As you all may have guessed, I am in favor of market pricing of water (after an initial allocation of "human rights water"), and I have voted in favor of market pricing at the Economist's debate on water.
Unfortunately, I am in a minority, since 60 percent of the voters are opposed to market pricing of water. What alternative do they offer? Let's turn to their representative, Vandana Shiva, who says:
Market fundamentalists do not recognise that there are not one, but three economies: nature’s economy, people’s sustenance economy and the market economy. The first two can survive without the third, but market economics are dependent on nature’s ability to provide ecological services and societies support systems—the invisible work of women, of third-world people, the human relationships beyond markets which support markets and market transactions. One could not bring up a child on market principles, just as much as one cannot conserve water resources or share them equitably on the basis of market values set by the greed of water corporations or the willingness to pay of the privileged in society.In fact, Ms. Shiva offers no alternative to markets except for a rejection of markets, corporations, prices and capitalism. Given her position -- and her support among 60 percent of poll voters -- it is no wonder to me that India suffers from massive inefficiency and inequality in water provision. After all, India is famous not just as a democracy, but as a place where mob rule is institutionalized and votes are for sale. Theory has been trumped by reality.
[snip]
Market fundamentalism applied to water will create water monopolies and water famine. It will aggravate water scarcity for fragile ecosystems and vulnerable communities.
Her appointed opponent in the debate, Stephen J. Hoffmann, is just as mystified as I am about Ms. Shiva's "logic", and he tries -- valliantly but perhaps foolishly -- to point out her non-sequiturs. Oh well.
Bottom Line: We will suffer from "supply-demand imbalances" for as long as water prices fail to reflect its scarcity value. Good news for the activists; too bad for the poor.
4 comments:
India's capital Delhi's water woes are described in a recent NYT piece here http://www.nytimes.com/2006/09/29/world/asia/29water.html
with the idea of change in water management mentioned as well as the price of tanked water but no mention of paying for piped water.
Correction, to earlier comment: There is not much mention of the fact that metering and increased investment might require a higher price for the piped water.
I generally agree with your broad formulation that more accurate pricing (with allowances for basics for the poor) will help water supply/consumption issues... but I think that your argument against Vandana Shiva is somewhat questionable. Is Shiva the person who sets water policy for India? Critically associating her with India's national water policy is like criticizing you for the US water policy, no?
@Ashok -- prices CHARGED may rise (in fact will rise), but prices PAID (time, disease) would fall. The poor have an even greater benefit.
@Joe -- I am arguing against Shiva because she echoes the policy of India (e.g., free electricity to farmers, etc.) If she called for market pricing to serve the poor, I would criticize the gov't.
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