4. Blockchain: a Feasible Medium between Privatisation and Government Control ?

In the last blog we looked at the role of the government in water development, specifically through the case study of the Sidi Abdellah Dam in Morocco. The topic of water privatisation was briefly touched on; in Morocco although water is state-run, the construction of water infrastructure projects are contracted out to private companies. In this (and any water development endeavour) the effectiveness in either both or one of governmental and private corporations involvement is questionable. One example in the case of the Sidi Abdellah Dam was the bankruptcy of construction company EMT in 2013, causing the dams’ construction to be halted until new contracts could be signed to SGMT. 

During the last 30 years, African development policy has seen a shift towards the privatisation of water management and development. The shift came as a reaction to the widespread distrust and dissatisfaction with highly centralised governments. Initially the focus was on democratic decentralisation, whereby transfer of power to a decentralised version of admin systems led to the uptake of privatisation or public-private partnerships on account of the difficulties in controlling the new decentralised system (Golooba-Mutebi, 2012). According to Bayliss (2003), the uptake of privatisation has neither guaranteed enhanced water infrastructure, nor guaranteed widespread water affordability and isn't proven to reduce unnecessary political involvement. Conversely, privatisation demands that the project hold potential sufficient profit margin to be attractive to foreign investment and achieving affordable water for all often requires government subsidisation (though this isn't always obtainable) or that sufficient competition is present so that a monopoly is not enabled- where this is the case then government regulation is required (though if the government urgently requires foreign investment, regulations are likely to be lenient in nature). Bayliss summarises that the outcome of privatisation depends on the original state of circumstances before the privatisation happened; if a country’s political and financial situation is far from optimal, it will stay this way and be only exaggerated with privatisation. 

Across the continent, corporations’ profit margins are expanding yet many people still cannot access basic water utilities… So what next? Africa has recently seen a wave in uptake of web 3.0 and decentralised technologies. In many places the dictatorial and crumbling infrastructure left behind by colonising forces creates the perfect window of opportunity for implementing blockchain technologies, as opposed to ‘First world countries’ where uptake would require deconstruction of existing structures (Koffman, 2019). Into this space comes blockchain; blockchain is essentially a distributed asset database which can be shared across a network of multiple geographies. All those within the network have access to an identical copy of the ledger (a ledger is one node of information within the database), where any changes made to the ledger are reflected in all participants’ copies and no past versions of the ledger can be altered by any participant. (UK Government Chief Scientific Advisor, 2016). Thus the key features of the blockchain; transparency and decentralisation are statements of proof to its authenticity and it is an enabling tool for regaining citizens’ trust in institutions and governments. Though blockchain’s major current usage is within financial systems, its ability to improve transparency especially between two or more parties depicts its potential within issues such as infrastructure, water trading, public services and more. 

Figure 1: diagram depicting the basic process of creating a blockchain. (Rosic, 2019)

Tunisia is one example where blockchain could have high capacity for potential. In 2015 Tunisia became the first country in the world to issue its national currency via an application operating through blockchain, the change came about as a response to the Central Bank of Tunisia’s requirement for an innovative solution in halting the culture of cash transactions which hinder banking development and promote illegal trade (Laghmari, 2019).

Tunisia is a semi-arid region with water resources characterised by erratic rainfall and high seasonal and temporal variability, making equal distribution of water resources across the country often difficult, given rainfall imbalances between North and South. In the Northern and Greater Tunis regions, higher rainfall leads to a larger share of surface water available, of which some is fed to the Southern region whereby groundwater resources are generally relied upon (Bouchrika.A et al, 2015). Water management in Tunisia has been highly centralised since 1947 after the creation of the National Water Board and although the presence of smaller governmental bodies to some degree enable decentralisation, these bodies have little responsibility for actually setting policies or delivering and regulating services. Given the high variation of water availability throughout the country, moves towards further decentralisation have been discussed. However such moves are all within the already existing and questionable framework of giving greater responsibility and autonomy to local authorities and increasing the number of public-private partnerships (OECD, 2014). As evidenced in above and previous blog discussions, the uptake of privatisation of water management and forced community management practices may not deliver the results that Tunisian authorities desire for water management sustainability. 

Furthermore, widespread corruption within the country was cited as a major reason for the recent 2011 revolution in Tunisia with annual corruption costs representing 54% of GDP. A report by the OECD displays population unease with the existing government even after governmental reforms; 67% of those surveyed though corruption has increased since 2017, and 59% believe corruption could be fought against yet were scared to do so for fear of retaliation (OECD, 2019). Whereby the state contracts out services to SME’s, a total of 25% of such public contracts are said to be lost of corruption. Summarily, although the Tunisian government aims toward national reform it can be seen that age-old issues of trust and opacity are ever-present. 

Zeitoun (2011) prescribes key shortfalls of global water policy issues as being a lack of integration between biophysical and social processes of water resource and uses, as well as lack of communication between actors (e.g. departments within governments, and from private to public organisations). In the above I have attempted to demonstrate how if a decentralised technology such as blockchain were to be implemented in water management processes by using the example of Tunisia, issues of opacity, collaboration, corruption, trust, could potentially be discarded. In addition, I pose this idea not only because it could aid with the disadvantages of both private and government-held water management, but the technology also works as a medium between political extremes. Blockchain could be a tool for citizens to regain trust in governments and private corporations; the technology makes corruption and hiding of information virtually impossible, thus disintegrating the Manichean narrative between state and people.