Beating the water crisis
sets out themes for a new millennium in
strategic water resources management
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
- 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
- Supports innovative and participatory approaches.
- Focuses on actions that improve the lives of people and the quality of
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
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.
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
- 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
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
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
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
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
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.