Fixing the price of water

IS water a really scarce commodity? Is it in short supply when we don’t count the vast quantities available in the oceans? Is the supply of fresh water falling behind its availability by such large amounts that a global crisis is imminent? Or is the problem — if there is one — that of increasing demand and careless use?

How serious is the situation in Pakistan? If it is so serious that water experts have begun to list the country among the world’s “water-stressed” states, what are the public policy options available to Pakistan?

I began answering some of these questions in this space last week. Today my focus will be on the areas important for consideration by those responsible for making public policies.

For some time now economists as well as water management experts have believed that they had fairly definitive answers to the questions I posed above. For instance, in 1995, Ismail Seragelddin, then my colleague at the World Bank and then considered to be one of the most informed authorities on the subject of water, worked strenuously to get the institution both of us worked for to focus on water. He wanted some of the World Bank’s formidable financial and analytical resources to be committed to developing water resources and to increasing the understanding about its efficient use.

In order to draw the attention of the Bank’s senior management towards the issue of water, he made a dour prediction that “the wars of the next century will be about water”.

That prediction mercifully did not come true. Research shows that most conflicts about water happened within countries, not between them. The World Business Council for Sustainable Development in its recently released report, ‘Business in the World of Water,’ says that in the past half century only 37 disputes concerning water involved violence. Of these 30 were between Israel and one of its several Arab neighbours. However, there were several serious disputes within countries. Among these the disputes involving Pakistan’s provinces figure prominently.

Inter-provincial quarrels about the distribution of water have kept serious state investments from taking place in Pakistan. They have also made it difficult for the country’s political masters to make provinces somewhat more autonomous in the areas that are their responsibility under the Constitution. Water disputes, in other words, have not only prevented the policymakers from addressing the problem with the analytical clarity it deserves, they have affected the quality of relations among governments at different levels.

Most experts agree that Pakistan needs a well thought-out strategy to save itself from a serious water crisis. This strategy must have several elements that nicely complement one another. It should deal not only with the important question of storing water that currently runs into the sea unused. It must also devise policies aimed at the better utilisation of water that is available from the current storage. Such a comprehensive approach has been endorsed by a number of multinational agencies now occupied with the question of water.

In its second ‘Water Development Report,’ the United Nations says that insufficiency in the availability of water is primarily caused by inefficient supply – mismanagement, prevalence of corruption, lack of institutions, bureaucratic inertia, inappropriate pricing policies or low investment – rather than actual shortages. The problem would not be solved by simply making large investments in dealing with the issue of supply.

For a decade or so – from the mid-eighties to the late nineties – the favoured approach towards managing the water crisis in developing countries was to place trust in private institutions. This approach was tried extensively in Latin America when, following the decision to privatise the assets owned by the state, a number of water utilities were acquired by European companies.

I visited one of these companies in the Spanish city of Barcelona in 1996 where I saw an impressive display of management tools that could be used to cut down on waste and thus increase the amount of water available in large municipal systems. The company had developed a business model that relied more on management than on new investments to make it possible for even the poorest segments of the population to gain access to good quality water. I saw a computer programme that could detect leakages in any part of the system thus preventing a great deal of waste.

The company believed that it could save the Latin American cities a great deal of financial burden that would result from large investments in increasing supply by introducing such modern management practices. The company put this belief into practice by successfully bidding for some public utilities when they became available under the various programmes of privatisation launched in the continent in the 1980s.

It soon discovered that what worked in the cities of the developed world could not be easily implemented in developing nations. This was mostly because of the unwillingness on the part of political authorities to put appropriate pricing policies in place. As a recent review of this experience puts it, “faced with significant political and economic risks, multinationals such as Suez, Thames Water and Veolia pulled back from big investments in Asia, Africa and Latin America in recent years.”

If the expertise needed for better management of water supplies cannot be imported through privatisation, what other options are available to policymakers in the developing world? I don’t believe developing countries’ societies are quite ready to entrust the supply of water to private companies who have to keep the bottom line in front of them in managing any part of their business.

