Freshwater Scarcity and the Theory of Social Adaptive Capacity: Privatization and the Role of the Multilateral Development Banks and Corporations in Malaysia

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This paper is a discussion of the presence of TNCs, and development banks and corporations in managing and distributing scarce freshwater resources in Malaysia. The discussion centers around how these entities might have or have not been able to alleviate the problem of water scarcity. The discourse in this work focuses on freshwater scarcity and the theory of social adaptive capacity in Malaysia, amidst the privatization process which is manifested by the presence of transnational water corporations and multinational development banks. How successful are they in enabling society to adapt to growing water scarcity? (1) Through what means are the TNCs and banks managing the high demand for freshwater in Malaysia? What aspects of the water industry are the TNCs and banks focusing on? Are the TNCs and banks facilitating adequate water availability in both urban and rural areas? By asking these questions, we attempt to review the concept of social adaptive capacity of Malaysian society in the context of freshwater scarcity and in the presence of the privatization process of the water industry.

The discussion in this paper is situated within the framework of the social adaptive capacity theory. This means that a majority of states do not go to war over scarce water resources but instead cooperate and seek settlements to reflect their long term interests. Broadly defined, adaptation refers to the genetic or behavioral characteristics which enable organisms or systems to cope with environmental changes, such as drought and water scarcity. (2) Even though TNCs, banks and trade regimes are getting more involved in the water issues, it has not come to the point of conflict in Malaysia. The social adaptation capacity posits that its essence is self-restraint, moderation, comrpomise and peace. The theory accepts the inevitability of the trade in water resources, and many developing and poorer countries see that the central concern is the liberty of the individual; people see the state as a necessary part of preserving liberty and that the state must always be the 'servant' of the collective will. The social adaptation capacity theory is a framework under which society reconciles order (security) with justice (equality). Thus, water TNCs and corporations have an important task at hand, i.e. to perform their duties within the framework of social adaptation capacity. By discussing the role of TNCs and corporations in the business of water, this theory should guide stakeholders to consider affordable operation costs (extraction of water), efficient delivery to households and businesses and equal distribution of clean water to consumers.

Adaptations are considered responses to risks associated with the interaction of environmental hazards such as water scarcity, and human vulnerability or social adaptive capacity. This article hypothesizes that the social adaptive capacity theory will ease water stress despite there being a combination of reduced government control, the growing involvement of TNCs and development banks and privatization, whose aims are to primarily maximize profits ad secondarily to alleviate water stress. The concept of the social adaptive capacity theory can be summarized with the following quote: "For human societies, adaptive capacity can be defined as the ability to plan, facilitate, and implement measures to adapt to climate change. Factors that determine adaptive capacity may include level of economic wealth and well-being, availability of appropriate technology, extent of information and skills, provision of sufficient infrastructure, effectiveness of institutions, political stability, cultural cohesiveness and social equity." (3)

However, capacity for what? The most accurate approach is the scientific capacity for understanding earth sciences, and social and management sciences, and management capacity through adaptation measures and adaptation policy. …