Introduction reforming governments via marketization and commercialisation and

                       Introduction   For some academic’s neoliberalism
is the idea that promotes privatisation while prescribing reforms and process such
as deregulation, regulation and marketization which decreases government
participation and increases the role of private sectors and communities in the
process. Privatisation started in the 1990 in the global south and these global
reforms were spread to the global south via international financial
institutions such as the world bank by reforming institutions. Secondly by
reforming governments via marketization and commercialisation and using new
actors such as the NGO’s.  Equity is a big problem in privatisation as it
is said that you manage the resources effectively, that will be enough to
tackle the problem but that does not seem to be the case from the literature Another case study   Need to provide water to informal
settlements via water kiosks. Implemented by water aid- water utility were
about to shut down the kiosk as they weren’t getting enough paymentsso wanted
to disconnect all ther users – water aid established a system of and assistance
= empowerment of local people as they get to participate in service delivery,
making jobs in the community. The NGO participates as a donor capacity
developer  In Lilongwe some members benefitted
more than others such as chiefs and religious leaders  Case study 1: In the Philippines water was only available
for a few hours a day and the pressure was not enough to take it up to the
second floor in the 1990’s. At that time, the service coverage was only 67%, and
15% of the water was lost due to the poor infrastructure. It was suggested that
that the government was very insufficient and that the private sector can do a
better job. The literature shows that privatisation is always introduced after
a crisis. In Philippines, there was a power crisis which was followed by a
water crisis making the perfect conditions for privatisation to occur. The build-operate-transfer
law came into effect in the 1990’s to allow the privatisation of water in the Philippines.

The water has now been privatised for the last 20 years in Manila Philippines. It
has been able to provide affordable water for the last 20 years. When water in
Manila was originally privatised, they split the city into east and west side. The
coverage of the east side increased by 94% in less than a decade. Another reason for east sides success was the grassroots, community
based schemes which offered large subsides to low income residents who were
then responsible for their own infrastructure and management (Inocencio and David, 2001). Whereas
the Mayniland company on the west side were penalising people who were stealing
water, often the poor who could not afford to pay for the water. The East side
worked but the west side failed in the first part. The west side also failed due
to the bad governance as it was controlled by a foreign French company but left
after the financial crisis in 1997 whereas manila water stayed so it’s
suggested that when the privatised sector is run by local companies with a long-term
plan it will work. In the case of Manila who were a 200-year-old business in the
Philippines with an excellent reputation in the property business, they had a
financing model and used local currency so when the 1997 crisis hit the French company
were having to pay double their foreign borrowing.  West side company Mayniland also changed 3 ceo’s
in a quick succession whereas manila has the same ceo for 20 years. Manila were
also offering the lowest priced service in the world and they gradually increased
the price over many years rather than having a big hike like the French owned
company. The Manila success has to be attributed to reducing non-revenue water
from 63% to 11% which saved them a lot of money. They also replaced all the
leaking pipes and the net effect of all of these changes was an affordable
water service after 20 years. This neoliberal reform of privatisation has had
many positives such as improving business opportunities for low income households
as the local fishing industry is increasing as people are spending less time
and money for their water and using that money instead to purchase higher
quantities of nutritious food like fish. The water quality before 1996 was not
up safe standardns but after the privatisation the quality of the water
increased. The way is run rather than who is running it.   from
greater NRW or water loss due to (1) much older water-main and pipe connections
and, thus, greater extent of leakage due to wear-and-tear, and (2) greater
extent of water theft, illegal connections and free public water outlets due to
heavy concentrations of squatter communities                      Case study Cochabamba is the third largest
city in Bolivia in 1999 they privatised their water supply. Before privatisation
the government only covered 57% of the population and had 50% losses through unaccounted
for water which mostly came from leakages. There were also problems with water
pressure, rationing and water availability. Large amount of people depended on
private wells and private vendors. In 2 months after the water was privatised
the price increased by 35% even though the water quality had not imporved. This
led to a huge conflict in the area which first included a roadblock, strikes and
the shutdown of the city. This led to police brutality which injured a lot of
the people. Their were many riots in Cochabamba which lead to many deaths and
injuries. It was regarded as the battle between indigenous peasans and private
corporations. The private company was given the right to provide all water
services within Cochabamba which gave the water company rights to the storage tanks,
wells and tanker based vendor             Case study 2:  Another way to introduce privatisation
is through the introduction of structural adjustment programmes which in 1985
the IMF forced Argentina to adapt to in order to apply for new loans. In Buenos
Aires before privatisation only 70% of the population had access to a safe
water supply pre-1992 and only 58% of the people in city were connected to the
sewage system and the poor who were the least likely to be connected. There was
serioud water shortages in the summer. Before privatisation there was a lack of
investment and maintaince, poor customer service, service interruption and low
pressure, overstaffing, high unaccounted-for water and had low collection
rates. Only 1% of the connections were metered which meant if people misused
their water they would not have to pay. Some environmental problems were that since
people did not have sewerage connections they would use septic tanks to put
waste water inside which ended up contaminating ground water sources. Like we
said water privatisation always comes in after a crisis so after this crisis
the water was privatised. In Bueno Aires there was a concession with a group of
foreign firms and with the city there was a 30 year contract that water would
be provided and the system would be maintained for 30 years. The price was
still regulated and the consortium was overseen by a governmental agency. The benefits
of the privatisation were that child mortality fell by 8% in privatised areas
and 26% in the poorest areas (galiani, gertler water for life) Other positives included connections
increasing from 70% to 83% in 6 years after the privatisation. There was a lot
of investment in the water supply system, there was less unaccounted-for water.

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Productivity increased and the response time to complaints dropped and water
pressure improved (The Buenos Aires water consession” alcazar, Abdala Shirley).

 This only shows one part of the
story as privatisation had very negative impacts as well. The connection fee
went up by 84%. Most of these connections were not affordable for many
families. The price for the first 2 years of connection equated to 18% of their
income. The connections fee went up by 46%. The prices for already connected
users went up less and these people tended to be higher income families so they
benefitted from these reforms. The main burden fell largely on the poor. The water
connections which were metered went up from 1% to about 12% which meant 88%
could use excess water and not pay. The private company were trying to get the
poor families to pay for the cost of the meter which was $200 which they could
not afford. This led to the contract being renegotiated in 1997 and then
renegotiated again after the Argentine crisis of 2001. By 2002, water rates in
Buenos Aires had increased 177% since the start of the private concession. As
during the crisis, the value of peso fell and the water company raised prices
to cut its losses short and there was a lot of conflict between the company and
the government which led to the private water company decreasing the water
quality and investing less. The 30 year old contract was terminated in 2006 and
the government took control of the water supply for Buenos Aires. Although we
can say this neoliberal reform of privatising the water in Buenos Aires bought many
advantages but had 2 fatal flaws, a lot of the burden of the distribution fell
in the city’s poor     Conclusion                    

References