By Jeff Rudin

Street protests have become an almost daily occurrence in recent times. Water figures prominently amongst the triggers of such public anger. A complex of inter-related political, financial and technical factors are involved. In this the second part of his focus, Jeff Rudin examines these and argues urgent action is needed, not least by popular forces.

The political economy of the framework of water

South Africa is a very rich and developed country, yet able to provide neither safe tap water nor safe and acceptable sanitation to everyone. The modest proposals of the 1994 Reconstruction and Development Programme (RDP), representing the urgent needs and expectations of the people oppressed by apartheid, are largely unmet, despite the passage of more than 14 years. The RDP promised a universal supply of safe, affordable water at more than double the current amount, with proper sanitation on each site.

The post-apartheid government has done more than just endorse capitalism; instead it has embraced neoliberalism, which celebrates capitalism’s inhumanity. Government succumbed to the only form of capitalism recognised by the international financial institutions and the investors they represent.

Recall that the government’s largest budget item for the first few years after 1994 was paying off the apartheid debt. This large expenditure coincided with the neoliberal inspired reduction in the national budget. Water has always been a low priority and the cut-back in public spending impacted directly on the already very small budget for water and sanitation.

This politically driven attack on public expenditure took another classical neoliberal form: basic human needs – like water – were commodified and commercialised with state structures being corporatised into narrowly focused business entities preoccupied with self-reliant financial viability. In this way, citizens with basic needs became customers whose humanity was recognised only by money. The imperatives and ethics of business predominate in these nominally public organs.

The political economy of water finance

Enter the neoliberal shibboleths of ‘full cost recovery’ and ‘the user pays’. Like the private businesses they are supposed to be, municipal water and sanitation providers are expected to be financially self-reliant recovering the full cost of the service they provide.

For most people these new principles are a huge calamity. Having been deprived of safe water and modern sanitation during apartheid, the dispossessed now have to pay for the fruits of their liberation. The people, previously excluded because of their colour, are told that everything has a price, to be paid in full. Furthermore, the level of the service they get – whether taps are in houses, yards, or a long walk away and whether sanitation is primitive, modern or in-between – is determined by what they pay.

The first of the many problems faced by today’s authorities is that most people are poor and that extracting water from stones is easier than expecting full-cost recovery from people whose daily bread is poverty. The water authorities refused to accept this reality, at first, hence the mass water cut-offs of the 1990s. Some ten million people were disconnected according to the Municipal Services Project. No money, no water.

But perfect market logic has unwelcome political consequences. Mass disconnections are embarrassing for a government that likes its slogan of ‘a better life for all’. Worse still from no
water, flows poor health, whose outcomes are sometimes of such proportions that they make uncomfortable national and international news. The huge cholera outbreak in KwaZulu-Natal in 2000 is a case in point. The death of more than 140 babies in the Eastern Cape is a most recent example.

Prepayment water meters came to the rescue. When money runs out, people now disconnect themselves in the privacy of their own homes. Gone are the public and noisy confrontations with the hapless workers who do the disconnections; gone are the awkward statistics on water cut-offs. What remains are huge and largely uncollectable debts, health problems and the unrequited expectations of the people.

Free basic water

Free basic water (FBW) was introduced to solve these various problems. Although anathema to neoliberalism – for whom nothing should be free unless the beneficiaries are already rich – the government commendably insisted on its innovation, as a matter of principle.

Unfortunately, pragmatism is also part of the equation. Cost recovery made a counter-attack in the form of the amount of water considered to be basic: 25 litres per person per day. The cost of this amount of water is more or less equal to the administrative costs of collecting the money. The free water effectively costs the state nothing, which is why the government has done nothing to increase the amount of basic water, despite its longstanding legislative and policy commitments.

It explains why the government and Johannesburg Municipality are appealing the recent High Court decision that FBW must be doubled. (See the June/July issue of Amandla!)

Cost recovery fights back in yet another contradictory way

When first announced in 2000, all households were supposed to receive FBW. Free water to those who can ‘afford’ it is deeply offensive to the firmly entrenched neoliberal psyche of (most) local councillors and their water advisers. Thus, the pitiful amount of FBW is increasingly being restricted to ‘indigents’, governed by indigent policies, with consequent indigent registers. Few have the policies, and the registers predictably capture only a small proportion of the known eligible numbers. These unregistered ‘indigents’ are part of the growing crisis.

Central government recognises the dire financial straits of most municipalities. The government makes two financial contributions to assist municipalities meet their statutory water duties – the Equitable Share to finance FBW and the Municipal Infrastructure Grant to pay for building the water and sanitation infrastructure – but neither is remotely sufficient to meet urgent needs.

The principal defect is the large-scale neglect of maintenance and renewal of the existing infrastructure. Available resources have only one focus: providing new infrastructure so that the government can (misleadingly) claim to have met its Millennium Development Goals of providing universal access to water and sanitation.

The political economy of capacity

The financial mess, the alarming state of the infrastructure, unsafe water and virtually non-existent enforcement of regulations are underpinned by the chronic capacity problems of municipalities and the national water department alike. While the problem is real, the authorities are in denial over the causes.

Much of the desperately needed missing skills are available – but in the much more expensive private sector. This private sector pool contains a large number of professionals who once worked in the public sector. Principal reasons for the migration and hence the institutionalisation of dependency on the private sector are the:

• Neoliberal-inspired contraction of the state;

• Neoliberal-inspired privatisation, outsourcing and sub-contracting;

• Neoliberal-inspired promotion of ‘entrepreneurs’ that results in public officials having business interests in the private companies that now feed on public services; and

• Preferential procurement, required by law as part of BEE (Black Elite Enrichment).

The political economy of water scarcity

Water scarcity in South Africa is amongst the world’s worst. Johannesburg is the largest city in the world without its own natural water supply. The fixation on growth at all costs means that water scarcity is seldom if ever given effective consideration. Growth – an expanding GDP – is uncritically seen as an unconditional good. Growth means capital investment, and investment, especially by foreigners, is the cardinal premise of the government’s financial and economic policies.

This rules out any rational assessment of water needs and allocations. Water restrictions that in any way limit capital accumulation – whether in mining, agriculture, construction, leisure, tourism or manufacturing – send the ‘wrong messages’ about what is supposed to be South Africa’s very friendly investment climate. The Department of Water Affairs and Forestry (DWAF) is aware of the fast-approaching water scarcity crisis. Unfortunately it is still only talking about it. Worse still, the Department’s draft Strategic Framework for Water for Sustainable Growth & Development takes both capitalism and its neoliberal form as unquestionable givens, bestowing freedom to produce or invest in anything (within very broad legal parameters) that might maximise individual profit, regardless of the social, economic and environmental costs.

Neoliberalism’s chains

But worse is still to come. Sending the ‘wrong signals’ has implications way beyond water. Being investor friendly was originally seen as the shortest route to development. It has now moved on to become an absolute essential, for as long, that is, as South Africa remains within the neoliberal fold. Our ‘economic fundamentals’ daily lauded for their robustness are in fact a scare away from collapse. With South Africa’s current account deficit at a 27-year high and 300% more than the safety margin, our financial system survives on the inflow
of speculative capital. Anything we do to displease these highly mobile speculators could trigger a stampede of ‘hot’ money to friendlier climes.

The neoliberal trap has been truly sprung. We are now obligated to be well behaved. There is a way out, but it perforce has to be a radical one. We need the boldness to break free from neoliberalism. The water crisis might perhaps provide the pressure for such re-thinking. But even this is unlikely to happen without movements taking up the struggle.

Read more articles from Amandla! Issue #3, August/September 2008