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The Promise and Peril of Water

Fishing boat. Indonesia. Photo by Curt CarnemarkRural water pump, Ulundi, South Africa - Photo by Trevor SamsonParched soil by the White Nile. Khartoum, Sudan. Photo by Arne HoelGlacier. Chile. Photo by Curt CarnemarkWater Lily. Botswana. Photo by Curt CarnemarkMan and water buffalo in rice fields. Photo by Edwin Huffman

Water is essential to life. But, for millions in the world, water is anything but an assured means to survival and growth. It may even be a threat…

March 4, 2010

Water is so essential to life that to describe it as a key to sustainable human development may be superfluous, a self-evident cliché. But, for millions in many parts of the world, water is anything but an assured means to survival and growth. It may even be a threat, its careful management a dire necessity.

Woman with pitcher of drinking water. Burkina Faso. Photo: Curt Carnemark
Woman with water pitcher. Burkina Faso. Photo: Curt Carnemark
Upwards of 900 million people lack ready access to fresh water and have to hunt for it every day. Some 2.5 billion people, in rural communities around the world and, increasingly, in urban slums, have no safe sanitation and constantly run the risk of debilitating diseases. Every year 1.8 million people die from water-related sicknesses and floods, or famines due to crop failures and the perishing of their livestock for lack of water.

This is why the World Bank Group regards water as a priority in its development strategy, and devotes between 16% and 11% of total project financing each year to water programs.

In 2009, the Bank lent over $5.4 billion: some $4.3 billion to water supply and sanitation projects; nearly $600 million to irrigation and drainage for food production; more than $200 million for hydropower electricity generation, and nearly $300 million for flood protection and water-resource management programs.

The International Finance Corporation, the arm of the Bank geared to private-sector programs, and the Multilateral Investment Guarantee Agency, the Bank’s political-risk insurance arm, provided a further $220 million to support projects in developing countries.

High on the international agenda

The Millennium Development Goals place water at the center of progress. But the challenges are likely to grow more numerous and more complex – particularly because of the anticipated effects of global climate change. The international community will increasingly have to contend with issues stemming from desertification, sea level rise, acute water stress, droughts, and floods.

The Bank has been working in partnership with other donors and aid agencies, as well as UNICEF, the World Health Organization and the Food and Agriculture Organization’s Natural Resources Management and Environment Department to confront the growing challenges of water management.

As a result, the Bank has been examining its Water Resources Strategy, drawn up in 2003 to see whether it will achieve its goals and whether adjustments are necessary. The current strategy did consider the risks of climate change but not in combination with a food crisis, an energy crisis, and a financial crisis. The review found that the strategy remains sound, good progress has been made, but that work needs to do better on water quality, groundwater, climate change adaptation, sanitation, and information systems.

Jamal Saghir, Director of the World Bank’s Energy, Transport, and Water Department, says “30-40 years ago, water scarcity was the chief concern, but climate change and resource management are now the biggest challenges facing countries. Trans-boundary issues will become more acute; water diplomacy will become more important in the dialogue of nations – and the World Bank will have to be on top of these issues.”

Source of life, source of conflict

The biggest water challenges for the international community will stem from increasing demand for water, says Julia Bucknall, Manager of the Bank’s Water Sector. A priority for the Bank will be to strengthen the link between service provision and water resources in client countries.

Too often irrigation, urban development, and other projects requiring substantial water supplies have been implemented without sufficient concern for the insufficient resources available. The result is over-extraction of the resource, projects which don’t bring the expected economic benefits, and tension between communities over dwindling water stocks.

In Yemen, for example, the water table is declining precipitously, causing violence and migration. In northeastern China, over-extraction of aquifers for agriculture is causing subsidence with massive economic consequences to urban areas.

Nepal, water
Water tap in Kaski Nepal. Photo: Simone D. McCourtie
Climate change exacerbates human frailty; in Asia 1.6 million people depend on the Himalayan glaciers melting and replenishing ice for their seasonal water supplies. But as the glaciers melt faster, without regaining lost ice, those communities will have more water than they need, and endure floods, for perhaps 10-15 years and then face the prospect of the seasonal melts disappearing altogether, leading to mass migration and localized conflicts over land and other resources in the search for new water.

Bucknall says that more than sea-level rise, storm surge – water rushing up estuaries - is the most urgent issue to be confronted in climate change. About one-sixth of the world’s population lives in river deltas – the Mekong in Asia, Alexandria in Egypt, and in Bangladesh, for example – and these people face massive flooding and consequent displacement for years to come. “That,” she says, “is a very motivating political force.”

Cities take action

Mindful of the political fallout from such water-borne catastrophes, several low-lying cities have already begun planning contingencies. For instance, Rotterdam and London have declared large areas of land as anticipated flood zones.

Water scarcity is defined not by whether one has enough to drink but whether one has enough to grow food, Bucknall points out. While most countries have enough water to grow their own food, and even to trade surpluses, some countries, particularly in the Middle East, do not.

Man at water supply. Egypt. Photo by Ray Witlin
Man at water supply, Egypt. Photo: Ray Witlin
Egypt, for instance, imports 50% of its food. Yemen, the West Bank, and Jordan face severe shortages. In those regions, therefore, it is important for the Bank to gear its assistance towards storage and irrigation efficiencies. “It’s not only about having the water infrastructure but managing it properly,” points out Caroline van den Berg, Lead Water and Sanitation Specialist.

