The World Bank and Asia Development Bank have provided budget support loans attached tomandated reforms -- including policy reforms, social safety net, power sector, health and nutrition,water, etc -- through an integrated package of adjustments. It is here that WATSAL gets its context.To really understand service privatization, look at the fact that international trade in commercialservices was worth $1.35 trillion in 1999 and keeps increasing. Service accounts for 60 percent oraround $210 billion of annual foreign direct investment, which is largely connected with privatizationof state entities.Thus, with its willingness to finance Indonesian water resources restructuring program, the WorldBank also upholds privatization of water resources. This, surely, also happens in other servicesectors in various parts of the world.It is an irony that water corporations, backed up by such policies imposed by international financeinstitutions (IFI), are making huge profits amidst water scarcity. Scarcity of resources andenvironmental degradation is often perceived as an investment and business opportunity bycorporations.In water resources management, the core issue lies in the fact that water is turned into a commodity.This contradicts various UN covenants and international agreements that view access to water as afundamental human right. These covenants even stipulate state obligations to ensure that all citizenshave access to water.But the World Bank stresses that public institutions have failed in handling this business. Poor qualityand low reliability of service have reduced consumers' willingness to pay fees for the service, leadingto lower operational funds and further deterioration in public service including water.And the Bank always contrasts all this with the performance of the private sector, described as beingcapable of providing an efficient service as well as large financing and investment funds. Thus theBank asserts that the private sector will have to be increasingly involved in water resourcesmanagement through, concessions, management contracts and private ownership, etc.Last but not least, the Bank is also confident that it is now the time for full-cost recovery, to smoothen"subsidy abolition" and institutionalization of water property rights or business lease rights, as writtenby researcher Henry Heyneardhi.And this is precisely the most serious flaw.First, as the bill suggests, water resources are managed, assuming that water is an economiccommodity. The idea is rooted in the Dublin Principle, an outcome of the 1992 International DublinConference on Water and Environment which resolved that "water has an economic value in all itscompeting uses and should be perceived as an economic good."The ADB, in its 2002 policy paper on water, added the need to "underlie all efforts for rational waterresources management". The principle made sure that access to water was to be organizedaccording to market mechanism. Yet, actually water is common property (not to be confused with"collective ownership") instead of an individual asset. Water is thus a social object for everybody anddoes not belong to anybody.Second, it seems that "full-cost recovery" is a catch-all phrase required to "get prices right" and thebasis of a market-demand driven approach to the distribution of water resources. Yet such anapproach to allocation of water services will never lead to adequate and equal access to wateramong competing ends.Third, distribution and access to water organized around the rules of the market and profit motiveensures that only communities and individuals who can afford to pay for water services will haveaccess to safe drinking water. Privatization is hence potentially instituting a "water divided" society,reflecting the larger rich-poor divide.