Debating the Water War Thesis
Confrontation between the enviromental scarcity and liberal capitalist approach
In the 1980s, Buthros Buthros Gali, the former Secretary-General of the United Nations asserted in a public declaration that « water would be a source of international conflicts ». At the same period, a World Bank top official, Ismail Serageldin, declared in 1995 that if conflicts in the 20th century were related to oil, they would probably be water-related in the 21st. These statements go along with the theories of the ‘water war’ school. This school stressed that competition over natural assets will increase because of the population growth and economic development. For Arthur Westing, « human history is an account of resource wars », including the water one, while Homer-Dixon underlines the causal relation between environmental scarcity and domestic or international conflicts. Giving an economic value to the water resource can solve water scarcity and ease tensions in the most conflictual basin. If the water becomes a market good, the resource will follow the rationality of the market, allocation of water will not rely on values or political decisions but rather on individual interests, leading to the benefits of the community according to Adam Smith’s theory. Two concepts have been outlined by the author enlightening how the privatization of water can reduce demand-induced scarcity.
First, the theory of virtual water conceptualized by Tony Allan. Water is not a specific resource that can be traded, shipped, stored like coffee, gold, or oil and transport or storage are likely to affect the quantity and quality of water. Thus, the virtual water transfer does not consist of a physical import of the resource but rather as the virtual import of water through food or goods. For instance, 1000 liters of water are needed to produce 1kg of bread. For the virtual water theory, a country will save this amount of its own freshwater by importing the bread rather than producing it. Another option for a country with scarce water resources is to buy food at advantageous prices if water development is too costly. The main idea behind this process is to adopt an efficient and sustainable use of the resource through economic rationality, irrespective of national boundaries. Indeed, it is technically easier to import water in the form of goods or food than it is to freight and trade water directly. De facto, applying this concept will automatically ease tensions in the international basins where water is scarce. Egypt for instance is already importing about 15 billion cubic meters of food in the form of virtual water. This represents 21% of the country’s available water. Supply-induced projects would hardly be able to provide 15 BCM of additional water to Egypt and above all, the other riparian countries would have opposed firmly the Egyptian attempt to increase its already high share of the Nile waters. This « hidden » source of water is a factor of peace in domestic and international tensions. It was facilitated by the fact that the global trade in food products has been increasingly accessible even to poor economies for the past 50 years. During the Cold War, food that could not be purchased were often provided in the form of grants by the United States or the Soviet Union. Then, the harsh competition brought down the international price of grain. During the 1980s a ton of cereal was sold 100$ despite costing around 200$ to be produced. The gap in the cost of virtual water was funded by European and US taxpayers, in the form of agricultural subsidies the different governments paid to their farmers. Those cheap prices have mainly benefited the Middle East and North Africa countries. With respectively 180 and 500 cubic meters per capita in Israel and Egypt, both countries are far from the 1000 cubic meters per capita requires for a self-sufficient agricultural production. Egypt is importing 50% of its food. With globalized and liberalized international markets the idea of food security gained through self-sufficiency seems old-fashioned when confronted with the theory of comparative advantage. This vision highlights that water is not a common resource without value, it is an economic good, with little price elasticity for sure, but an economic good with a price. Water is equal to money. Once this rationale is accepted, a country can seek its lacking water resources on the international globalized market under the form of virtual water. This will reduce the domestic consumption of its own water resource.
Pricing the water will also increase the available water by reducing the waste by households, farmers or industries. As a common good, water is undermined by overconsumption, unoptimized management, and uncontrolled waste. Water should be more considered as a finite resource rather than a renewable one. Less than 1 percent of the world’s water is readily available for human use. It means that it should be considered as a private good, the price preventing the resource to be affected by free riders, and non-monitored uses. However, there are some clear limits to considering water as a merchant good obeying the law of supply and demand. The first issue is directly linked with the concept of virtual water. As said above, resorting to virtual water for grain and food has been advantageous thanks to the subsidization of European farmers. But the question is: will this continue? In 1995, on the world grain market, wheat prices reached 250$ per ton and 270$ in 2001. The result is the high volatility of the prices which threatens the long-term state planning and food security. If the price of imported food can double in one year, countries will be less inclined to resort to the concept of virtual water and may refocus their economy to be self-sufficient. Importing virtual water will be reserved for major exporters like Saudi Arabia benefiting from important oil incomes. This reality will be accentuated by the global trend to erase tariff barriers. The will of the World Trade Organization to eliminate those subsidies could lead to a 12% rise in world agriculture prices. Immediate consequences would be a relocation of agriculture in many countries and an unseen pressure on the water resource. Adding to existing tensions, this situation could lead to water conflicts or water wars. The second limit, economic rationality does not mean a social benefit for the common interest. Several experiences have shown that shifting the water resource from common good to a private good by transforming water into a mere merchandise affects the environment and the population. Privatization and liberalization of the resource will generate an increase in the price and create more structural scarcity, people won’t be able to afford water anymore leading to a domestic water crisis.
