Beating the water crisis



Beating the water crisis



ISMAIL SERAGELDIN

sets out themes for a new millennium in
strategic water resources management





village woman carrying water Few issues have achieved the same pre-eminence as water in the debate over how to manage the world's finite natural resources. Water pervades society and is critical for long-term economic development, human health and social welfare and environmental sustainability.

Yet more than a billion people do not have access to adequate supplies of safe water and 1.7 billion people do not have adequate sanitation. The poor pay the most for water and suffer the greatest both from impaired health and from lost economic opportunities. Contaminated water causes millions of preventable deaths every year, especially among children. Effective water resources management must help alleviate poverty, rather than making the poor the victims of bad decisions and policies.

Emerging trends indicate that we are now approaching a 'water crisis' in several regions - most notably the Middle East and North Africa where per capita water availability is presently 1,247 cubic metres per year, one of the lowest in the world, compared to 18,742 cubic metres in North America and 23,103 in Latin America. The main constraint to agricultural production in many areas in the near future will be the availability of water, not land.

In many countries, water shortages stem from inefficient use, degradation of the available water by pollution and the unsustainable use of groundwater resources. Massive urban and industrial growth is creating unprecedented demands, often at the expense of agriculture, aquatic ecosystems and the rural poor. Land degradation due to poor land use is exacerbating soil erosion and sediment transport in downstream areas, and affecting coastal ecosystems.

We must adopt a proactive approach. Current trends demonstrate that the reactive approaches of the past cannot continue. Access to safe water and sanitation remains a major challenge in both urban and rural areas: at present, 40 to 60 per cent of water used by utilities is lost to leakage, theft and poor accounting. Health risks will continue to be a major concern, especially in rapidly growing urban areas where population growth and the rise of megacities will further constrain the availability of water. In 1950, there were less than 100 cities with a population in excess of 1 million; by 2025, that number is expected to rise to 650. As urban populations grow, water use will need to shift from agriculture to municipal and industrial uses, making decisions about allocating between different sectors difficult.

We cannot continue along the present path where water resources management is characterized by policies that are unsustainable from any perspective - economic, social or environmental. There are a multitude of problems, but they all stem from four principal failures:

- The refusal to treat water as an economic good.

- Excessive reliance on the 'government' for water and wastewater services.

- Fragmented management of water between sectors and institutions, with little regard for conflicts or complementarities between social, economic and environmental objectives.

- Inadequate recognition of the health and environmental concerns associated with current practices.

Instead we must adopt a new approach to water resources management in the new millennium so as to overcome these failures, reduce poverty and conserve the environment - all within the framework of sustainable development. This:

- Addresses quantity and quality concerns through an integrated approach.

- Integrally links land-use management with sustainable water management.

- Recognizes freshwater, coastal and marine environments as a management continuum, with significant implications for strategy, planning, management and investment actions.

- Recognizes water as an economic good and promotes cost-effective interventions.

- Supports innovative and participatory approaches.

- Focuses on actions that improve the lives of people and the quality of their environment.

Adopting this approach will make the management of river basins, coastal zones and the marine environment complementary. These systems must be viewed as intimately interlinked and a much broader range of 'downstream effects' from human interventions and development activities must be recognized. Concerns about water quantity and quality - historically treated as separate - must now be seen as a global issue that requires a unified management approach.

The new approach will require four essential elements for action:

- Strategies, which must move from segmented to comprehensive.

- Interventions, which must move from curative to preventive.

- Investments, which must move from incremental to strategic.

- Innovations, which must move from piloting to mainstream.

STRATEGIES. Water issues need to be treated in a systemic way. We must stop managing water sectorally by its separate uses, and instead develop a comprehensive framework for water resources management. Coordination between different sectoral users is critical if this is to be sustainable. Land use and water policies and management need to be linked, and physical and institutional infrastructures must be complementary.

INTERVENTIONS. The new approach emphasizes preventive rather than curative interventions to stop problems occurring in the first place, and allows resources to be applied effectively. It also promotes sustainable use of diverse and fragile resources, and minimizes the need for expensive remediation, mitigation and restoration measures. It cost an estimated $300 million to move Shanghai's water intake 40 kilometres, after the quality of the river around the city deteriorated. Similarly, the estimated costs of restoring the Aral Sea are a prohibitive $1 billion for rehabilitating salinized land, and $100 million for partially restoring wetlands.

