Neoliberalism, Global Water Governance, and Sustainable Development

University of Lucerne | Faculty of Humanities and Social Sciences | Institute of Political Science Spring Term 2010 | Seminar “International Political Economy of Development”

ESSAY by Sam Schmid

Neoliberalism, Global Water Governance, and Sustainable Development - an Area of Conflict?

Introduction

We live on a blue planet. It is colored by water, which is essential for life. The better part of our bodies even consists of water. The global crisis of the ‘blue gold’, then, must be jeopardizing our very existence and, due to unequal distribution, especially that of the Third World. It may even (or already does) lead to conflicts and therefore is one of the most pressing challenges of the 21st century. After all, some 2.6 billion of the world's people lack access to basic sanitation facilities, and about 1.1 billion people lack access to safe drinking water (see Lenton et al. 2008: 248).

The purpose of this essay is to take a step back to reflect and suggest that addressing the ‘water crisis’ through approaches informed by neoliberal economic principles like pri­vatization contradict the notion of sustainable development in a way that has the poten­tial to contribute to exacerbating environmental as well as human emergencies. So, the question is: In what ways may neoliberal ideology and interests undermine the effective­ness of the structures and elements of global water governance and its efforts to attain sustainable development in the Third World?¹

The answer² will be developed by looking at (1) a theoretical perspective, (2) the debate on privatization, (3) the global water governance system (as an important background), (4) the UN Millennium Development Goals and the linked concept of sustainable devel­opment and finally (5) the drawing of conclusions about its relationship with neoliberal­ism.

Theoretical Perspective: A Neo-Gramscian Interpretation

Modernization theory³, which posits the linear progress from traditional to modern in so­cial organization and value systems, remains the dominant and powerful development ideology and teleology within the framework of neoliberal⁴ economics despite develop­ment failures and critiques. It remains fundamentally unchallenged, especially since the demise of the Soviet socialist alternative (see Kothari & Minogue 2001: 7f.). Moreover, “[development alternatives have not remained alternative for long - many of them have been successfully and often quite rapidly absorbed into the mainstream” (ibid. 9), one example being the notion of sustainable development (SD). However, I would argue that this discourse has been successful only in rationalizing globalization of market relations and capital accumulation rather than improving the lives of most human beings, not to mention the condition of the environment.

The increasing transnationalization and liberalization of production and capital creates an arena for the international integration of the powerful and influential, whose leverage is decisive even in the Third World, due to their involvement in the IMF and the World Bank (see Nef & Robles 2000: 34). This overarching global structure of knowledge, ideas, and institutions constitutes a hegemony and is the driving force of the neoliberal globalization project⁵. The critical (neo-Gramscian) theory of hegemony directs attention to question­ing such a prevailing world order. Here, hegemony is not understood in a traditional and strict sense assigning dominance to but one nation. Instead, it is thought of as an ex­pression of a broadly based consent, “manifested in the acceptance of ideas and sup­ported by material resources and institutions, which is initially established by social forces occupying a leading role within a state, but is then projected outwards on a world scale” (Bieler & Morton 2006: 10; see also O’Brien & Williams 2008: 31).

Linking it all back to environmental concerns, Harris & Seid (2000: 14) state:

“[T]he neoliberal restructuring of many of the developing economies has also placed the natural environment in danger. In order to repay their international debts and comply with free market dictates of the international lending agencies, many of the developing countries have followed economic development strategies that are antithetical to the preservation of their natural environment. In fact, the so-called free market strategies advocated by the World Bank and other international devel­opment agencies, despite the lip service they give to environmental protection, have generally accentuated the degradation of the natural environment in the de­veloping countries.”

Thus, many environmental crises in the developing countries are the direct result of the expansion and intensification of global capitalism and neoliberal policies. In that way, globalization aggravates problems in the South.

Water: Public Good or Commodity?

Among other axioms, neoliberal holds that the public sector should be widely privatized because private enterprise is said to be efficient and innovative. The collectivist concept of the public good is eliminated and substituted by the individual responsibility in a mi­nimal subsidiary state. Water has predominantly been a state-provided public good, but now “the capitalist market is presented as the natural and best way to address issues related to water“ (Roberts 2006: 7).⁶ The push for privatization and, hence, an under­standing of water as a commodity is especially severe in areas that are poor and bur­dened with serious external debts. Third World governments usually lack sufficient funds to subsidize water and sanitation services and they are routinely required to implement increased cost recovery programs, full cost recovery programs, or to privatize services as a condition of loans (see ibid. 10).

The international discourse⁷ has complemented this economic paradigm with a so-called political-institutional paradigm, in which the political framework is decisive in water man­agement reforms. Hence, “[t]he current water crisis is mainly a crisis of water gover­nance” (UNDP/GWP/ICLEI 2002: 2, cit. in Shering 2005: 103). Shering (ibid. 103f.) con­cludes: “Therefore, not only financial and technical means or economic incentives are important but also supportive institutions, such as a sound water policy and law, civil so­ciety, state capacities or the general political framework”.

