Mon, Mar 30, 2009 - Page 9 News List

Chile offers dose of water sanity

Twelve years ago only 17 percent of sewage in Chilean urban areas was treated, but that figure jumped to more than 82 percent as of 2007. Putting water rights and management in the hands of the people made all the difference

By Maria de la Luz Domper

Because the rates reflected the real cost, consumers reduced water use by some 10 percent in about three years. More houses were connected, nearing 100 percent coverage for drinking water and 95 percent for sewage in urban areas. As of late 2007, more than 82 percent of sewage was treated, compared to only 17 percent just a decade earlier.

This success came from a comprehensive step-by-step approach by policymakers.

First, government slowly increased water rates before selling the companies. Second, to address potential adverse effects on poorer consumers, the government introduced an individual water consumption subsidy in 1989. The subsidy aimed at poor households pays for a fixed quantity of water (15m³ a month). The household must pay a portion of the bill and for consumption above the fixed quantity. Unlike water subsidies in other countries, Chile’s encourages rational use and ensures that the household (rather than other users) benefits directly.

The success of Chile’s water management lies in empowering its citizens. Property rights for water mean they can both defend and exchange their rights, with judicial and executive enforcement. At the same time, households, including the poorest, have seen dramatic improvements in service while industry pays prices that reflect the true cost.

The system is still evolving and still has problems, like any large system, but it is making life better. Policy-makers at the World Water Forum could help their poor by following Chile’s lead in water management — and ignoring the agitators.

Maria de la Luz Domper is a researcher at Libertad y Desarrollo, a think tank in Santiago, Chile.

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