Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
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The world is facing a scarcity of water. Each year about 3.4 million people die due to the scarcity of water! Several million more fall sick due to the poor sanitary conditions of the water supplied. The current situation is proof of the fact that the global water supply is not being managed properly.
Many economists are of the opinion that privatizing water resources would be the solution to this problem. While this may seem outrageous to many, this idea is certainly not new or unheard of.
Many countries in the world like Colombia, Indonesia, and Kenya have seen the privatization of water as being an economic reality.
Also, it isn’t necessarily third world countries that opt for privatization of water. Even developed nations like Britain and Singapore have privatized some of their water resources.
There is a huge debate whether such privatization is worthwhile or not. In this article, we will have a look at the pros and cons of water privatization.
Many economists have been singing praises of water privatization. The benefits most commonly mentioned by them are as follows:
Every instance of privatization has increased the coverage of water supply by an average of 20%. More people get access to water supply once it is given in private hands. This is despite the fact that water costs more when private companies sell it!
On the other hand, private companies are good at building systems that minimize the wastage of water. The argument, therefore, is to put these companies in charge of the water resources and save human lives.
Water privatization has been at the receiving end of some major criticism. Some of the important points that have been raised in these arguments are as follows:
People who need it will pay any price for it. It is therefore very important that regulation of water resources should still stay in the hands of the government. Private ownership and investment along with government regulation have been a beneficial combination in many water privatization experiments.
In Bolivia, the privatization of water resulted in a 45% increase in price. The poor were simply being denied water. These atrocities led them to rally on the streets and ensure that the privatization is repealed. Bolivia was penalized heavily by the World Bank and IMF in retaliation.
The efficiency of services is considered to be a given when talking about the privatization of water. However, that is not the case. A major lead poisoning incident in the waters of Flint, Michigan is evidence that privatization can go horribly wrong too.
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