from the booklet

Blue Gold

The global water crisis and the commodification of the world's water supply

A Special Report issued by the International Forum on Globalization (IFG)

by Maude Barlow
National Chairperson, Council of Canadians
Chair, International Forum on Globalization (IFG) Committee
on the Globalization of Water



The dominant development model of our time is economic globalization, a system fueled by the belief that a single global economy with universal rules set by corporations and financial markets is inevitable. Economic freedom, not democracy or ecological stewardship, is the defining metaphor of the post-Cold War period for those in power. As a result, the world is going through a revolutionary transformation as great as any in history. The most direct result of economic globalization to date is a massive transfer of economic and political power away from national governments into the hands of the bureaucracies they helped to create. At the heart of this transformation is an all-out assault on virtually every sphere of life.

Everything is for sale, even those areas of life once considered sacred, such as health and education, culture and heritage, genetic codes and seeds, and natural resources such as air and water. Increasingly, these services and resources are controlled by a handful of transnational corporations who shape national and international law to suit their interests. The Washington-based Institute for Policy Studies reports that the top two hundred corporations are now so big that their total sales surpass the combined economies of 182 countries and they have almost twice the economic clout of the poorest four-fifths of humanity. Of the 100 largest economies in the world, 53 are now transnational corporations.

A new global royalty now centrally plans the market, destroying lives and nature in its wake. Says writer and former senior advisor to the U.S. Agency for International Development (USAID) David Korten, "The world is now ruled by a global financial casino staffed by faceless bankers and hedge fund speculators who operate with a herd mentality in the shadowy world of global finance. Each day, they move more than two trillion dollars around the world in search of quick profits and safe havens, sending exchange rates and stock markets into wild gyrations wholly unrelated to any underlying economic reality. With abandon they make and break national economies, buy and sell corporations and hold politicians hostage to their interests."


A striking feature of economic globalization is the widening gap between rich and poor; an entrenched underclass is being created between regions and within every society in the world. The 2000 United Nations Human Development Report says that the disparity in the level of income between the top 20 percent and the bottom 20 percent of the world's population is 150:1 and has doubled in the last 30 years. The world's 225 richest individuals have a combined wealth equal to the annual income of half of humanity. The three richest people in the world have assets that exceed the combined gross domestic product of 48 countries.

The richest fifth of the world's people consumes 86 percent of all goods and services, while the poorest fifth consumes just over 1 percent. Americans and Europeans spend substantially more every year on pet food, reports the United Nations, than the total money needed to provide basic health and nutrition for everyone in the world. Americans spend more money on cosmetics every year than the total amount needed to provide basic universal education.

It is no surprise, then, that the deep inequality sustained by economic globalization, whether intentional or not, is dramatically affecting the poor's access to water, the most basic of life's rights. The United Nations Economic and Social Commission on Sustainable Development says that fully three-quarters of the population living under conditions of water stress-amounting to 26 percent of the total world population-are located in developing countries. By 2025, the Commission projects, those low-income countries experiencing water stress will amount to 47 percent of the total world population.

In highly populated Asian, African and Latin American countries, massive increases in animal and human waste, intensified with the arrival of factory farms, are exposing more and more people to cholera and the deadly E. coli bacteria through contaminated water supplies. Most local governments cannot even afford basic chlorine to treat the water. Many local communities previously turned to aquifers and hand pumps to get around the problem of polluted surface water, now chemical and human waste seeping into these sources has rendered the water table dangerous as well. In Third World cities, it is now common to ration water to neighbourhoods for a few hours a day or a few days a week.

The United Nations reports that Europeans spend $11 billion a year on ice cream, $2 billion more than the estimated total money needed to provide clean water and safe sewers for the world's population. More than five million people, most of them children, die every year from illnesses caused by drinking poor quality water. While billions go without clean water, North Americans use 1,300 gallons of water per person every day.

But water inequality exists within societies as well. In 1994, when Indonesia was hit with a major drought, residents' wells ran dry, but Jakarta's golf courses, which cater to wealthy tourists, continued to receive 1,000 cubic meters per course per day. In 1998, in the midst of a three-year drought that dried up river systems and further depleted aquifers, the Cyprus government cut the water supply to farmers by 50 percent while guaranteeing the country's two million tourists a year all the water they needed. In South Korea, farmers south of Seoul recently armed themselves with hoes and blocked municipal water trucks from pumping water for city dwellers in fear it would leave their crops wanting.

Anne Platt of Worldwatch Institute reports that a family in the top fifth income groups in Peru, the Dominican Republic, or Ghana is respectively, three, six, or twelve times more likely to have water connected by pipe to the home than a family in the bottom fifth in those countries. Because they lack access to publicly subsidized utilities, says Platt, the poor often end up paying more for their water than do the rich because they must obtain it from illegal sources or private vendors.