Actors and Elements of Global Water Governance

But what is water governance⁸ ? Overall, it is hard to specify, partly because norma­tive and analytic dimensions often mix. The Global Water Partnership’s (analytical) definition was adopted by the UN: “[...] water governance refers to the range of politi­cal, social, economic and administrative systems that are in place to develop and manage water resources and the delivery of water services, at different levels of so­ciety” (UNESCO 2003: 372, cit. in Shering 2005: 105).⁹ The normative dimension includes factors influencing water governance that raise the question what we can learn from them with respect to what water governance should be and how it can be reached (see ibid. 109). Then, Global Water Governance (GWG) can be defined as “the development and implementation of norms, principles, rules, incentives, informa­tive tools, and infrastructure to promote a change in the behavior of actors at the global level in the area of water governance” (Pahl-Wostl et al. 2008: 422).

From 1990 onward, the international community has stepped up its efforts to bring atten­tion to water-related issues. This concern led to two significant conferences in 1992: the International Conference on Water and the Environment in Dublin and the United Nations Conference on Environment and Development in Rio de Janeiro. Since the subsequent formulation of the ‘Dublin principles’ also involved labeling water as an economic good, it is here that the commodification of water has its roots (see Roberts 2006: 4). However, in Rio, while governing water was not a priority, the idea of ‘sustainable development’ was introduced and later the UN Commission on Sustainable Development was founded (see Shering 2005: 104, Taylor & Curtis 2008: 325).

Additionally, the World Water Forum is held every three years since 1997. At the 2nd World Water Forum in The Hague in 2000, the standard of Good Governance was in­cluded as one of the main challenges to reach water security. The term ‘water gover­nance’ then entered the international discourse at the Bonn Freshwater Conference in 2001, broadening the definition to entail institutional reform, Integrated Water Resources Management, legal frameworks and equitable access (see Shering 2005: 101/104). This was confirmed by the 2002 World Summit on Sustainable Development in Johannes­burg. In between, the Millennium Summit in 2000 was the birthplace of the Millennium Development Goals (MDGs), in which SD was assigned a crucial role and the target of reducing by half the proportion of people without sustainable access to safe drinking wa­ter and basic sanitation was included (see next section).

Furthermore, GWG involves a number of UN institutions (e.g. the FAO, UNESCO, the WHO, the World Bank, and the IMF), funds (e.g. the Global Environment Facility); and programs (e.g., the UNDP and the UNEP). Additionally, in 2003, UN Water was estab­lished as a coordinative umbrella mechanism. UN Water supports activities like the UN­ESCO-led World Water Assessment Program, which has published a triennial World Wa­ter Development Report since 2003 (see Pahl-Wostl et al. 2008: 425f.). Several other international networks and partnerships have emerged, such as the Water Supply and Sanitation Collaborative Council, the Global Water Partnership and the World Water Council, as well as faith-based organizations and NGOs. A further example of global lea- dership efforts is the UNDP’s decision to focus its Human Development Report of 2006¹⁰ on water and sanitation, which “observes - for water supply and sanitation explicitly, but for the whole water sector implicitly - that there is a surplus of conference activity and a water policy, and water administration, whereas informal rules are for instance arrangements and tra­ditions such as gender relations or corruption (see ibid. 105f.).

[...]

¹ I agree with Lowi (2001: 131), who states that ,,[t]he task of political science should now be to expose the loose and insecure moorings of economic ideology and to develop an approach more appropriate to the realities of our time.”

² My effort, it must be added, is clearly constrained by the fact that it is only a short overview essay without an empirical case.

³ Valenzuela & Valenzuela (1978: 357ff.) offer more on the modernization theory.

⁴ Nef & Robles (2000: 28) call neoliberalism the leading ideological and programmatic policy ‘software’ and characterize it as a “set of beliefs, doctrines and policies, [favoring] the interests of transnational capital (especially finance capital), and influencing decision-making at the highest levels within the Group of Seven nations and beyond.”

⁵ Neo-Gramscianism views globalization as a project (as a result of neoliberal policies rather than an established fact) as well as a historical process. Globalization may be well illustrated in a metaphoric manner as a “unification of the puddles, ponds, lakes and seas of village, provincial, regional, and national markets into a single global ocean” (Luttwak 1999, cit. in Harris & Seid 2000: 5).

⁶ “These tendencies to present the introduction of capitalist market imperatives as natural/inevitable and as the best/most efficient way of organizing social relations is an inherent aspect of neoliberalism and the liberal economic tradition from which it evolved” (ibid.).

⁷ Shering (2005) offers an overview of this international disourse.

⁸ Governance - as opposed to government - involves many governmental and non-governmental actors within formal and informal institutional patterns that contribute to policy formulation and imple­mentation, making the system of coordination and steering processes very complex (see Pahl-Wostl et al. 2008: 423).

⁹ Politics of water governance also include wider societal and economic factors that reflect the general political configuration of a country as a contextual setting. Formal water institutions are water law,

¹⁰ To some extent, this report can be seen as a counter-discourse to neoliberalism (cf. Mollinga 2007: 1238).