Econ-Utopia: Particpatory, Community-Managed Water Systems

Particpatory, Community-Managed Water Systems
By Amit Basole, CPE Staff Economist

The Devil and the Deep-Blue Sea

“After the Water War...What?" This piece of graffiti from Cochabamba, Bolivia, the scene of a famous struggle against water privatization, poses the question that many ongoing struggles for water will ask themselves in the years to come. On the one hand, many communities, all over the world, are fighting desperately against privatization of water services and resources; privatization that has put this already scarce and very vital resource even more out of their reach. On the other hand, there are also many instances of failure on the part of state, local or municipal governments in many countries to provide cheap and clean water, in particular to the marginalized or poorer sections of society. Even though the municipal utilities are publicly-owned in theory, often the non-participatory and non-transparent nature of their functioning defeats their purpose. In fact, it is by pointing to such public-sector failures, that the World Bank first pushed for privatization. It has also been argued that corruption and powerful interest groups can ensure that the water subsidies are wasted where they are not needed. However, the Bank's argument that privatization would remove public-sector inefficiencies has also been shown to be riddled with problems, as the Bank itself has also acknowledged. Privatization, at least the way it has been implemented thus far, has proved largely incapable of delivering water where it is truly scarce. Further, excessive ground-water usage by bottled-water companies has resulted in artificial drought-like conditions and ecological degradation. No wonder then that over 80% of the populations in the US and the EU are still served by public operators. The bitter medicine of privatization, it seems, is meant only for "developing" countries.

What alternatives exist to failing state-run bureaucracies and large multinationals? Here we take a look at some successful experiments in community-based, participatory management of water services occurring more or less in the framework of existing municipal or local self-governments.

Public water in Bolivia and Brazil

Port Alegre in Brazil has the highest human development index of any state capital, and is considered to have the highest quality of life. It has also run a successful public water and sanitation utility throughout Brazil's macroeconomic turmoil of the 1980s and 1990s, which saw soaring inflation and currency fluctuations. Porto Alegre's water utility company, the DMAE, is financially and administratively independent of city hall. It follows a participatory budget cycle wherein every consumer can voice an opinion on next year's spending. Further, DMAE's water tariff structure is based on cross-subsidies. This means that people who use water only for basic needs (consuming up to 20 cubic meters per month) are strongly subsidized by those who use between 20 and 1000 cubic meters per month. Beyond this, tariffs become very expensive and large consumers like industries pay much larger amounts. In addition to implementing participatory water management, DMAE has also been at the forefront of the struggle against water privatization in Brazil, successfully resisting pressure from the Inter-American Development Bank (IDB) to privatize, while still retaining its loans.

Similarly, the city of Santa Cruz de la Sierra in Bolivia has had a cooperative for drinking water and sanitation services since 1979. Everyone with a water connection is a member of the co-op and has voting rights. Since its goal is the well-being of its members and not profit, the co-op has a socially conscious tariff structure with different prices for home consumption and commercial or industrial use. Tariffs are also "progressive" such that those who consume more pay more per cubic meter than those who consume less. This Bolivian co-op has achieved 96% access to drinking water in its area, in stark contrast to the "achievements" of Bechtel Corporation in Cochabamba where Bolivians earning $100 a month were asked to pay $30 a month for water.

People's initiative in water management: Kerala, India

Piped water is provided by the state of Kerala, India to over 60% of the population, but coverage is uneven and in the early 1990s the village of Olavanna saw drinking water shortages for almost 70% of its households. Although many elections were fought on the issue of drinking water, no effective solutions were found. However, Kerala is known for its participatory local government system (panchayats) and finally, responding to popular pressure, the Kerala state government implemented a People's Plan Campaign which involved the devolution of 35-40% of state funding to the local governments. Under this scheme, each water-provisioning project is under the supervision of a beneficiary committee drawn from the people of the village. This committee even repairs and maintains the delivery systems and has so far not needed any technical or expert help for its work. Of the 60 new drinking water schemes in Olavanna, 26 are entirely people's initiatives. Management costs in Olavanna have proved to be far less than state-run mega projects. People taking ownership of the projects has led to a greater willingness to monitor and maintain the systems. The resulting empowerment has also made the people better equipped to fight private water exploiters. The Olavanna example has also been used by Left parties in India to show that people’s initiatives can work, to the extent that even World Bank projects have been modeled along similar lines.

Challenges to participatory, community-managed water

Despite an increasing number of such examples, formidable challenges remain in the battle for community-managed, public water. Fighting the persistent threat of large, private corporations is one of these challenges. Co-option of successful models by international funding agencies such as the World Bank, which tend to take control and initiative away from those affected, is another. Even where states are not under pressure to withdraw from the provisioning of social services, state bureaucracies can themselves be suspicious of peoples' initiatives and be reluctant to devolve funds to local governments. Nevertheless many such experiments are going on. As more and more people-centered and participatory water management projects deliver cheap, clean water where other models have failed, their presence can be used as ammunition for further struggles.

Sources and resources:

• Reclaiming Public Water: Achievements, struggles and visions from around the world, Corporate Europe Observatory, January 2005. Full-text available online at http://www.tni.org/books/publicwater.htm.

Bolivia's War over Water, The Democracy Center, http://www.democracyctr.org/waterwar/#11

© 2006 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author's opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.