Chilean Town Withers in Free Market for Water

During the past four decades here in Quillagua, a town in the record books as the driest place on earth, residents have sometimes seen glimpses of raindrops above the foothills in the distance. They never reach the ground, evaporating like a mirage while still in the air.

What the town did have was a river, feeding an oasis in the Atacama desert. But mining companies have polluted and bought up so much of the water, residents say, that for months each year the river is little more than a trickle — and an unusable one at that.

Quillagua is among many small towns that are being swallowed up in the country’s intensifying water wars. Nowhere is the system for buying and selling water more permissive than here in Chile, experts say, where water rights are private property, not a public resource, and can be traded like commodities with little government oversight or safeguards for the environment.

Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights in a huge region in the south, causing an uproar. In the north, agricultural producers are competing with mining companies to siphon off rivers and tap scarce water supplies, leaving towns like this one bone dry and withering.

“Everything, it seems, is against us,” said Bartolomé Vicentelo, 79, who once grew crops and fished for shrimp in the Loa River that fed Quillagua.

The population is about a fifth what it was less than two decades ago; so many people have left that he is one of only 120 people still here.

Some economists have hailed Chile’s water rights trading system, which was established in 1981 during the military dictatorship, as a model of free-market efficiency that allocates water to its highest economic use.

But other academics and environmentalists argue that Chile’s system is unsustainable because it promotes speculation, endangers the environment and allows smaller interests to be muscled out by powerful forces, like Chile’s mining industry.

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