The Adaptive Nature of the Neoliberal State and the State-led Neoliberalisation of Nature: Unpacking the Political Economy of Water in Lima, Peru

Abstract

The neoliberalisation of water constitutes an emblematic illustration of the enduring encroachment of neoliberalism upon nature. Previous studies in Latin America have examined the transition from Keynesian water utilities to the neoliberal provisions of water services, but paid less attention to the adaptability of the state apparatus and the systematic adjustments required to sustain neoliberalising strategies. Addressing this gap in the literature, this paper examines two decades of change in the public water services of Lima, Peru, as one of the Latin American countries where neoliberal reforms have been more comprehensive and resilient. The analysis focuses on the water policies advanced by the national state and with the reconfiguration of the state apparatus as a result of extra-economic factors. The neoliberalisation of water may have improved the situation at the aggregate level, but inequalities, scarcities and vulnerabilities have been maintained and even reinforced. The achievements and failures of the neoliberalisation of water have ultimately depended on a range of politico-economic and socioecological interactions creatively mediated by the state apparatus. In the end, however, the neoliberal adjustments in the structure and operation of the state have replicated the double exploitation of nature and society that has long shaped Peruvian economic history.

Keywords:

• water management
• political economy
• ecological economics
• political economy
• political ecology
• economic geography
• neoliberalism
• Peru
• Latin America

Notes on contributor

Antonio A.R. Ioris is a lecturer in environment and society in the School of Geosciences at the University of Edinburgh. His work focuses on the political ecology of the state and the evolution of environmental governance. He has written various articles on the introduction of water regulatory reforms, water values and the contradictions of the neoliberalisation of nature. He recently edited the book Tropical Wetland Management: The South-American Pantanal and the International Experience.

Notes

The research was supported by a grant from the Leverhulme Trust. The author is also grateful to Dr Ben Davies, Kathryn Louise Miles and Kate Symons for their suggestions on earlier versions of the paper and to two anonymous referees for their constructive criticism.

1. The current discussion is based on fieldwork carried out in 2009, which included participant observation and systematic visits to the metropolitan periphery, as well as the attendance of public events and interviews with government officials, private companies, trade union leaders and civil society activists. Respondents came from a wide array of entities that represented the breadth of interests linked to the provision of public services, social movements and environmental conservation. In addition, extensive secondary information, engineering projects and policy documentation were obtained from the databases of the regulatory agency (SUNASS), the water utility (SEDAPAL), the National Library's researchers division and the Office for National Statistics (INEI).

2. Page 315,085 of the public gazette El Peruano, 19 March 2006.

3. After half a decade with modest results, the Peruvian economy achieved significantly high rates of growth with Alan García: 7.7 per cent in 2006, 8.9 per cent in 2007, 9.8 per cent in 2008, 0.9 per cent in 2009 and 8.8 per cent in 2010 (according to INEI statistics). At the same time, during the García Administration, there was a significant increase in the number of socionatural conflicts (that is, an increase of 150 per cent between 2008 and 2009), according to the Defensoría del Pueblo (Citizen's Bureau), which was particularly related to the concessions of land and resources to private international companies in the mountains and in the Amazon (Bebbington and Humphreys Bebbington 2011). In addition, poverty levels remained very high nationwide (that is, approximately 52 per cent of the population living in poverty and around 24 per cent in extreme poverty), compare with, International Financial Institutions, ‘Is the neoliberal economic model working in Peru?' Available from: http://ifis.choike.org [accessed 10 November 2010].

4. The black water market remains a very profitable activity and is practically the only alternative for the poorest and most isolated residents. While SEDAPAL charges around S/. 0.95/m³ (up to the threshold of 25/m³/month, plus IVA), housing associations charge S/. 8.00/m³, and water tankers charge S/. 12.50/m³ (data gathered from residents in the periphery of Lima in April 2009).

5. There exists a clear uneasiness among the more orthodox neoliberals with the fact that the expansion of the water infrastructure in Lima – for example, under the APT programme – is still mainly financed by the government rather than by those that directly benefit from the investments (that is, the customers of SEDAPAL). The fundamental criticism is that, in spite of significant works built by the private sector, the bulk of the investments continue to rely on general taxation.