FEBRUARY2007

ZNet Commentary
The UNDP's wrong turn on water rights November 27, 2006
By Patrick Bond and  Greg Ruiters

A fortnight ago, the global launch of the United Nations Development Programme (UNDP) Human Development Report 2006 (HDR) was in Cape Town, an appropriate choice in a diabolical way. South Africa is apparently considered the UN's ideal-type setting - and maybe deservedly so, for what might be called 'talk left' policies accompanied by 'turn right'  practices: turning the water tap off for poor people.

The next day the Mail & Guardian newspaper carried an essay, 'Water is a human right', by Kemal Dervis and SA finance minister Trevor Manuel.  Dervis served the World Bank from 1977-2001 before moving home to Turkey as minister for economic affairs. In 2005 he won the UN's third-highest job: UNDP chief administrator, taking over from Mark Malloch Brown (now Kofi Annan's chief of staff), whose prior job was public relations vice president at the Bank.

Manuel was chair of the board of governors of the Bank and IMF in 2000 and then ran their important Development Committee from 2001-2005. As SA finance minister he imposed - without consultation - a neoliberal economic policy in 1996, partly designed by World Bank economists using a Bank economic model whose predictions were disastrously off the mark.

The Bank, by the way, advised former SA water minister Kader Asmal in 1995 that he shouldn't provide the free water promised in the Reconstruction and Development Programme and instead needed 'a credible threat of disconnections'. By 2003, 275 000 families faced water cutoffs due to non-payment, according to former water director-general Mike Muller. In 1999 the Bank labeled its 1995 advice as 'instrumental' for the 'radical revision' of water pricing policy here.

But now Dervis and Manuel advocate water as a 'human right'. Are your bullshit detectors turned on, dear reader? As recently as mid-2003, Manuel told City Press newspaper that 'free water has not benefited the rural poor and is difficult and costly to implement'.

There are several problems. First, the UNDP's 20 liter per person daily target provides just one and a half flushes of the toilet. At least, recommend Dervis and Manuel, 'those who cannot afford to pay [should] get it for free.'

They claim, 'In South Africa, the basic policy framework' along these lines 'is now in place' thanks to 'the adoption of a rights-based approach to water supply'.

In reality, although it did change from a straight neoliberal approach at the time of the 2000 municipal elections, SA's 'basic policy framework' for water pricing is still far from being rights-based. Its roots can be found in these post-apartheid decisions:

o the state drastically increased the price of municipal water since 1994, especially affecting low-income black people - e.g., in the largest 'market', Johannesburg, prices rose far higher than inflation, in part because of the onstruction of obscenely expensive Lesotho mega-dams whose raw water costs five times more than pre-dam water (conservation was not considered a serious option); o operating subsidies from national to municipal governments were chopped during the 1990s by 85% in real terms, as one agency admitted, with especially large cuts in the national water budget that supported wretched ex-Bantustan towns;

o the much smaller municipal water subsidies together with the doubling of unemployment in the years after apartheid (thanks to Manuel's neoliberal macroeconomic policies) logically led to much higher non-payment rates for impoverished citizens, and then the disconnection of water supplies to roughly a million people per year, according to several studies; o to deal with non-payment, the state began installing Ventilated Improved Pitlatrines ('VIPs') for poor people even in urban Johannesburg, as well as pre-paid water meters in low-income, black neighbourhoods, starting in Soweto; and o meanwhile rural families relying on state-supplied communal water taps witnessed the breakdown of many, if not most, systems, once again because of affordability constraints that prevented the 'full cost recovery' required to keep the taps turned on.

Johannesburg Water adopted the pre-paid meter tactic shortly after the British government's 1998 banning of these same devices on grounds that self-disconnections due to poverty represent a public health threat - especially poignant for South Africa at a time of the HIV/AIDS crisis and in 2000-02 the country's worst-ever cholera outbreak. The matter is now being pursued by the Campaign Against Water Privatisation in the courts.

Then in July 2001, the world-famous 'Free Basic Water' policy was adopted, in an apparent policy U-turn. But even when implemented in the larger municipalities - for regrettably it does not exist in most smaller ones - the policy provides just six kiloliters per household per month no matter the size of the household (or number of HIV  family members). After that relatively puny amount, the price rises to excruciating levels.

To illustrate this last point, the city where Free Basic Water policy originated, Durban, provided 6 kl/month free yet at the same time more than doubled 7  kl/month water bills between 1997-2004. The result was the doubling of the average price of water paid by poor people: from R2 to R4/kl over that period.

What was the impact on the poorest one third of the city's water customers? Shockingly, in the city with the most acute AIDS, cholera and other water-related diseases, the poorest third of households lowered their consumption from 22 to 15 kiloliters from 1997-2004 (an extraordinary -0.55 'price elasticity', the measure economists use to study the impact of prices on consumption).

The HDR compares Durban water prices with four other major Third World cities and notes that from 7-20 kl/month, it is the highest priced, a third more costly than Dakar and seven times more pricey than Bangalore.