In Lima, Peru, for instance, poor people may pay a private vendor as much as $3 for a cubic meter of water, which they must then collect by bucket and which is often contaminated. The more affluent, on the other hand, pay 30 cents per cubic meter for treated water provided through the taps in their houses. Hillside slum dwellers in Tegucigalpa, the capital of Honduras, pay substantially more for water supplied by private tankers than they would even if they paid for the government to install a water pipe. In Dhaka, Bangladesh, squatters pay water rates that are twelve times higher than what the local utility charges. In Lusaka, Zambia, low-income families pay, on average, half their household income on water.

Indigenous people have been impacted in a particularly brutal fashion by economic globalization and the theft of their water. It is the immediate relationship that indigenous people have to water that makes them especially vulnerable to any large-scale project that alters aquatic ecosystems. The massive hydroelectric projects of northern Quebec were devastating to the local Cree First Nations as well as to the caribou and fish upon which they depend.

Environmental writer Josh Karliner explains "Indeed the process of globalization is steamrolling social and financial support for the basic rights of the poor, increasingly shunting the disenfranchised off to the side, where they must fend for themselves in the brutally competitive 'market'. Growing numbers of people are becoming victims of globalization, as the forces of corporate expansion move into farmlands, deserts, oceans and river systems they previously ignored. Already poor but largely self-sufficient, communities across the earth are being cast into deeper social and ecological poverty, as well as cultural dislocation, as their resources are appropriated for the seemingly insatiable demands of the world's ever growing consumer societies."

Once recognized as a basic human right, water is now denied to huge numbers of the human family. Wise conservation of water cannot take place until the reality of inequality is confronted-and the reality of inequality cannot be confronted until the tenets of economic globalization are rejected.


Globalization creates economic and political structures that make an ecologically sound economy entirely impossible. Economic globalization refers to the integration of national economies into a single unified market. Transnational corporations pressure national governments to privatize, deregulate, eliminate trade and investment "barriers," boost exports, and generally relinquish state controls over the economy in order to create one global economy.

Such economic integration unleashes new levels of industrial production, intensifying natural resource exploitation and exacerbating all existing environmental problems. Heightened competition forces governments to roll back environmental protections in order to increase the competitiveness of their domestic producers and attract foreign investment. Economic activities that are ecologically sustainable are punished by deregulated market forces, making responsible management a liability that decreases competitiveness.

"Globalization creates political and economic structures whose patterns of production and consumption are both ecologically and socially destructive," says Victor Menotti, director of the International Forum on Globalization's Committee on the Environment. "All activity orients around exports, which, to be globally competitive, require centralized control over vast natural resources, the ability to access large amounts of finance capital, and the need to operate complex mega-technologies. Fewer workers are needed, so great numbers of people are left watching as local resources they once tended are now shipped away to others."

The result is a regime that contradicts the very principles of ecologically sustainable economics removing control over the land from people who live on it, discouraging strong regulatory protections, penalizing responsible management, and making impossible the task of getting the price right.

As nature is increasingly commodified, governments all over the world are dismantling environmental legislation or allowing industry to police itself. Countries are lowering corporate taxes and environmental regulations in order to remain competitive, the primary mandate of the new economy. As a result, governments are left with reduced fiscal capacity to reclaim polluted waterways and build infrastructure to protect water; at the same time they are also left with reduced regulatory capacity to prevent further pollution.

Globalization's imperative of unlimited growth makes it impossible for participating countries to make water preservation a priority. Non-industrial countries have restructured their economic systems to pay their debt and export their way to prosperity, destroying both natural ecosystems and environmental regulations in the bargain. The massive abuse and pollution of the internal waterways of most developing countries has been one price of belonging to the global economy. The depletion of underground aquifers and rivers to supply the water demand of transnational industry is another.

Intrusive technologies, including the massive transportation systems needed to carry out global trade, damage water systems as well. Roads carved out of wilderness destroy river and lake habitats as well as forests; increased global shipping multiplies the amount of waste dumped directly into oceans and lakes; and dredging for port and waterway construction destroys coastal habitat.

China has started work on a gargantuan $1 billion project to divert water from the Yangtze River to Beijing. Ten thousand workers have almost finished drilling a 420 kilometer series of tunnels to drain water from the middle stretch of the Yangtze, where it will either be sent through a high-mountain range, or through a new 1,230-kilometer channel to water-starved cities like Taiyuan on its way to the capital- a prospect the Worldwatch Institute compares to turning the Mississippi River to service Washington, D.C.

The governments of several South American countries have temporarily put a hold on the creation of a mammoth new water system that would channel 3,400 kilometers of the Paraguay and Parana rivers for industrial use and open up the interior of the continent to global trade. But environmentalists aren't celebrating yet; they know there are huge corporate interests at stake and they will not easily give up on this project.

"Given current corporate practices," says businessman and environmentalist Paul Hawken, "not one wildlife reserve, wilderness, or indigenous culture will survive the global economy. We know that every natural system on the planet is disintegrating. The land, water, air, and sea have been functionally transformed from life-supporting systems into repositories for waste. There is no polite way to say that business is destroying the world."

Not everyone is so gloomy about the world water crisis. After all, what some see as an ecological nightmare of unprecedented proportions, a growing number of private investors are seeing as a golden market opportunity.

Blue Gold

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