In the case of water, as the experience in Latin America shows, making water a profitable business for the private sector means increasing tariffs to the point where it becomes a serious public issue.

If the full price of water cannot be charged then there must be some element of subsidy included in the structure of tariffs. However, that imposes a burden on cash-strapped governments such as those in Pakistan. To keep subsidies within limits, it is important to first educate the public about the important issue of pricing of water. Water is seldom priced as a scarce resource; it is usually treated as an infinitely available commodity. Like all free or cheap commodities, it is used mercilessly and wastefully. For a long time people thought that this resource could not possibly get exhausted. But then the evidence of misuse began to become visible.

As one observer puts it: “But the paradox is that poor people in slums pay much more for their water than the rich in the spacious air-conditioned villas of the same cities. The water sellers of Nairobi can charge between two and 20 Kenyan shillings for up to 20 litres of water. Rich people in developing countries, by contrast, have water services subsidised by the government.”

Nairobi is not unique in this respect. Exactly the same situation exists in Karachi where the poor pay multiple times more for water purchased from vendors compared to what is charged from the rich by the public utility company. The most effective way of dealing with this situation is to entrust the accountability of public utility to the people’s elected representatives. This should be done by the local governments who should then let the question of prices and subsidies be decided by commissions set up for this purpose that have citizens represented on them.

The question of pricing of water and appropriate subsidies extends beyond the urban areas and should include the countryside. It should also take into consideration the use of water that goes beyond drinking to other uses. Water scarcity also results in increasing social costs, paid by the most vulnerable segments of the population. In most rural societies, women are responsible for fetching water; as it becomes scarce, the distance they must cover and the time they must spend increase.

This has an effect on their health and the well-being of their families. In more difficult situations, women fetching water take their daughters with them thus keeping them out of school. Bringing the supply of water closer to the points of consumption saves women time they can spend on improving the welfare of their families.

“Water accounting” for deciding on the pattern of agricultural production as well as the products produced by the manufacturing sector is a relatively new undertaking. It reveals some surprising findings. For instance, some analysts argue that the pattern of exports from many developing to developed countries is, in effect, the export of water from water-short countries to those that have an abundant supply of water.

A few examples will help to underscore this important point. About 13 litres of water go into the production of a tomato, 70 litres into the growing of an apple. Cotton requires vast amounts of water – according to one estimate “about 11,000 litres of water go into making a single pair of jeans”. This kind of analysis leads to some obvious questions for a water-stressed country such as Pakistan. What should it produce and what should it export in order not to strain the situation of water?

That state should not mandate. It should leave the choices of production to individual producers after correcting the price of water. With the farmers and manufacturers charged appropriately to reflect the scarcity value of water – not the full price, perhaps, but one that is sufficiently high to make the producers think seriously about water as an input and not as a free good – we will see a dramatic change in the pattern of production in both agriculture and industry. The shift by the producers towards less water-intensive lines of production will help enormously in saving a great deal of investment that must otherwise be made.

As with so many other areas of public policy, the record of performance by the Pakistan government – not just by the one that is currently in office but also those that preceded it – shows that it is not well equipped to handle the water problem in a comprehensive way. One possible solution may be to appoint a “blue ribbon” commission that has the representatives of the people from the four provinces as well as experts to come up with a long-term strategy for the country to follow to save it from a serious water crisis.

Asia: strategic reflexes

THE test would hardly have made the news outside of India if the local air traffic controllers had posted a warning in advance, but when an Indonesian airliner had to turn around in Indian airspace a week ago and return to Jakarta to avoid flying into the missile's path, it was bound to draw attention.

So now the whole world knows that India has test-fired a nuclear-capable missile that can hit Shanghai and Beijing, and a few people (especially in China) may be asking: Why?The Agni-III missile failed its first flight test last July, but this one seems to have gone off very well. The missile, which reportedly can carry a 300-kiloton nuclear warhead, was not tested at its full range of more than 3,000 km (1,900 miles) on this occasion, but that is the number that gets people's attention. India's main potential enemy is Pakistan, which is right next door, and it already has missiles that can strike anywhere there. The Agni-III gives India the range to strike the Middle East (but it has no enemies there), or southern Russia and Central Asia (likewise) -- or China.

