Water privatization benefits the poor

By Alex Singleton | 23 February 2005

If a campaign group argued that the UK's industries and utilities ought to be under state ownership, no one would take them seriously. The empirical evidence of privatization in the UK is that it has been overwhelmingly successful. Telecoms, cars, gas, electricity and water et al have all improved as a result. The only contentious privatization was rail, yet even the Labour government - which originally opposed the privatization - remains committed to the principle of private rail operating companies, and has itself privatized the infrastructure of the London Underground metro system.

With state ownership firmly off the agenda in the UK, activists now try and argue for state ownership in developing countries. They pose as defenders of the poor, but their policies are profoundly anti-poor.

They argue for example that water is a human right, and that therefore the state should own each country's water provision. Yet state ownership of water - which in the UK led to poor purity standards and little investment in infrastructure - is truly pernicious in poor countries. It means that access to piped, running water is often limited to relatively wealthy, politically-important groups, and the price of such water is set below cost, making it financially difficult to expand to a more universal service. From an egalitarian perspective, water privatization should be supported because it provides the incentive to expand and increase access to water, and depoliticizes the allocation of water. Ideological opposition to water privatization is not in the interests of the world's poor.