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The Age of Commodity: Water Privatization in Southern Africa

Published online by Cambridge University Press:  15 March 2006

Susan Spronk
Affiliation:
York University
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Extract

The Age of Commodity: Water Privatization in Southern Africa, David A. McDonald and Greg Ruiters, eds., London and Sterling, VA: Earthscan Press, 2005, pp. xv, 303.

This collection of essays is a cutting-edge study of neoliberal public service reform in Southern Africa. While most studies of water privatization, such as Karen Bakker's An Uncooperative Commodity: Privatizing Water in England and Wales (Oxford: Oxford University Press, 2004) and Vandana Shiva's Water Wars (Cambridge: South End Press, 2002), have concentrated on the transfer of ownership and control from the state to private corporations, privatization is more broadly defined to include the transfer of ownership and/or decision-making responsibility to NGOs and community organizations. The editors rightly emphasize, moreover, that privatization is not the only disturbing trend in public service reform. Corporatization—the creation of publicly owned and operated companies that run like private businesses—threatens to entrench the discriminatory aspects of infrastructure distribution that characterized colonialism and apartheid in the region in the previous era.

Type
BOOK REVIEWS
Copyright
© 2006 Cambridge University Press

This collection of essays is a cutting-edge study of neoliberal public service reform in Southern Africa. While most studies of water privatization, such as Karen Bakker's An Uncooperative Commodity: Privatizing Water in England and Wales (Oxford: Oxford University Press, 2004) and Vandana Shiva's Water Wars (Cambridge: South End Press, 2002), have concentrated on the transfer of ownership and control from the state to private corporations, privatization is more broadly defined to include the transfer of ownership and/or decision-making responsibility to NGOs and community organizations. The editors rightly emphasize, moreover, that privatization is not the only disturbing trend in public service reform. Corporatization—the creation of publicly owned and operated companies that run like private businesses—threatens to entrench the discriminatory aspects of infrastructure distribution that characterized colonialism and apartheid in the region in the previous era.

The editors make no apologies for providing a universally critical view of the processes of privatization and corporatization. The book consists of 15 chapters divided into three sections. Part I, on “Theory and Practice,” consists of four essays that discuss the ideological and legal frameworks that facilitate privatization of public services. The chapters on theorizing water privatization and the General Agreement on Trade in Services (GATs) are of interest to a general audience not specialized in African studies. In the introduction, Ruiters and McDonald argue that the driving force for privatization is the historical process of commodification, which is defined as “the transformation of relationships, formerly untouched by commerce, into commercial relationships” (21). Thoroughly Marxist in orientation, the authors link commodification to the development of capitalism, noting that likewise, privatization must be seen as a deepening of capitalist social relations and not “a mere collection of particular corporations taking over, or partnering in, water delivery” (13). While activists Karl Flecker and Tony Clarke avoid theoretical questions about the meaning of privatization, they provide a thorough overview of the mechanisms of GATS and the corporate lobby that has pushed for its implementation, arguing that the agreement has the potential to thwart local democratic initiatives such as the expansion of South Africa's free water policy.

Part II consists of seven case studies from South Africa, a country that has served as a showcase of “pro-poor” water policy amongst international financial institutions. Committed to overcoming the legacy of apartheid, the African National Congress implemented a free basic water policy in 1994 that guarantees every household a minimum amount of water each month. However, this policy has led to limited improvements in equity in service provision, since it was implemented within a general context of neoliberal economic reforms. With tightening public budgets, local water authorities have aimed to recover costs from their users. Service expansion has also been difficult, since the amalgamation of formerly black townships into districts has led to municipalities often being responsible for service areas twice their previous size; those who remain unserved cannot afford to pay. Alex Loftus argues that South Africa's free basic water policy has had a particularly negative impact on those who live in multi-family dwellings, the elderly and the sick, all of who have water needs greater than the allotted minimum. The pressures on local states to provide free water have also led to some dangerous cost-cutting experiments, such as pre-paid water meters in Johannesburg, which, as Ebrahim Harvey argues, resulted in a cholera outbreak when users who had exhausted their free supply returned to untreated water sources.

Even the best-case scenarios in this section provide valuable lessons on the dangers of privatization and corporatization. Laila Smith finds the effects of corporatization can be just as negative as more conventional forms of privatization for the poor. She argues that corporatization “undermines public accountability because it inherently involves a policy shift that moves away from political processes towards greater technical intervention that places a premium on efficiency at the expense of equity” (172). Moreover, rather than increasing efficiency, cost-saving mechanisms such as outsourcing have hidden costs; in the context of a weak regulatory framework, hiring private contractors may even be more expensive than having the job done by public workers, because the municipality is left repairing works that are poorly done. In Greg Ruiters' chapter on public-private partnerships in two eastern Cape towns, he cogently argues that concession contracts are not “benign arrangements to promote efficiency” but best viewed as “accumulation strategies by capitalist firms” (162). He suggests that in the French concession model that has become popular in Latin America and Africa, most risks are shifted onto the state: a rate of financial return is guaranteed by the contract; monitoring is difficult and costly because private partners report selectively and may deliberately offer false information; and private companies develop and maximize their own goals, which do not necessarily correspond to those of the community. Indeed, although privatization promised to rid the state of the burden of providing costly services, Ruiters finds that over the life of the concession in Fort Beaufort, the municipal council sunk deeper and deeper into debt.

The third section turns to four other case studies from Zambia, Zimbabwe, Namibia and Ghana. These chapters are particularly strong in connecting the macro context of neoliberal structural adjustment programmes and the local contexts of water privatization. Karen Cocq's chapter on Lusaka, Zambia, for example, discusses the ways in which World Bank-sponsored market reforms have strengthened the national elite, reminding readers that privatization policies are not simply imposed from the outside, but are eagerly promoted by local elites who seek to gain from new investment opportunities and, possibly, bribes. Rudolf Nsorwine Amernga-Etego and Sara Grusky present an excellent analysis of the World Bank's water sector reform proposal in Ghana, the strategies and influence on the government and civil society, and successful resistance strategies that have thus far stalled the Bank's plans for water privatization in the country.

In sum, clearly written and tightly edited, this is a valuable supplementary text for undergraduate courses in public administration and international development.