China is not India's enemy either, but there is a worrisome drift in Asian affairs, and the Agni-III is just the tip of the iceberg. To be fair, China has had missiles that could strike Indian cities for more than thirty years now (though they were actually built to reach American cities), so there is no monopoly of blame here. And neither China nor India is planning to attack the other. They're just doing what comes naturally for great powers.

As the strategists say (in every great power): "Intentions may change; capabilities are permanent." In other words, you don't trust in the goodwill of your neighbours; you plan and prepare for what they could do if they turned nasty. So China built some long-range missiles to deter the United States from attacking it, although the American missiles were really aimed mostly at the old Soviet Union. And a very long time afterwards, India builds long-range missiles to deter China from attacking it, although the Chinese missiles were really aimed mostly at the United States.

Why is India doing this now, thirty years after China built its missiles? Because India, with US encouragement, has finally decided, after a half-century of "non-alignment", that it wants to play the great-power game too. It has the resources these days, and it's just too galling to be left out when the Big Five get together to sort out the world. Even if playing the great-power game means you end up playing the nuclear-war game too.

There's more. American strategists do not think that China intends to attack the United States, but they know that China is going to be the second-biggest economy in the world in ten or fifteen years' time. China is therefore a potential challenger to America's position as the world's sole superpower, and as such it must be "contained." So for the past five or six years Washington has been busy renewing old military ties and forging new ones with countries all around China's borders.

Of those countries, the two most powerful by far are Japan (already an American ally) and India. Japanese right-wing politicians are tired of being a special country that has foresworn the use of force in its international relations (in the constitution that the United States wrote for it after the Second World War). They want to be a "normal" country -- well, a normal great power, really -- so Prime Minister Shintaro Abe has pledged to rewrite the constitution in order to remove those unreasonable restrictions on sending Japanese troops overseas and so on.

And since India is now a "normal" great power too, it is doing the things that normal great powers do, like making alliances with other great powers. Specifically, with the United States, with which New Delhi signed a ten-year military cooperation agreement in 2005. (No, it's not officially called an alliance. It doesn't need to be.)

When you go to Beijing and ask Chinese officials (off the record) how they feel about all this, they swear that they are not going to panick. They understand that this sort of thing is just the reflexive way that great powers have always behaved, and that they know it doesn't mean that America, Japan and India are planning to attack them. Quite right, too, and as long as they hang on to that thought no harm will come of all this.

But if they do panick at some point -- maybe over some crisis in the Taiwan Strait, or the disputed seabed between China and Japan, or some stupid incident like the American spy-plane that collided with a Chinese fighter in 2001 -- then all the pieces are already in place for an Asian Cold War. Which would be a serious waste of half the world's time at best, and a mortal peril to the whole planet at worst.

But they're all just doing what comes naturally to great powers. History doesn't repeat itself, as Mark Twain remarked, but it does rhyme. —Copyright

Controversy over uniform

DECEMBER 16, 1971, was the darkest day in Pakistan’s military and national history. Following a humiliating military surrender, the country stood dismembered.

The nation was in mourning. While the rest of the country was stunned, angry protesters hit the streets denouncing General Agha Mohammad Yahya Khan and his coterie of generals, but hardly a voice was heard against the army as such; and not a stray case of torching the uniform.

Such was the respect and regard for the army that a BBC documentary on the Fall of Dhaka telecast by the PTV had to be hurriedly withdrawn by the government after a massive public outburst against it. While the loss of Dhaka was deeply mourned, the army was admired mainly for the valour of its jawans and officers against overwhelming odds in an unequal war.

Images of the anti-army, anti-uniform and anti-Musharraf protests telecast last month by various TV channels were quite shocking. The clips of the effigy of the army chief’s uniform being burnt was the ultimate disgrace to the nation’s most valued and hard-earned change of garment --- the soldier’s uniform --- next only to the national flag as the symbol of national honour and sovereignty.