But ironically, the HDR then praises Durban in three bizarre and basically inaccurate ways:

o 'in Durban, South Africa, the lifeline tariff results in a progressive distribution of water subsidies because 98% of poor households are connected'; o 'Durban, South Africa, provides 25 litres of water a day free of charge-the lifeline or social tariff-with a steep increase above this level. This is an important part of the legislative framework for acting on the right to water'; o 'As part of a national strategy of water for all, South Africa transferred a water utility in Durban to a concession. Despite concerns about equity, there has been marked improvement in access among poor households.'

First, by no stretch of the imagination are 98% of poor households connected to Durban's water grid. Indeed there are ongoing evictions in still-proliferating shack settlements, which contain probably between 1/5th and 1/3rd of households.

Second, the 25 liters per day free of charge is an overestimate of what Durban provides larger families, for the 6 kl/month works out to those measly two flushes worth only if the family size is below eight.  Women-headed households with AIDS orphans and backyard renters or room tenants are not atypical, and disputes over the small amounts of available water can be debilitating, especially at times of funerals or family events when much more water is needed.

Third, as far as a private concession goes, the UNDP HDR probably means not Durban but Dolphin Coast (since the latter is run by a French for-profit firm while Durban's managers are public sector executives who simply have a for-profit orientation). But sources as diverse as the South African government Human Sciences Research Council and New York Times report that the Dolphin Coast experiment is a failure with regard to poor people's access.

To promote 'core strategies for overcoming national inequalities in access to water', the UNDP report advocates 'establishing lifeline tariffs that provide sufficient water for basic needs free of charge or at affordable rates, as in South Africa.'

But not only have municipalities sabotaged the African National Congress 2000 election manifesto promise: 'ANC-led local government will provide all residents with a free basic amount of water, electricity and other municipal services, so as to help the poor. Those who use more than the basic amounts will pay for the extra they use.' As noted, the convex shape of municipal water price tariffs negates this promise, a classic example of micro-neoliberalism.

In addition, the SA Treasury, the Department of Water Affairs and Forestry, the Development Bank of Southern Africa and the Department of Provincial and Local Government persistently sought for-profit partners - and some NGOs which also have a full-cost recovery mentality - to implement policy. The UNDP, World Bank, IMF and World Trade Organisation have been pushing water commercialization for years across Africa.

This is why it is amusing to read, from Dervis and Manuel: 'Too much of the policy discussion on water delivery has been dominated by a dead-end debate on privatisation versus state ownership'. They advocate 'some combination of public and private sector involvement.' These are weasel words, in view of the record of water privatisation in Africa:  systematic failure.

On cross-border water transfers, the HDR notes 'the potential benefits of cooperation' by arguing that that the Lesotho Highlands Water Project 'is generating revenue for Lesotho and improved water for South Africa'.  Unmentioned are the 1998 SA National Defense Force invasion of the Katse Dam site (when two dozen sleeping Basotho soldiers were killed), the massive ecological damage, the tens of thousands of peasants displaced, and the massive increase in water prices caused by this notoriously corrupt, apartheid-era sanctions-busting mega-dam scheme - or the alternative strategy (never attempted) of conservation and less uneven regional development.

In one painfully honest paragraph, however, the UNDP report concedes some problems: 'As the reforms have rolled out, they have generated a political debate over design and implementation. Some argue that the 25-litre threshold for free basic water is too low. Supplies in some areas have been erratic, forcing households to collect water from far away. Moreover, government pricing policies have led to supply cutoffs for nonpayment in some areas, raising concerns about affordability.  Progress in sanitation has been less impressive than in water. There are still 16 million people- one in three South Africans-without access to basic sanitation. The absence of a consensus on an acceptable basic level of sanitation, allied to problems in generating demand, has contributed to the failure.'

This is a damning indictment of post-apartheid water policy design and implementation mistakes. It helps explain why SA witnessed nearly 6000 protests in a recent 12-month period (reported by the SA Police Services). South Africa's water wars have become world famous, as citizens' groups illegally reconnect pipes that have been cut off due to nonpayment, or destroy the hated pre-paid water meters, or dump excrement from the apartheid-era 'bucket system' of sanitation at the doors of their elected officials.

In addition, the UNDP report criticizes Johannesburg's controversial contract with Paris-based Suez, 'because delegation-the transfer of operating authority from local government to utility and from utility to third companies-can obscure accountability and delivery' and because Joburg metro is 'both utility shareholder and regulator.'

Captive regulators are ubiquitous in SA, and the national government's failure to even 'name and shame' recalcitrant municipalities - as promised by then water minister Ronnie Kasrils in 2003 - is now legendary. The only serious watchdogs of the Joburg Water company have been the AntiPrivatisation Forum activists in several black townships who keep up pressure for human rights. A recent report by the APF (www.apf.org.za) notes the persistence of dissatisfaction regarding pre-paid meters in Soweto and Orange Farm, for example.

In sum, the UNDP HDR and the Dervis/Manuel water-rights discourse are less absurd than SA health minister Manto Tshabalala-Msimang's vegetable stall at the recent Toronto AIDS conference. But given the neoliberal devils in the details, water pricing reform is still long overdue in South Africa. Without it, government's 'talk left, turn right' will continue to be met by substantial community resistance.



Patrick Bond directs the UKZN Centre for Civil Society and Greg Ruiters directs the Municipal Services Project at Rhodes University Institute for Social and Economic Research.