Globally, the World Bank is the largest external financier in water supply and sanitation, irrigation and drainage, river basin management, trans-boundary water programs, and other water-related sectors. It provides strong advisory and analytical support to developing countries. As such, its strategic role must be targeted to what it does best.

The World Bank is most effective in water supply and sanitation projects; mobilizing grant funding, building country capacity and financing basic sanitation, and coordinating development-partner assistance to poverty-stricken communities. It can also leverage its expertise and influence to promote public-private partnerships; improve governance of water institutions; scale up water investments in agriculture and hydro-electric power while preserving balanced water-use, and develop “bankable” models for basic sanitation.

Given the growing scale of the water challenge, many believe the Bank should avoid being caught up in programs in which it is least effective – such as small, fragmented projects, loan conditionality aimed at water reforms, or projects without stakeholder participation. The Bank’s Independent Evaluation Group found in a recent review of the Water Sector that the overall quality of the sector’s work had improved to above average of the Bank in general, especially in Africa. It found, however, that more needed to be done on quality, monitoring, and sanitation services.

The question of water cost is a hot political topic. “There is definitely a lot more awareness that water has a price and a value, and that customers have to pay for what they use,” says van den Berg. Nevertheless, there remains widespread global resistance to counting the costs of so-called “externalities” into the water price, with few governments willing to risk public opprobrium, as that of Denmark has, by raising the water price to about $7/cubic-metre, compared to the more common global mean of around $1/cubic-metre (see Bank data & statistics for programs in individual regions and countries).

The World Bank has adopted a pragmatic approach toward issues such as water pricing and the involvement of the private sector in water management programs. In 2008, nine low or middle-income countries implemented at least 65 water projects with private participation, involving investments of more than $3.1 billion.

The issuance of water rights may be a valuable contributor to effective water management in some countries, but are politically untenable elsewhere. “One of my priorities as manager will be to find ways of helping our regional units to help clients improve service and governance monitoring,” says World Bank Water Sector Manager, Julia Bucknall.

Water and sanitation for the poorest

Partnerships between donors and development agencies are important in multiplying the effectiveness of resources available for development. One of the most effective partnerships is the Water and Sanitation Program (WSP), a $50 million, multi-donor partnership administered by the World Bank to support poor people in obtaining affordable, safe and sustainable access to water and sanitation services.

WSP Cartoon - July 2009
WSP Cartoon Calendar, July 2009. Visit the WSP site for more such illustrations.

The WSP is the Bank’s longest-running global program, formed in 1979 with the UNDP in an effort to apply the most up-to-date, low-cost technology and inventions to helping poor countries improve water services. Nowadays, it is a partnership which brings together governments and private foundations such as the Bill and Melinda Gates Foundation. Its evolution could serve as an instructive model for how to do not just water development but social development in general.

“The Program started as a technology-focused agency,” says WSP Manager Jae So. “But, as we learned about development, we realized it’s not just technology that counts, but how and why people do things.”

The WSP, therefore, shifted its focus to engaging key decision-makers on critical policy issues including regulatory constraints, institutional inefficiencies, and social or environmental forces driving the water agenda of the 24 countries in which it was operating.

As poor people stream from rural areas to the cities, the WSP has been adjusting its programs accordingly. Jae So says at least 20 WSP focus countries will be increasingly hard-hit by climate change, which will intensify water and sanitation needs. How best to serve those needs?

Privatization might seem like a solution. But the international private sector which invests in other infrastructure sectors has had only limited engagement with the water sector, and with mixed results. This is due both to the very long-run nature of water investments and the decentralized nature of its management, dispersed among communities and towns.

“Public Private Partnerships are important,” says So, “and we need to look more widely at the full range of private sector expertise available, especially the range of domestic private sector service providers. We are looking at PPPs in a much more local and pragmatic way.”

Building capacity, from the ground up

Water should be a government responsibility, but what if government is incapable of providing, or there is no government? The case of Rwanda might provide a model.

Since 2006, the Bank and the Rwandan government have worked to rapidly scale up water delivery in mostly rural parts of the country, where there is little state capacity. The government established a dedicated department for the program and a private company was found to handle delivery.

Water Collage
Water sustains lives across the world
The most difficult-to-find resource – professional expertise – has come from outsourcing to individual contractors with skills to handle needs such as bookkeeping and engineering. These people tend to be retired teachers, semi-retired accountants, and the like who have the time to apply their skills and value the extra earnings. The WSP says So, is examining the prospects of rolling out the program to other fragile states, such as the Democratic Republic of Congo and Angola.

One of the most important realizations of recent years is that water resource management – and water politics – are indispensable factors in water development. “The political economy drives the water agenda,” says Bucknall, “both nationally and across boundaries.”

As an example, Saghir points to the Bank’s role in negotiating the Indus water treaty between India and Pakistan in the 1960s, the Nile initiative in Egypt in the 1990s, and the earlier Mekong treaty between Laos and Cambodia.

“We don’t get into politics – and we shouldn’t because we are a technical organization – but we can play a facilitating or catalytic role because water is a factor of peace and growth.”

Related Features

Success with Sanitation Stories
Easy as Water and Soap: Clean Hands Save Lives
Water Pumps for Community Development in Kosovo 

Related Resources

World Bank Water Publications Catalogue
World Bank Water Web Site
Water and Sanitation Program Web Site
World Water Day Web Site 

Last updated: 2010-03-04

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