The sorry spectacle reminded one of the footage showing the victorious Indian general, Jagjit Singh Aurora, striping the vanquished Pakistani general Amir Abdullah Khan Niazi’s badges of rank, his medals and his personal weapon and making him stand in shame and disagree before millions of viewers.

That was in Dhaka 36 years ago --- the terrifying wages of defeat in war. What happened in Islamabad and elsewhere in the country was by our own people traditionally edifying the army and hero-worshipping the soldier, sailor and airman.

The March 2007 anti-uniform outburst might have been the sort of an epilogue to the sordid play in evidence since the president had second thoughts about his pledge to shed his uniform by the end of the year 2004. He still dons it. Its most awesome aspect, perhaps, came into the media limelight at the Army House in an eyeball-to-eyeball standoff between a perplexed Chief Justice and the president of Pakistan in khaki on March 9, 2007.

Regardless of the unhappy circumstances of the meeting, the exalted status of the CJ and his standing as a guest of the president, even if self-invited, could hardly be questioned. The prime minister, supposed to be in attendance at the crucial president-CJ meeting, was significantly missing from the TV footage. Was that one of those PR aberrations or a planned black-out?

I have had the privilege of wearing my service uniform for nearly a quarter of a century. And once you are in uniform, you are subject to the same discipline and service regulations as any regardless of the nature of the armed services you may belong to. A doctor, an engineer, a PR man or anybody else would be put on the mat for any breach of the MPML (Manual of Pakistan military Laws). The princlings of the armoured corp and swash-buckling infantarian, even a relatively sombre looking gunner enjoy the same perks and privileges as a member of the Army Service or Ordnance Corps.

A captain with three pips was admired for his three ‘phools’ (flowers) as much as a senior officer. How fondly I remember the heady days of 1965 war in Lahore when young officers moving back and forth between the front lines and the rear were greeted enthusiastically by bystanders along the way wishing them the very best of luck and ‘victory’ in the war. There was such euphoria and love and respect for anyone in uniform --- jawan or general.

Even through the depressing spell following the 1971 debacle, the uniform was still an object of respect as the country’s major security shield. When in uniform one could move about freely unarmed without an armed security escort. Even the agonising reappraisal of the tragic events that led to the fall of Dhaka was enlivened by the resolve to salvage and save the honour of the uniform.

Could we, in all fairness, claim to be as proud of the uniform today and as sure of ourselves as its once self-assured wearers? Is it at all edifying to see generals in their star-plated staff cars being escorted by armed soldiers? Let alone the ordinary commuter caught in the nerve-wrecking traffic jams caused by VIP visits, what might be its impact on the psyche of the common soldier protecting his general?

It reminds one painfully of General Yahya Khan’s last drive (March 25, 1971) from the President’s House (behind Dhaka’s Inter-Continental Hotel) to the airport in the Kurmitola cantonment to take the special flight back to Karachi. The motorcade comprising about half a dozen vehicles or so included two cars, one carrying the VVIPs and the other a decoy. In the civil-war like situation obtaining in Dhaka then, such deception and camouflage might have been unavoidable. Things are fairly normal in today’s Pakistan to justify formation commanders driving home-to-office under armed escort. Is it?

All talk about national defence being supreme acquires a hollow ring by the street spectacle of generals being driven under heavy armed escort. Thus runs a headline ‘Musharraf regrets Kharian suicide bombing, says the country’s defence is impregnable.’

What really hurts is to find the uniform becoming an object of negative comment by international media and governments. The US Congressmen and senators would want the general to shed his uniform to ensure the fairness and transparency of the coming electoral process. Commonwealth secretary-general was almost rudely vocal about it.

The writer is a retired brigadier.

Exploiting history

ACROSS central and eastern Europe, nationalists are exploiting the painful history of the second world war to whip up anti-Russian feeling and rehabilitate the far right as social and economic discontent grows – and the process is mirrored in Russia.

