Insight - David Lloyd Owen

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Things are looking up for March's fourth World Water Forum.

I was going to write a melancholy piece on 2005 as the Non Year for Africa where the slippage from the Water and Sanitation Millennium Development Goals is in danger of becoming a landslide due to the lack of external assistance and internal desire for change.

Instead, issue number 12 of the fourth World Water Forum’s (WWF4 for the connoisseur) newsletter shows that with 10 weeks to go before the Mexico City shindig, things are getting serious.

Its headline carries the F word. Yes ‘Finance’, the long-term issue that dares not speak its name (or as Shakespeare wrote ‘Shall I compare you to a Sovereign Debt?’) is being discussed and unlike the Camdessus Report at Kyoto and the G8 Summitry at Evian, it is set to get a fair hearing. At Kyoto, the solitary session devoted to financing water was broken up by protestors within minutes (odd how the press occupied the front row, cameras at the ready) as that well-known oppressor of the oppressed, WaterAid, started its presentation.

The World Water Council’s ‘Task Force on Financing Water for All’ is being headed by Jose Angel Gurria, the former Mexican finance minister and director general designate of the OECD. The emphasis on practicality is echoed by WWF4’s theme, ‘local actions for a global challenge’.

Camdessus was not a failure. In retrospect, the panel now realises that they have ‘not been good political communicators’ partly because nobody asked them to be this in the first place. What Camdessus achieved was to create a conceptual framework for developing financial strategies and policies. The challenge for the Gurria Task Force will be to capture the imagination of the developed countries through proposals based on realisable objectives. The emphasis on preparing a broad range of case studies here is a good start as they demonstrate what can be achieved through Sub-Sovereign Debt initiatives.

I doubt that more money will be made available for water projects worldwide. It’s simply not a ‘sexy’ form of aid funding in the way that exporting cluster bombs is. An insidious crisis such as mounting water scarcity rarely has the ability to propel politicians into action, unlike a headline grabbing disaster. ‘You need something like an oil tanker crashing every year’ an old hand in environmental campaigns once told me. So what little aid that is available needs to be used as a catalyst for local financing.

This also means that whatever the purists say, water services need to be able to cover their operating costs and to finance debt. The 1992 Dublin Statement recognising water as an economic good and its universal access as a human right holds good today. The Gurria case studies point this way, looking at ways the cost of financing service extension can be ground down by the private sector so that municipalities can afford to repay their debts and to ensure that their services remain universally affordable.

Private finance supporting municipal water projects is a quite separate issue from the private sector owning or operating municipal water assets. An open mind on this is needed, as where private sector operations can indeed produce genuine efficiency and delivery gains they are part of the solution. The parallel yet separate imperatives of private municipal finance and private sector participation cannot be overstated.

Instead of morality versus markets, can we look towards moral markets? The potential for creating bonds allowing high net worth, for people in developing economies to invest in water and sanitation projects in their own countries and thus become stakeholders in their development, needs to be tapped. If the Gurria Task Force can crystallise this, a vast contribution the water financing debate will have been made while the good intentions contained in Camdessus will start to become a reality.