Book Review #3: Water for Sale

Water for Sale:  How Business and the Market Can Resolve the World’s Water Crisis (2005)

By Fredrick Segerfeldt

Unlike Hoffmann’s cold analysis of investment opportunities in the water industry in Planet Water, Segerfeldt offers a logical and impassioned argument for developing countries to find a balance between private water management and government regulation.  He argues that the best way to address unequal access to water is to allow more private involvement in the water and sanitation sector because businesses that specialize in water can get water to poor people quickly, efficiently, inexpensively and at a higher quality.  

Segerfeldt believes that the commodification of water will benefit big business as well as the poorest sectors of society.  “[T]he starting point in this discussion are the billion or more [people] who at present have no mains water supply and who pay heavily for their water in both money and time”  (ch. 6, para. 41).  He contests that in developing countries, the most disenfranchised communities are often not connected to water mains and pay much more for water delivered in bottles or tankers then those connected to a tap.  In Haiti, he explains, “people with mains water supply pay $1 per m³, whereas those lacking a main water connection pay $10 for the same amount.  So the poor of Port-au-Prince would benefit from a price rise, even if water were made as much as nine times more expensive” (Ch. 6, para. 27).  Therefore, he suggests, private companies can enter into a system, invest in an expansion of current infrastructure (and consequently raise the price of water), turn a profit and benefit poor populations. 

Segerfeldt recognizes that companies will only be inclined to connect more communities to main water if they can also turn a profit.  Therefore, he suggests that while being allowed to make money from providing water to poor communities companies must be incentivized to reach those communities most in need.  The most effective way of doing this, he argues, is through a voucher program.  In countries where water and sanitation are publicly owned, water is often heavily subsidized.  Therefore, when private companies take over, there can often be a rapid increase in the price of water. Segerfeldt suggests that this be combated by distributing vouchers that entitle a countries poorest people to a certain amount of free water, after which they would pay for water at cost. He argues that this would provide those most in need while also encouraging conservation and producing lower consumption rates.

Regardless of if one agrees with Segerfeldt in principal, he makes a solid case for privatization in the water sector because he argues that a move in this direction will help address the human rights and social justice issues in the global water debate as outlined by the UN’s Millennium Development Goals.  However, what Segerfeldt proposes for developing a balance between government regulation and private involvement depend on a country’s ability to enforce the laws it writes.   Can this occur when this means a country must regulate multinational corporations whose quarterly gross earnings might be hundreds of times greater than the country’s yearly budget?