Blue Gold: The Global Water Crisis and the Commidification of World Water

by Maude Barlow

BLUE GOLD:
THE GLOBAL WATER CRISIS AND THE COMMODIFICATION OF THE WORLD'S WATER SUPPLY

By Maude Barlow

Chair, IFG Committee on the Globalization of Water
National Chair, Council of Canadians

June 1999
A Special Report
Produced and Published by
the International Forum on Globalization (IFG)

"The wars of the next century will be about water."

? The World Bank

REPORT SUMMARY

We'd like to believe there's an infinite supply of fresh water on the planet. But the assumption is tragically false. Available fresh water amounts to less than one half of one percent of all the water on Earth. The rest is sea water, or is frozen in the polar ice. Fresh water is renewable only by rainfall, at the rate of 40-50,000 cubic km per year.

Global consumption of water is doubling every 20 years, more than twice the rate of human population growth. According to the United Nations, more than one billion people on Earth already lack access to fresh drinking water. If current trends persist, by 2025 the demand for fresh water is expected to rise by 56 percent more than is currently available.

As the water crisis intensifies, governments around the world ? under pressure from multinational corporations ? are advocating a radical solution: the commodification and mass transport of water. Proponents of commodification, and subsequent privatization, say that such a system is the only way to distribute water to the world's thirsty. But, in fact, experience shows that selling water on the open market does not address the needs of poor, thirsty people. On the contrary, privatized water is delivered to those who can pay for it, such as wealthy cities and individuals and water intensive industries such as agriculture and high-tech. As one resident of the high desert in New Mexico observed after his community's water was diverted for use by the high-tech industry: "Water flows uphill to money."

The push to commodify water comes at a time when the social, political and economic impacts of water scarcity are rapidly becoming a destabilizing force, with water-related conflicts springing up around the globe. For example, Malaysia, which supplies about half of Singapore's water, threatened to cut off that supply in 1997 after Singapore criticized its government policies. In Africa, relations between Botswana and Namibia have been severely strained by Namibian plans to construct a pipeline to divert water from the shared Okavango River to eastern Namibia. Much has been written about the potential for water wars in the Middle East, where water resources are severely limited. The late King Hussein of Jordan once said the only thing he would go to war with Israel over was water because Israel controls Jordan's water supply.

Meanwhile, the future of one of the earth's most vital resources is being determined by those who profit from its overuse and abuse. At the annual World Economic Development Congress, which follows the annual International Monetary Fund/World Bank meeting, corporations and financial institutions met with government representatives from more than 84 countries to attend panels on such subjects as "Overcoming Obstacles to Water Investment" and "Navigating Transparency and Banking Regulation in Emerging Capital Markets." The agenda was clear: water should be treated like any other tradable good, with its use determined by market principles.

At the same time, governments are signing away their control over domestic water supplies by participating in trade treaties such as the North American Free Trade Agreement (NAFTA) and institutions such as the World Trade Organization (WTO). These agreements effectively give transnational corporations the unprecedented right to the water of signatory countries.

Already, corporations have started to sue governments in order to gain access to domestic water sources. For example, Sun Belt, a California company, is suing the government of Canada under NAFTA because British Columbia (B.C.) banned water exports several years ago. The company claims that B.C.'s law violates several NAFTA-based investor rights and therefore is claiming US$220 million in compensation for lost profits.

With the protection of these international trade agreements, companies are setting their sights on the mass transport of bulk water by diversion and by super tanker. Several companies are developing technology whereby large quantities of fresh water would be loaded into huge sealed bags and towed across the ocean for sale.

The U.S. Global Water Corporation, a Canadian company, is one of those seeking to be a major player in the water trade. It has signed an agreement with Sitka, Alaska, to export 18 billion gallons per year of glacier water to China where it will be bottled in one of that country's "free trade" zones to take advantage of cheap labor. The company brochure entices investors "to harvest the accelerating opportunity...as traditional sources of water around the world become progressively depleted and degraded."

Selling water to the highest bidder will only exacerbate the worst impacts of the world water crisis.

Social Inequity

In India, some households pay a staggering 25 percent of their income on water.

Poor residents of Lima, Peru, pay private vendors as much as $3 for a cubic meter for buckets of often-contaminated water while the more affluent pay 30 cents per cubic meter for treated municipal tap water.

In the maquiladora zones of Mexico, water is so scarce that babies and children drink Coca-Cola and Pepsi instead.

Disease

More than five million people, most of them children, die every year from illnesses caused by drinking poor-quality water.

Food Insecurity

China is facing the likelihood of severe grain shortages because of water depletion and the current shift of limited water resources from agriculture to industry and cities. The resulting demand for grain in China could exceed the world's available exportable supply.

During a drought crisis in northern Mexico in 1995, the government cut water supplies to local farmers while ensuring emergency supplies to the mostly foreign-controlled industries of the region. Environmental Destruction

Around the world, the answer to the increase in water demand has been to build more environmentally destructive dams and divert more rivers. The number of large dams worldwide has climbed from just over 5,000 in 1950 to 38,000 today.

In the U.S., only 2 percent of the country's rivers and wetlands remain free-flowing and undeveloped; as a result, the country has lost more than half of its wetlands.

Eighty percent of China's major rivers are so degraded they no longer support fish.

In the U.S., the epicenter of freshwater diversity in the world, 37 percent of freshwater fish are at risk of extinction, 50 percent of crayfish and 40 percent of amphibians are imperiled, and 67 percent of freshwater mussels are extinct or vulnerable to extinction.

In the Great Lakes system, the Nature Conservancy has identified 100 species and 31 ecological communities at risk A number of key research and environmental organizations such as Worldwatch Institute, World Resources Institute and the United Nations Environment Program have been sounding the alarm for well over a decade: If water usage continues to increase at current rates, the results will be devastating for the earth and its inhabitants. Groups such as the International Rivers Network, Greenpeace, Clean Waters Network, Sierra Club and Friends of the Earth International, along with thousands of community groups around the world, are fighting the construction of new dams, reclaiming damaged rivers and wetlands, confronting industry over contamination of water systems, and protecting whales and other aquatic species from hunting and overfishing. In a number of countries, experts have come up with some exciting and creative solutions to these problems.

This work is crucial, yet such efforts need to be coordinated and understood in the broader context of economic globalization and its role in promoting privatization and commodification.

The Blue Gold report addresses the following issues: Who owns water? Should anyone? Should it be privatized? What rights do transnational corporations have to buy water systems? Should it be traded as a commodity in the open market? What laws do we need to protect water? What is the role of government? How do we share water in water-rich countries with those in water-poor countries? Who is the custodian for nature's lifeblood? How do ordinary citizens become involved in this process?

As Georg Wurmitzer, mayor of the small town of Simitz in the Austrian Alps, states: "It is a sacred duty to help someone who is suffering from thirst. However, it is a sin to transfer water just so that people can flush their toilets and wash their cars in dry areas...It makes no sense and is ecological and economic madness."