Water has been labeled the petroleum of the next century and the subject of World War III by Goldman Sachs and Newsweek respectively. While the implications of water scarcity are clear in places like Saudi Arabia and California, those in Santiago, Chile, a city paradoxically plagued by both flooding and a dearth of drinking water, are murkier. Spanning the Andes Mountains, Chile’s geography should hypothetically provide abundant water for its inhabitants. However, the government’s inadequate policies have created both unprecedented flooding and water contamination. Chile’s unitary system of government, which places national interests ahead of local ones, has left Santiago quite literally high and dry and set the stage for a water war.
By 2070, Santiago’s supply of available water is expected to decline by 40 percent, while its population is expected to expand by 30 percent by 2030. The increased strain on already limited resources presents a significant policy challenge for the already weak Santiago city government. Santiago is divided into 35 municipalities, each with its own local government. Those municipalities must coordinate to form any citywide policy coalition, as there is no equivalent of a state or regional government. Additionally, instead of local jurisdictions with representatives at the national level – like senators or members of the House of Representatives – the 15 Chilean administrative regions have extremely limited access to influencing national policy on behalf of their constituents. Because there is no clear intermediary between city-dwellers and the national government, most interaction between Santiaguinos and the central government has come in the form of citizen protest.
This system can be traced back to post-colonial independence, when the country opted for a unitary system after attempts at federalism failed. Since Chile occupies a far-stretching piece of land, the unitary system was desirable for its ability to link far-reaching parts of the country under a single central government. Conceptually, unitary systems can be beneficial in any country and have proven effective in compact states like France. Because there is only one main level of government, reactions to problems are generally much more efficient and enjoy less redundancy – in both personnel and services – than federal governments. But in Chile’s case, such a structure ignores the geographic diversity and often opposing needs that have developed across the country since it adopted its governmental structure almost 200 years ago.
For example, hydroelectric dams along Chilean rivers supply nationally-owned copper mines with electricity while the rivers themselves supply cities with water. Chile’s government diverts and dams major rivers to power state-run copper mines, thereby placing national economic policy ahead of the immediate wellbeing of city inhabitants. Further development of hydroelectric capacity is on the horizon, and the Chilean government has committed to building a dam on the Maipo River, which runs through Santiago. But the city government’s institutional weakness has rendered its efforts to counteract the country’s plan unsuccessful. Because unitary systems concentrate economic power and budgetary control in the national government, municipalities are helpless to influence policy in cases where financial factors play any substantial role.
In this case, Chile’s need to maximize the profitability of state-owned copper mines has made Santiago and its citizens hostages of national policy. Protests from local governments and civilians have failed to force the national government to consider the impacts on Santiago’s citizens. In fact, such grassroots movements in Chile have only been successful in protecting Chile’s southernmost rivers in Patagonia, which received considerable media attention and international outcry.
In many ways, this conflict mirrors one currently occurring over the Colorado River in the Southwestern United States. Due to widespread drought, the dam at Glen Canyon in Utah and Arizona is far less efficient than expected and the concentration of water causes 160 billion gallons to evaporate annually; much like in Chile, the dam is critical to powering the surrounding region while the lake provides a significant amount of water. While state governments in the United States can question whether the interstate value of the dams supersedes local necessities, no such structure exists in Chile. Instead, the central government is left to decide how to balance two important resources, water and electricity, in a careful game of political Jenga. Largely persuaded by lobbyist groups and private enterprise, the Chilean government, to the detriment of Santiaguinos, is coming dangerously close to allowing its tower of resources to collapse.
However, Santiago’s problems extend beyond the fact that there is no well-organized way for the government to act on opposing views to national policies. Chile’s national government has a longstanding history of giving significant influence to privately-run industry. With corporations lobbying the Chilean Congress, there is a considerable power imbalance between the small number of individuals running Chilean companies and citizens of Santiago, who comprise 40 percent of Chile’s population.
In the 1970s and early 1980s, with American backing, Dictator Augusto Pinochet liberalized the Chilean economy and privatized a number of state-run companies, including those that filtered and distributed water, and ceded water sources to private investors. When the Pinochet regime fell in the late 1980s, its legacy of privatization remained; the next administration awarded private concessions to companies in each of Chile’s 13 administrative regions. For many years, privatization in Chile had strong support across a plethora of industries, and economists worldwide pointed to Chile as a poster child for the benefits of liberalization. However, the principles touted by supporters of liberalization relied on responsible self-regulation, and widespread corruption has highlighted critical flaws in the Chilean system.
Such a system allows private corporations greater freedom to choose which areas to service, leading to potential regional imbalances. Furthermore, instead of purifying water, these corporations simply shut off the water flow if its potability is questioned by regulatory officials, as in April of 2016 following the contamination of the Maipo River by a flood-related avalanche . A government-run water company has a civic obligation to restore water, but private corporations have more mixed obligations. Aguas Andinas, the company that controls Santiago’s water, is a publicly traded company and as such has a fiduciary responsibility to its investors, potentially at the expense of its customers. That glaring conflict of interest may influence its distribution and provision of water to Santiaguinos. The company in turn enjoys one of the highest profit margins of any water utility company in the Americas, partially because the company does not purify the water it collects and distributes.
Water contamination from natural disasters and industrial pollutants compounds the problems associated with a private water sector, while unitary government leaves many citizens with little means of fixing this. The Superintendencia de Servicios Sanitarios, Chile’s water and sanitation administration, has deemed levels of heavy metal in two-fifths of Santiago’s municipal precincts too high for safe consumption and found arsenic levels to be double the limit considered safe to drink in two areas of the city. Corporations like Aguas Andinas have little reason to ensure proper treatment of water, since there are few regulations requiring they do so: The water and mining corporations heavily lobby the Chilean Congress against such measures. While private and government-run corporations have the backing of the national government, the lack of a strong counterbalance in the form of a state government has all but ensured that Santiaguinos have no voice in regulating the purity, distribution, or long-term conservation of their water.
To say that Chile’s unitary government is wholly problematic would be a gross mischaracterization; the unitary system has largely functioned well within the country. However, when the integrity of resource allocation to Santiago is pitted against the country’s national, heavily backed copper industry, weak local administration is no match for a central government that must consider the entire Chilean economy. If the country truly hopes to solve its water problem, then the Chilean Congress must recognize the voice and role of Santiago’s city government, develop mechanisms to design policy with the city’s interests in mind, and give them a proportionate voice in their own government.