of irrigating agricultural fields, or the purpose of executing industrial processes), is limited. It’s by means of a market process and specifically by means of a price system that the human being rationally chooses what is the most valuable purpose.

Water is not a human right, it’s a service with costs of production, sanitation, distribution and recycling; currently the price you pay is not real, because it does not contemplate adequate production and maintenance costs or distribution costs, for example. Under this premise, food could be considered a human right but we still accept that the supermarkets sell the food to us.

The ideas that rule the world, they say. Therefore, the solution is to shake public opinion. We must insist in these aspects and make clear that the fundamental problem is the centralize planning and the consideration that water is a public domain. Our Constitutions say it is, and that is what we need to change. Just by means of clear property rights, that is, making sure the resource is defined, defensible and transferable, and also by making sure the supplier roll gets back to the hands of the private sector, under a competitive market without privileges, we will get to the real solutions.

If getting water to those 800 million people requires the involvement of the private sector and that people get rich ethically, let it be that way. Then we could really celebrate the World Water Day.

Jorge David Chapas is a Guatemalan entrepreneur, founder and CEO of Rana. Friend of CEES and PERC.