The latest in a string of such moves is the decision by the Polish authorities to block the reopening of the permanent Russian exhibition at the site of the Auschwitz death camp because of its description of some of its victims (from annexed pre-war Polish territory) as Soviet citizens. It's difficult to imagine a more sad and cynical debate than one about the citizenship of the massacred millions. Most were of course Jewish, and in the eyes of the Nazis both Poles and Russians were regarded as Untermenschen.

The Polish decision comes after Estonian MPs decided to remove a Soviet war memorial from the centre of Tallinn a few weeks back. The act authorising its removal is the Law on Forbidden Structures Act, a rather Orwellian name for a new cold war against history. The "forbidden structure" in this case is a 2m bronze statue of a Soviet soldier erected in 1947 to commemorate Red Army soldiers killed fighting the Nazis.

Bronze and marble soldiers are being toppled across eastern Europe. The campaign began in 1989-91 with the withdrawal of Soviet troops: Soviet memorials were demolished, Russian-sounding names of streets and squares changed, and red stars from walls cast away. In some countries, the tensions calmed after the turbulent transition period, but in the Baltic republics this anti-historical cold war seems to be a permanent crusade.

The removal of the Tallinn memorial is only the tip of the iceberg. A draft bill recognises the Estonians who served in the German army, including in the 20th Waffen Grenadier Division of the SS, as "fighters for Estonia's independence". Service in the SS is added to the record of work on retirement, while service in the Red Army as part of the anti-Hitler coalition is not.

Latvian right-wingers are also active in rewriting history. The marches of Latvian SS legions are well known – and even the most anti-communist friends of Latvia in the US and western Europe are shocked by these state-sponsored Nazi parades. Most Latvian Jews were murdered by Latvian police, and it is disgusting to read Latvian websites and books that put the blame on the Jewish victims of the Holocaust as "collaborators of Stalin".

Of course, there are many in the Baltic republics who reject this whitewashing of the Nazi past. And there are democrats in the Estonian and Latvian parliaments (not to mention the strong left in Lithuania), the media and NGOs, who defend the anti-fascist memorials and oppose the Nazi cult rallies. The Estonian president spoke out against the "irresponsible behaviour" of supporters of the "forbidden structures" law. Many Latvians oppose the SS rallies and call for equal rights for the country's Russian minority. These democrats need more support from western and central Europe.

Soviet memorials are respected in Berlin, and visitors to the rebuilt Reichstag can still see the graffiti carved on the old walls by Russian soldiers in 1945. Germany has set a good example on how to handle its Nazi past, but only a few eastern nations are ready to learn from it.

In my hometown, Budapest, the main Soviet memorial on the Szabadsag (Freedom) Square survived leftwing and right-wing governments. But last September, extreme right-wing rioters who set fire to the state television offices also attacked the memorial. In some Hungarian communities, newly elected right-wing mayors began their jobs by removing Soviet memorials and symbols.

In the west, the memory of the anti-fascist coalition is largely still intact, and only a few extremists claim it would have been better to have been allied with Hitler against the Soviet Union. But in the east, the fall of the Berlin wall created a vacuum in history. The new politicians and media failed to tell the complicated truth about the war, the old pro-Soviet cliches were replaced by anti-Soviet cliches. The tragedy of the Baltic republics under Soviet rule does not change the fact that the death camps of Auschwitz were created by the Nazis and liberated by the Red Army. And the crimes of the Stalinist regime do not alter the fact that millions of Soviet soldiers died for the freedom of Europe.

The Baltic republics should remember Stalin's victims, and we have to understand their mixed feeling towards Russia. But those who sacrificed their lives against the Nazi regime should be heroes for every democrat.

I have memories of Soviet armed intervention. I was five years old during the 1956 uprising in Hungary. I played with my friends on a Soviet tank burnt out by Molotov cocktails. I know how heroic the fight against the Soviet soldiers was. They had come as liberators but, due to the geopolitical reality, they became oppressors. Opposing the occupation didn't mean we wanted the Nazis back. —Dawn/Guardian Service

The writer is a Hungarian socialist member of the European parliament.