These limits of the liberal vision are considered by other scholars as a source of a water war. Vandana Shiva developed the concept of water terrorism focusing on the relation between neo-liberal policies, water scarcity, and water wars. Water terrorism is described as “the destruction of water resources, forest catchment and aquifers and its consequences on the environment and communities”. The water terrorist “denies poor access to water by privatizing water distribution, polluting wells and rivers and affecting the health of the citizens.” Thus, water war is more an issue of capitalist policies rather than a malthusian concept. The free trade rules implemented since the 80’ by western institutions such as the World Trade Organization (dubbed the World Terrorist Organization by environmental activists), the World Bank, and the International Monetary Fund are at the roots of the ecological crisis. The market promotes overexploitation of resources through the necessity of productivity leading to excessive water use and disruption of the water cycle. As result, water is getting scarcer which threatens the livelihood of communities. Women of the third world are traveling long distances to get water, farmers are exposed to starvation and children suffer from dehydration and malnutrition. These commercial causes are considered terrorist acts and the source of future wars. Throughout history, water has been the subject of conflicts when communities were excluded from the decisions. In 1999 in Bolivia, the World Bank preconized the privatization of Cochabamba’s municipal water supply company. The price reached 20$ per month in a city where the minimum wage is less than 100$. The citizens gathered in an organization to protest against this situation and were soon joined by millions of Bolivians. A general strike started, calling for the protection of universal water rights and water democracy. After several months of contestation, the state violently reacted killing and arresting people, but the protestors finally succeed to overthrow the company. A democratic institution was established to manage the water and an attempt of water democracy was implemented. Cochabamba’s story embodies two opposite solutions when it comes to water management: privatization or public management. Bolivia’s situation is less the symbol of capitalism’s failure to reduce water scarcity and inequalities than the role it plays in the emergence of the water war.
Understanding that principle, Vandana Shiva raised the concept of Water Democracy. This concept emphasizes the right of people to determine how natural resources are owned and utilized, how the food is produced and distributed, and how the environment should be protected. It is a system against privatization that promotes decentralized management and democratic ownership of water resource by the communities. Because water is common it should not be privatized or sold as a commodity but shared through sustainable utilization. If these principles are not respected water wars are likely to appear and intensify. Indeed, the risk is to increase discrepancies between those who have access to water and those who don’t and widen inequalities induced by the climate crisis. Israel apartheid highlight this situation. Palestinians have no right to their water; they face water scarcity when Israeli citizens are freely using a resource that originates 25 to 40% from the West Bank. This unequal share of the resource, which might be called water terrorism, has a strong relationship with the uprising “Intifada” that emerged in 2004. Privatization is an obligation for countries who want to benefit from the World Bank or IMF funds. The liberal Doxa argues that privatization of the water sector is an opportunity to create more efficiency and increase access to clean water, but in fact, the objective is to generate profits. The World Bank estimates the benefits of the water market to 1$ trillion, so water is an opportunity for multinational companies. In fact, in most cases, the liberal system has failed to keep its promises by raising more problems than before. In Johannesburg, after the water supply came into the hands of the French company Suez, the water became unsanitary, diseases arose, and some neighborhoods were disconnected from the network.
Since the 1980s liberalism has been considered as the new remedy to economic crisis. Based on the principles of free market and the law of supply and demand, the behavior of economic agents will be guided by rationality in order to fulfill their objectives. According to Adam Smith’s theory, this individualism and self-interest is source of a global market efficiency. In the meantime, the environmental issues increased by climate change reached the international political agenda and water quickly became an important challenge both geopolitically and economically. Officials and researchers started to express their concern over water wars induced by an increasing demand of a scarce and finite resource. Thus, the market economy has been designated as the perfect mechanism to bring solutions over water scarcity challenges. Give a price to the water and the market will fulfill his job bringing efficient use of the resource through economic rationality. But theory and practice are two different things. And Vandana Shiva’s article shows that in some cases privatization and liberalism can harm more than benefit to the people and thus be a source of water related conflicts.
Virtual water theory may be the perfect solution on the paper. Taking into account water used in goods production can help a country with scarce water resource and ease tensions within an international watercourse. But following neomalthusian logic, population growth will increase pressure on water resource and the virtual price of water will rise. Considering the economic rational choice, if the cost is too expensive, countries will start to use their own water resources again. So, how to find an alternative to this dilemma ? The answer may be found in the technological research. Indeed, if sea water desalination or used water recycling are developed billions of cubic meters could be added to existing freshwater resources. According to us, water democracy is not only the solution but the essential framework in which such progress can be implemented without creating internal conflicts.
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