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Home / Kahu

<i>Veronica Strang:</i> Privatisation of assets never cut and dry

By Veronica Strang
NZ Herald·
3 Dec, 2008 03:00 PM5 mins to read

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Opinion

KEY POINTS:

After the recent election, one issue likely to resurface is whether vital resources such as water should be privatised.

The Act Party takes the view that a water sector run on a "fully commercial basis" is the way to go. The National Government has said it will not
privatise anything "yet".

Maori groups have questioned whether the Crown owns New Zealand's fresh water in the first place, suggesting that the acknowledgement of public ownership opens a potential path to a takeover by private (and often international) corporations.

Labour maintains that water belongs "to all New Zealanders" and that its management is the responsibility of their democratically elected representatives.

So there are some critical questions about who owns - or should own - the country's water, and who should be responsible for its management.

With water currently managed by a mix of government-owned corporations, councils, private subcontractors and regulatory bodies, there are some major practical issues on the horizon. Rising demands for domestic water and hydroelectricity have put an increasing strain on fresh-water resources and on the (already inadequate) infrastructure for water treatment and supply.

But because raising water charges appears to be politically suicidal, chronic under-investment has prevented infrastructural improvements.

The use of water for irrigation has doubled every decade since the 1960s, and while the dairy industry - which effectively exports New Zealand's water through food production - is bringing in large profits, it also places considerable pressure on aquatic ecosystems. In analysing climate change, Niwa predicts more frequent droughts.

The global economy, on which we depend, is not only looking alarmingly shaky in the short term, it is also confronting a much longer-term problem: that many countries are reaching the limits of their natural resources, including fresh water.

Under these pressures, the question of "who owns the water" has become a central issue around the world, and there is a growing tendency for debates to escalate into outright conflict. Proposals to allow international corporations to take control of water led to violent resistance in Bolivia and Mexico.

And where governments have bulldozed through plans for privatisation (as in Britain in 1989), there is considerable residual resentment about this loss of public control. Among other things, this has translated into a refusal by domestic water users to conserve water in times of drought.

At the same time, there are many groups, especially within the water industry, who are eager to promote privatisation as a route towards greater economic "efficiency".

Others have criticised this assumption, arguing that private water companies have been allowed to "cherrypick" the profitable (operational) side of water supply, while directing profits towards shareholders and directors, leaving decaying infrastructure as a drain on the public purse, and externalising the environmental costs of their activities.

The debate rages on, often placing "economics" on one side and "ideology" on the other.

An anthropological perspective offers a different view. It suggests that economic activity does not operate in a separate sphere - economic choices are simultaneously social, political and ideological choices.

More often than not, in debates about water privatisation, "economic efficiency" and "market forces" are simply substitute labels for a neo-liberal approach in which water is framed as a commodity; while "ideological" really means ideologies that prioritise social and/or environmental needs and persist in seeing water as a common good.

The comparative nature of anthropology also highlights the fact that there are diverse ideas about what constitutes ownership. Essential resources such as water are often heavily imbued with social and spiritual meanings, and therefore resist being treated like a commodity. Many cultural groups - including Maori - don't think that the ownership of material resources can be separated from social and political life any more than water can be divided from the land.

As the historian Karl Wittfogel pointed out over 50 years ago, the ownership of vital resources such as water is inextricably linked to political power.

This may sound dramatic, but in real terms, whoever owns key resources "owns" the country. Establishing control of fresh-water resources has always been a necessary priority for colonising nations.

And resisting this appropriation has always been integral to indigenous hopes for self-governance. This underlying reality lies at the heart of a long-standing stalemate between Maori assertions that water is a taonga and so potentially subject to Treaty claims, and any government's attempts to introduce policies, such as the Resource Management Act (1991) and the Sustainable Water Programme of Action (2003), that manage water as the property of the Crown.

Opponents of water privatisation argue that it disenfranchises the population as a whole, empowering only the small elites who maintain control of this critical resource.

Implicit in this argument is the notion that privatisation permits elected governments to abdicate some of their most fundamental responsibilities - caring for the population and a shared material environment.

In theory, regulation is meant to counter-balance this shift in control, but, as has been demonstrated in many countries, a privatised and internationalised water industry is very difficult to regulate effectively.

Societies have become less willing to trust their governments as these have centralised and enlarged, becoming seemingly detached.

Neo-liberal discourses in New Zealand have presented private companies as a more competent, less "bureaucratised" alternative. But privatised water doesn't always stay with local companies. In Britain, for example, over 40 per cent of the water sector is now owned by foreign multinationals, and recent events in the world economy suggest that dispensing with regulatory frameworks and "hands on" governance carries some high risks.

When debates about privatisation reach the top of the agenda, New Zealanders may want to consider how much control of essential resources they want to hand over, and to whom.

In the meantime, ideas about ownership will be explored in an international conference, Ownership and Appropriation, to be hosted by the University of Auckland's Department of Anthropology, December 8-12 (details at www.theasa.org/asa08).

* Veronica Strang is professor of anthropology at the University of Auckland.

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