NGOs should get over the 1970s

By Alex Singleton | 8 May 2005

When listening to some of the development NGOs, it is like listening to hard-line socialists from the 1970s. Extensive state ownership and controls were done away with in Britain, but it is those policies that brought Britain down to its knees in the 70s that these NGOs want to impose around the world.

Take water. Water companies are privately-owned in the UK like many countries. Before water privatization, there was massive underinvestment and Britain's water was failing meet the stringent European Union requirements. Now, water quality is significantly higher and the water industry is much more accountable than it was under state-ownership. No one in the mainstream political debate would seriously advocate renationalizing it - even though its privatization was widely opposed at the time.

The gains from water privatization in developing countries are very much higher, where water provision is heavily politicized. It is often the case that if you're in with the President, you get running water. If you're not, you don't. You will have seen the pictures of Africans travelling miles to get water: that's the legacy of nationalization of water. It has been a complete unmitigated disaster. So that politically well-connected groups get rewarded, they do not have to pay the cost of the water. This means that running water provision is a drain of central government. The consequence is that there is a huge incentive not to increase provision. Where water privatization has happened, companies have been putting in the investment and increasing provision.

But ideological NGOs do not see this. They still think in terms of "people before profits", and regard free water as a human right. Well, free water is all very well but communism didn't work and nor do communist ideas of water provision. Private water provision offers the best method for reaching universal running water provision. It is time for the NGOs to get over the collapse of the Soviet Union and the end of the 1970s and be a little more constructive.