Saturday, April 25, 2015

On the Southwest American Drought: Looking to China

Lake Mead, a reservoir outside Las Vegas serving 40 million people in Nevada, Arizona, Southern California, and Northern Mexico, was at its lowest level (i.e., below 1,080 feet) in April 2015 since it was formed with the Hoover Dam.[1] Particularly for California, whose snow-melt would again be minimal, the continued drought was quickly turning dire. With a surplus of rain-water coming down on western Washington and Oregon, the U.S. Government could have dusted off FDR’s Civilian Conservation Corps (CCC) to activate the long-term unemployed (and the imprisoned) to assist the Army’s Corps of Engineers in constructing aqueducts and digging canals that would hook up with the extant canals running from the delta area north of Sacramento to southern California. It is not as though the Oregonians and Washingtonians would miss the water, and the Californian farmers could see to it that their best produce finds itself up north. Yet as easy as such a large-scale governmental project seems, the devil is in the details, which can actually be rather huge in themselves. China provides a useful case study that the Americans could, conceivably at least, benefit from—should they endeavor on a truly large-scale governmental project.

By April 2015, the Chinese central government had spent 308 billion yuan ($50 billion) on the South-North Water Transfer Project.[2] It’s sheer size is not for the faint-at-heart. The project “takes water from the Yangtze River and channels it across a half-dozen provinces and more than 1,700 culverts, aqueducts and other man-made structures.”[3] More than 400,000 people had been relocated. In spite of all of this effort, many towns in need of the water were continuing to pump up ground-water—causing the ground to sink even more. The shortage of water in Northern China had prompted cities to over-rely on their respective wells. Unfortunately, getting water that way was cheaper for the cities than from the transferred water via the project’s massive canals. Adding still more incentive to stay with the status quo, the cities in need of water had to build related infrastructure, including pumping stations and processing plants, in order to have access to the water from the project. Leaving this last bit to the city governments was not the smartest move by the project’s planners.

The lapse is particularly sad, given all the credit the Chinese government is due for having thought of and embarked on such a large-scale project capable of solving such a potentially devastating problem. At the time, Californians would have been aware of just how dire a water-shortage can be, yet the government of California was merely constructing more reserve-basins and ordering municipal water utilities to cut water-use by 25 percent. With all the surplus rain-water along the coast and western mountain-range in Oregon and Washington, why the U.S. Government had not stepped in to construct a massive Northwest system of massive canals taking the surfeit runoff to California is baffling to me.

The academic literature of international political economy may provide an answer. To explain why the Asian countries like Taiwan and South Korean have developed economically whereas Latin-American countries such as Panama have not, the literature distinguishes between strong- and weak-state countries. A strong state, or government, is able to resist pressure from society to consume governmental revenue. A strong state, for example, can say no to corporate welfare, for example—not just to spending more tax revenue on food-stamps!—whereas a weak state succumbs to corporate and other lobbying. The U.S. Government is a weak state because of the influence that defense-contractors, Wall Street, and corporate America have on members of Congress and the president. Put another way, after having spent roughly $4 trillion on the U.S. military in Afghanistan and Iraq, and trillions more in fiscal and monetary policy in the wake of the financial crisis of 2008, spending tens of billions more on a water-transport system linking the northwest with the southwest (including Arizona) was not even on the radar screen.

The difference here between China and the United States is not merely one of priorities; the Chinese government is stronger with respect to fending off powerful interests in China who want money from the government. The difference, in other words, is not between democracy and dictatorship; rather, plutocracy is a weak-state form of government (e.g., the U.S.). To be sure, dictatorship brings with it a myriad of problems, but that of being a weak-state incapable of large-scale infrastructure projects is not one of them. In the literature, democracy is associated with weak-states in Latin America—the electorate being able to vote for candidates promising more consumption of government resources at the expense of the sort of investment in infrastructure that could bring in foreign-direct-investment (i.e., multinational corporations). Similarly, we can add plutocracy to the weak-state side of the ledger. Whereas plutocracy is inherently weak from the standpoint of a government being able to resist pressure from private wealth, democracy is not so, as a citizenry can vote in candidates who campaign on resisting corporate welfare, whether to Wall Street or Lockheed Martin.

In short, for all the credit that the Chinese central government deserves in having gotten the huge canals built—and why were not the governments of California, Oregon, Washington, and the U.S. talking in similar terms?—a mammoth project must be designed beforehand with everything covered—from the intake of the water to the flow into municipal pipes. Otherwise, the entire project can falter. “Water, water all around, but not a drop to drink” could otherwise apply. Were the U.S. Government to contemplate such a massive project to solve the water-shortage in the Southwest, the planning should include an analysis of the financial incentives and disincentives that every actor along the process, including at the end-point, would have. Water flows downhill, and the incentives must likewise. Otherwise, a dam could pop up that keeps any of the water from reaching the end-users.

[1] Reuters, “Lake Mead on Track for Record Low Water Level Amid Drought,” The Huffington Post, April 24, 2015.
[2] Te-Ping Chen, “China Water Project Leaves Some Cities Dry,” The New York Times, April 24, 2015.
[3] Ibid.