The main idea of the article liquid assets is that water is a valuable resource and policies in different countries that govern water resource distribution and sharing play a vital role in proper water usage. Different strategies can be applied to enable equitable and fair access to the precious commodity (The Economist).
Advantages of treating water as a commodity include it generates revenue that authorities can use to improve the water supply to other areas and maintain the supply at a steady rate. With proper structures in place, water trading can become an economic activity. Disadvantage of treating water as a commodity include it becomes difficult to access for poor people or those who cannot afford the set prices and they have to result to alternative means for example in South Africa women who could not afford the commodity had to walk for seven hours to obtain water from the river (The Economist).
The two governments of Chile and South Africa could have avoided this by taking responsibility for water pricing and structure it in such a way that poor people also benefit (The Economist).
Australia has implemented a clear separation between water rights and property rights, and this means that water belongs to the crown and the government grants access rights. There was also an introduction of a trading system which included computerized water exchanges plus there was the trading of water between farmers and big cities. Australia has also achieved a 100% water metering system which has enabled it to charge by volume (The Economist).
Adelaide built this plant because the water that is in that area was saline and it required water desalinized for it to become usable and to meet the set water standards. The new plant will also help in water distribution, and more fresh water will be available (The Economist).
The disadvantage of this system is that people who have land which doesn't have water reserves are disadvantaged and can only buy or trade from those who have, and they might end up being exploited. The system also makes it hard for authorities to make the water resource distribution impossible since they have to acquire it from individuals who might not want to share with others or the land owners might propose strict terms for the authorities to receive it and distribute it to others (The Economist).
Works cited
The Economist. ‘Liquid Assets.’ The Economist Newspaper and the Economist Group. 2003. Print.
