Global Water Challenges: The View of the World Bank

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Global Water Challenges The View of the World
Bank

• Chapel Hill
• March 4 2005

www.worldbank.org/water
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What I would like to discuss with you today .

1. Reflections on some changes in the water and
   sanitation sector in the developing world in the
   past decade
2. A view of some of the broader water resource
   challenges in developing countries
3. Some thoughts on the role a great university
   might play in addressing these challenges

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Part 1 Some changes in water and sanitation in
the past decade
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The numbers...

• Water supply -- about 1 billion dont have access
  to an adequate supply of drinking water

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• Sanitation and sewerage
• 2 billion people dont have facilities....

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Huge costs...

• Economic
• Large numbers of the poor rely on vendors

• They pay 10 times as much for a cubic meter of
  often-dirty water.....

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Huge social costs...

• Health..... 3 million children die each year
  from water relateddiseases

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Huge costs for the environment...
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How do things improve?A personal observation of
a place where there was dramatic improvement in
water and sanitation coverage (and health)
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Fatepur, Bangladesh, 1976Lives of utter misery
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Fatepur, 1998
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A simple and astonishing change

• Economic growth (much induced by better water
  management) led to
• Large increase in demand for improved water and
  sanitation
• Greatly improved coverage and (due to water and
  sanitation and other things)
• Life expectancy of women
• From 47 years in 1976
• To 67 years in 1998

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There have been similar successes in some other
parts of the world
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The glass half full
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This has been a tremendous achievement

• Every day for the last 10 years, huge numbers
  of people have gained access to improved
  services
• Drinking water about 250,000 every day
• Sanitation about 205,000 every day

But population growth is about 215,000 a day

• And thus there has been little net progress, and
  there are still billions without service
• over 1 billion for drinking water, and
• about 2.5 billion for sanitation

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Economic growth critical for improving wastewater
quality
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More generally.There is a lot that can be done
better by being smarter but it is also clear
that progress is happening and sustainable where
there is economic growth
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It is economic growth which reduces poverty.
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The news on economic growth is mixed
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So

• Sustained economic growth in East and South Asia
  is underpinning improvements in global coverage
• But Africa is a big worry..

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MAIN MESSAGE Development of innovative, low-cost
approaches helps, but it is economic growth which
- in Fatepur and globally is improving and will
improve watsan coverage
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Part 2 Water resource challenges in developing
countries

1. A World Bank perspective of the challenges facing
   developing countries
2. The evolving role of the World Bank

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A new World Bank Water Resources Strategy

• PROCESS
• The method for developing a new World Bank
  Strategy in a vital and contentious area

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1993 World Bank Policy Paper which set out the
Banks commitment to Dublin-type principles for
WRM
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The consultation process

• Extensive internal and external consultations
  over 3 year period
• 22 external consultations

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Multistakeholder Consultations 1999/2000.
Intl waters
Washington
Yemen
Philippines
Nigeria
Brazil
Main question How can the World Bank be a
better partner?
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Consultations with governments on the World
Commission on Dams Report.
Nepal
Jordan
China
Laos
Ethiopia
Thailand
Brazil
A focus What can and should the World Bank be
doing on high-risk/high
reward water infrastructure?
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Consultations on the Strategy Draft (2002)
Donors
Private Sector
NGOs
Yemen
Philippines
Nigeria
Brazil
The focus Reactions and suggestions on the
draft Strategy
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The Brasilia consultation.
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The consultation process

• (Unprecedented) total of 5 meetings of the World
  Banks Board (representatives of the 180
  countries who own this financial cooperative)

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The Story Line

• PROCESS
• The method for developing this Strategy
• SUBSTANCE
• Water management and development are vital for
  growth and poverty reduction
• Better water management is essential
• Most developing countries also need investment in
  priority water infrastructure
• Solutions need to be tailored to particular
  circumstances

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How Water Interventions Affect Poverty
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Targeted irrigation, energy and water supply and
sanitation services for the poor are fundamental
to poverty reduction.
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How Water Interventions Affect Poverty
resource
development
management
affecting
water...
service
delivery
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Most water utilities in developing countries
perform very poorly
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Fela Kuti
If I say there is no water and no
electricity Thats old news.
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And the poor are always at the end of the line,
paying 10 times what those with access pay for a
gallon of water
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What water utility reform has meant for the poor
in Buenos Aires
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• Today in Argentina, lots of challenges. But
  major achievements for the poor

• Approximately 1.5 million additional poor people
  now have access to piped water and 600,000 access
  to sewerage

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How Water Interventions Affect Poverty
resource
development
management
affecting
water...
service
delivery
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UP Sodic Lands Project
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A brilliant integration of women on the credit
side
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Economic Impact of UP Sodic Lands Project
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How Water Interventions Affect Poverty
resource
development
management
affecting
water...
service
delivery
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Investments in water resources development and
management have broad, region-wide impacts

• Large economic and employment multipliers
• 2 or more in wide variety of settings
• Tamil Nadu in India
• Muda Basin in Malaysia
• Sao Francisco Basin in Brazil
• Columbia Basin in US
• New South Wales in Australia

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For example The Bhakra-Beas complex in India
Irrigated 7 million hectares and provided 2800 mw
of power
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A major recent World Bank retrospective
assessment of the economic impact

• The indirect benefits were as large as the direct
  power and irrigation benefits

• Landless laborers benefited (proportionately)
  more that landowners
• and this does not include the million seasonal
  workers who migrate from Bihar to Punjab and
  Haryana each year.