Competing sectoral demands for increasingly limited water result in regional, national and local conflicts: the most recent example being the dispute over the sharing of Cauvery River water in India. Transboundary water pollution is an important cause of conflict, because of the dramatic impact of contamination on the usability of water.

boy washing under tap Changing the incentive structure is an important policy lever for promoting better management of scarce water resources. Policies that work with markets, not against them, should be implemented. Environmental management in developing countries should be based less on regulations than on using incentives to encourage efficiency and reduce damage. The prevention and abatement of industrial pollution can be highly responsive to well-structured incentives, offering a major opportunity. Measures that emphasize prevention, and avoid 'end-of-pipe' and 'end-of-stack' solutions, should be promoted: these include adopting efficient process technology, waste minimization, recycling and resource recovery, and high operation and maintenance standards. The 'Polluter Pays Principle' and 'User Pays Principle' should be actively promoted so as to increase the commitment and performance of municipalities, industries and individual users in adopting cost-effective control measures.

INVESTMENTS must be part of long-term development strategies in both the public and private sectors and a broad range of them, both large and small, will have to be made continuously. They should be balanced between preventive measures to avoid further degradation and curative measures to rehabilitate degraded ecosystems. Another balance, between costs and benefits, must be carefully analysed in making investment decisions. Special attention should be given to ensuring that long-term environmental costs are not neglected in the desire to obtain short-term benefits. Increasing user participation in programme and project design is critically important, especially to ensure that measures to promote the use of economic incentives are internalized.

The timely implementation of environmental programmes and projects has often been constrained by problems in integrating priority concerns into national public investment plans. Areas in which private sector investment should be encouraged have not been identified. Public Investment Programmes prepared on the basis of Public Expenditure Reviews, endorsed by the World Bank, help governments by establishing clear priorities and linking them with funding from both domestic and international sources.

The private sector should be encouraged to participate in water management, because of the need to mobilize resources, improve efficiency and increase the quality of services for users. Meeting long-term priorities for improving water resources management - especially providing water and wastewater services - will require harnessing private investment to reduce the financial burden on government budgets. There are a wide range of options for this, including service contracts for operation and maintenance, concessions and varying levels of private sector ownership. Cost recovery for both the use of water resources and the provision of services is an important principle. Successful examples of private sector participation in the water sector in Latin America include: service contracts in Chile; management contracts in Mexico; lease contracts in Bolivia; concession contracts in Argentina and Chile; Build-Own-Operate-Transfer (BOOT) options in Chile and Mexico; and joint ownership in Colombia (see short piece at the end of the article).

INNOVATIONS. Effective adoption and implementation of this new approach demands changes in the principles and practices of water resources management programmes. Grants should be used strategically to promote and test pilot innovations. Measures should be taken to share and disseminate experiences effectively, so as to allow the benefits from new approaches to water management to be realized at the operational level. Pilot activities should be carefully monitored and rigorously evaluated by independent parties to provide quality control.

The World Bank's experience reinforces the importance of participatory approaches in planning and implementing projects. Planning must take place at the lowest appropriate level, be demand-based, involve stakeholders in decision-making and ensure the participation of women. The Bank has recently begun to use social assessments - which provide a framework for including social analyses and participation - as a new way of factoring the human and social dimension in the design of a number of projects and programmes, including water and sanitation projects in Azerbaijan and Uzbekistan (see short piece at end of the article).

Women, important ecosystem managers everywhere, are the primary purveyors of drinking water supply in many rural and peri-urban areas, and play a key role in promoting hygiene, sanitation and human welfare. They play a vital role in subsistence agriculture and in using forest resources for fuelwood and construction in many parts of the world, and in so doing impact on water resources. Their critical role in land use and water resources management must be recognized and enhanced to promote development and equity - and significant support should be provided to empower them as equal partners in development.

Support for civil society - a major priority for all parties involved in the development process - should result in an increased emphasis on dissemination and processes to support debate on water resources management issues. This would help create partnerships and empower people in the decision-making process, and aid local communities in formulating and implementing local action programmes. There should also be appropriate emphasis on raising awareness and developing educational materials that promote proper management of water resources.

