Beware the economic destruction created by our water insecurity crisis

As a scientist, I have always been interested in process. From my earliest days as a small boy, I have always been highly inquisitive. As my formal education grew, so did my capacity to understand increasingly complex issues.

As a professional, I simplify complex matters to predict with reasonable accuracy. Information becomes actionable when it can be effectively used by decision-makers to avert a crisis, or successfully position a country (or company) in the most favourable future circumstances by understanding the drivers that are at work today.

It is a moot point when I say that South Africa is facing a serious water crisis. In reality, we have been on an inevitable journey towards a national-level Day Zero for decades already.

I try to add some value by going beyond the finger-pointing and the tempting retort of “I told you so”. The risk of dwelling on the past is that there is nothing we can do to fix what is already broken.

The real challenge lies in anticipating what is ahead, for this is where our combined attention needs to be. We are victims of the past, but potential masters of the future if we act wisely.

Gazing into my crystal ball, the swirling mists of the past reveal our next big challenge. Without any doubt, I see one challenge looming above all else – the growing trust deficit between government and society, like a massive unmapped reef that will sink the ship of state when we crash into it.

If we accept that a social contract exists between the citizens of the state and the government under whose authority they allow themselves to be governed, then we can start to develop a clear picture of that risk. If that government has been on a decade’s-long trajectory of declining service delivery and increasing taxation, then we can start to appreciate the nature of the challenge.

As the quality of service delivery has declined, anger and frustration has increased, so government in general has adopted what I call a 3D Strategy.

The first step is to deny that a problem exists. The second step is to deflect ownership of that problem on to somebody else. The third step is a last resort when denial and deflection are no longer an option, so demonisation of the messenger takes place.

Deny – Deflect – Demonise is what the government has been doing for decades. This has created a new problem that will soon become an impediment to the very solutions that are needed to avoid a Day Zero in all the major metros, irrespective of where they are located.

In my professional opinion, the 3D Strategy has become so corrosive that it is destroying the social contract that gives government the right to levy taxes and deliver services on behalf of those being governed.

When that social contract fails, then the fabric of society disintegrates, and people resort to self-help. That self-help comes in a range of shapes and sizes, so it is important that we recognise all of them as part of the same monolith.

Let us give this monolithic thing a name for convenience. Let us call it the trust deficit, so we can better understand why it is important that it be fixed.    

What is the range of self-help of which I speak? We are seeing boreholes being drilled as if there is no tomorrow. Recently, a driller damaged the Gautrain by placing the rig in an inappropriate position, so it penetrated a tunnel. There are consequences that are not yet apparent, and the Borehole Water Association is doing damage control.

We are also seeing increasing talk of public-private partnerships (PPPs). In fact, it is increasingly apparent that the state is unable to deliver basic services, which is the very reason that infrastructure has collapsed in the first place.

We also know that the cost of repairing the water infrastructure alone is around R1-trillion, which the fiscus is unable to raise from taxes. This is what the current VAT increase debacle is all about. We need to understand how this death spiral works if we are going to escape it.

Stated simply, failing water (and other) infrastructure means that businesses are increasingly unable to function. This distresses the economy, which is unable to employ people, and a combination of these forces also means that the taxes flowing into the fiscus are on a declining trajectory.

This, in turn, means that the government is unable to fund the very infrastructure upgrades that are needed to enable the economy to once again create jobs and increase the flow of taxes that sustain the state.

In short, we are caught in the death spiral of a vicious cycle that we cannot break without a major change in strategy. It is at this very point that we confront the national water insecurity dilemma.

The one horn of the dilemma is the proven inability of the state to self-correct. This means that what the state should be doing, such as the provision of reliable water and sanitation services, it is simply incapable of actually doing, so if we default to this option, we are unlikely to see any improvement in the foreseeable future.

The result of this option is continued economic stagnation, growing unemployment, rising cost of living and the ravages of inflation. Left alone, this will end in revolution.

The other horn of the dilemma is the PPP route, being pioneered by Rand Water and centred on the implementation of special-purpose vehicles (SPVs), which assumes that the state can self-correct.

This means that it will continue to fulfil its rightful role under the social contract that converts taxes into services provided in the best public interest, at the lowest possible cost, and with the greatest level of reliability.

The result of this option will be rejuvenated economic growth, an increase in employment opportunities as businesses start to hire people again, stable costs of living and protection from inflation.

Either of these two horns of the central national water insecurity dilemma is problematic, and each has its own benefits and risks, so what is it to be?

Sadly, the erosion of public trust is now creating a new phenomenon. Society has been brutalised by the toxic trust deficit, and it is increasingly sceptical and suspicious of anything the government does.

We are now seeing a new word enter the public discourse – “enemedia” – where the mainstream media is equated to the enemy. This sterilises any messages of hope that challenge the power of the alternative media, which is now more trusted by the masses.

Associated with this is the emergence of increasingly organised resistance to PPPs and SPVs. We currently see this playing out in the groundswell of opposition to the Faure Direct Water Reuse Scheme that is designed to provide Cape Town with water security.

My prediction is that we will increasingly see this play out wherever new SPVs are being considered. Left unmanaged, the sophistication of this resistance will only increase, along with the economic destruction created by our national water insecurity dilemma.

My message to all government decision-making executives is to reconsider their indiscriminate use of the 3D Strategy, because the resulting trust deficit will eventually undermine their own efforts to self-correct.  

My message to society is to be aware of activism that is blind to the real risk of choosing the wrong horn of the national water insecurity dilemma. DM