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But what are the NET effects on the poor -- the
example of India?
Net effect Unirrigated districts (lt 10 of
cropped area irrigated) --- 69 below poverty
line Irrigated districts (gt 50 of cropped area
irrigated) --- 26 below poverty line
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• Many ramifications.

• Returns to five years of education in India
• 32 in irrigated districts
• 0 in unirrigated districts

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Those who provide water are gods
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• THE SPECIAL CASE
• OF POOR,
• MOUNTAINOUS
• COUNTRIES

• Those with water and gravity next to large
  markets
• Nepal, Bhutan, Lesotho, Laos, Uganda
• Nepal and US have about the same hydro potential
• US has developed 70,000 mw
• Nepal has developed 300 mw
• Potential of huge economic benefits from
  royalties (5 GNP)
• The great challenges
• Can only be done if risks are shared between the
  government, the private sector and multilateral
  development banks
• Can this be done in a way that is socially and
  environmentally responsible and realistic?
• Can development of natural resources be a boon
  (the Botswana path) ?
• Not a bane (the Angola model)?

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The important case of peace and security
dividends from sharing benefits from
international waters
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..260 river basins shared by 2 nations
After Wolf
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Cooperative arrangements for generating and
sharing benefits from international rivers can
have major security and development payoffs
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The Indus Irrigation (1947)
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The Indus - The Treaty (1960)
The glue behind the Treaty major dams
(Tarbela and Mangla in Pakistan, Bhakra and Pong
in India), canals and inter-basin transfers.
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Tarbela Dam in Pakistan
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Another international benefit-sharing endeavour,
with major potential security and development
payoffs. in the early days on the Nile
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• MAIN CONCLUSIONS
• All four types (not just Type 4) are important
  for poverty reduction

• The World Bank, like countries, needs to be
  engaged in all four quadrants in a coherent and
  mutually-reinforcing program

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The Story Line

• PROCESS
• The method for developing this Strategy
• SUBSTANCE
• Water management and development are vital for
  growth and poverty reduction
• Better water management AND development are
  essential
• Better management is essential and difficult
• Most developing countries also need investment in
  priority water infrastructure
• Solutions need to be tailored to particular
  circumstances

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Morocco as an example
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Massive investments in water infrastructure have
provided a platform for Moroccos economic growth
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The development phase is largely over in Morocco
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The new challenges in Morocco are primarily
management

• Reducing mining of groundwater in Souss Basin and
  elsewhere.

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Wastewater treatment and water quality management
in the Sebou Basin (and elsewhere)
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Severe water pollution in many parts of the Sebou
Basin
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With major economic and health impacts downstream
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QED At an earlier time Moroccos challenges were
primarily type 1 now they are largely of type
3
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The Story Line

• PROCESS
• The method for developing this Strategy
• SUBSTANCE
• Water management and development are vital for
  growth and poverty reduction
• Better water management is essential
• Most developing countries also need investment in
  priority water infrastructure
• Solutions need to be tailored to particular
  circumstances

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• There is a global consensus on the principles
  which govern sound water management

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The Dublin Principles

• The ecological principle
• holistic (including environment), comprehensive,
  inter-sectoral...

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But what about translating principles into
practice?
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• insufficient progress with integrating
  environmental and sectoral policies,
• prices seldom reflect full economic and
  environmental costs,
• demand management policies still little
  developed,
• agricultural water use still heavily subsidized
• the progress achieved to date is the result of
  many years of effort.

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And in developing countries?

• Countries are doing much better in policy than in
  practice

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What does this mean for peoples lives?
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• Minister of Finance, India
• India facing a growing series of little civil
  wars over water rights
• Minister of Water Resources Dasmunshi
• I am not the Minister of Water Resources but the
  Minister of Water Conflicts

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Little civil wars in India

1. Between states
2. Between different users in a basin
3. Between communities and the State
4. Between farmers and the city
5. Between farmers within command areas.
6. Between farmers and the environment

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Conflicts between farmers and the environment at
Indias most important bird sanctuary
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Irrigation/nature trades?

• If rights had been clearly established for both
  the farmers and the Sanctuary there would have
  been no issue
• Now the World Bank is working with the Global
  Environment Facility
• To formalize the water rights of the farmers
• To set up a trust fund to make forebearance
  payments to compensate farmers for release of
  water for the National Park

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So what are the lessons on the crucial issue of
implementation?
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The natural, economic and political challenges
facing developing countries vary enormously..
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Given such heterogeneity (even within regions and
countries) are there any general lessons?
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We DO see some general lessons on what must be
done to translate principles into practice.
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Initiate reform where there is a powerful
need, and demonstrated demand, for change

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Involve those affected, and address their
concerns with effective, understandable
information

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Develop a sequenced, prioritized list of reforms