Water scarcity and water pollution increasingly jeopardize the lives of millions of people in developing countries. The crisis will worsen unless countries improve their management of this essential and precious resource. Fortunately, an international consensus has emerged on the fundamental principles for such improvement: they were endorsed in 1992 at conferences on water and the environment in Dublin and Rio de Janeiro and included in the Beijing Declaration to mark World Water Day, 1996. Among the principles are:

- Water is a scarce resource and should be treated as both a social and an economic good.

- Water should be managed at the lowest appropriate level, using demand-based approaches and involving stakeholders, particularly women, in decision-making.

- Water should be managed within a comprehensive framework, taking cross-sectoral considerations into account.

Meeting the need for comprehensive water resources management in the future will require significant complementary policy actions, and investments in institutions and infrastructure. The Bank estimates that at least $600 billion will be required for a broad range of water-related investments world wide in the next decade. Most of this will have to be raised by the countries themselves, but $60 billion of the developing countries' needs must come from abroad and the Bank will lend $30 to $40 billion of this. The role of the private sector will be critical in meeting the financing challenge, while citizens will need to use water more efficiently and expect to pay for the real cost of this precious resource.

The World Bank, the United Nations Development Programme (UNDP) and the Swedish International Development Agency have established a Global Water Partnership (GWP) which will have four main features:

- Integrated programmes at the regional and national levels, that adopt the Dublin/Rio principles. The key to success of the Partnership will be its ability to promote and support these programmes.

- Capacity-building involving policies, institutions and people. The Partnership will help countries to improve the 'rules' governing the water sector in its broadest context, offer training and help institutions to improve the ways in which they operate and collaborate.

- Sustainable investments. The Partnership will support the preparation and testing of innovative, integrated approaches to such investments. Planning projects that deal with competing demands for water from various user groups will be a key concern.

- Global orientation for learning across frontiers. Lessons from the regional, national and local levels will be disseminated to target audiences through a variety of traditional and innovative user-friendly mechanisms.

The GWP will consolidate existing UNDP-World Bank programmes, and bring together key partners, not just from water supply and sanitation, but from irrigation, the environment and other subsectors. It will help pool resources for 'upstream' development, thereby contributing to more effective country-level programmes and projects. It will identify strategic gaps and develop tools, expertise and specialized programmes to address them. More effective use of water will result.

Participants from developing countries and the international community will plan the Partnership's work programme and mode of operation. The success of this venture - and of its objective to improve the management of water as a scarce resource - ultimately depends on the participation of key actors at all levels. We must not fail: the well-being of humanity, indeed the planet, demands cooperation.



Involving the private sector in Latin America

The World Bank is undertaking a major initiative to support private sector provision of water and wastewater services in Latin America and the Caribbean. It is being adopted successfully by countries in the region, and provides a wide range of experiences which may be transferred elsewhere. Its focus on actively disseminating practical information to national and municipal decision makers, utility managers and experts on the opportunities provided by a wide range of private sector involvement has been central to its success.

In 1993 the Government of Argentina transferred the operation of the water supply and sewerage services of the larger Buenos Aires Metropolitan area from an inefficient public company to a consortium of private foreign operators and local investors. The Government kept ownership of the assets and granted a 30-year full concession for operating, maintaining and managing the system, investing in rehabilitation and expansion works, and alleviating contamination of water resources caused by the disposal of domestic sewage. Regulation and control of the concession were accomplished through an agency established specifically for the purpose.



Asking the people in Azerbaijan

Massive water shortages in Azerbaijan's capital city led to the design of a World Bank-financed water supply project. The Bank carried out a social assessment, with local assistance, to help identify socio-economic factors that would influence the design implementation of the project and gain better understanding of its potential impacts on citizens, particularly the poor.

This confirmed that the project's objectives and priority interventions were acceptable to the intended beneficiaries, made significant contributions to the policy dialogue on key environmental issues and led to the inclusion of two components supporting water conservation: community-based household leak prevention and public education. The project also included provisions for developing a master plan for wastewater management to deal with the increased amount of water it supplied.



Ismail Serageldin is Vice President, Environmentally Sustainable Development, at the World Bank. The author would like to acknowledge with gratitude the contributions of Steven Lintner, without whom this essay would not have been completed. Comments by John Briscoe, Guy Le Moigne, Randall Purcell and Sarwat Hussain were helpful and are greatly appreciated. Any errors and shortcomings are purely my own.


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