Private companies have been working to make a profit from water since the 1600s, when the first water companies were established in England and Wales. The first wave of water privatization occurred in the 1800s, and by the mid- to late-19th century, privately owned water utilities were common in Europe, the United States and Latin America, and began to appear in Africa and Asia.
But the privatization flurry faded, and throughout much of the 20th century water was largely a publicly controlled resource. In the US, for example, just 30% of piped water systems were privately owned in 1924, dropping from 60% in 1850.
It wasn’t until the late 1980s that the idea of private companies managing water re-emerged on a large scale. Under Margaret Thatcher, the UK government privatized all water companies in England and Wales in 1989 – making it the first country to do so. Coupled with the global emphasis on free market capitalism after the fall of communism, it began the second wave of water privatization that continues today.
Privatizing water was, and still is, encouraged by the International Monetary Fund and the World Bank, which make public-to-private takeovers a condition of lending. As a result, the early 1990s saw a rush of cities and countries around the world signing over their nations’ water resources to private companies.
It is argued by industry and investors that putting water in private hands translates into improvements in efficiency and service quality, and that services will be better managed. Privatizing also provides governments an opportunity to gain revenue by selling off water services, and for companies to generate profit. But with profit the main objective, the idea of water as a human right arguably becomes a secondary concern.
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