A short paper on

"INTERNATIONAL AGENCIES HAVE FAILED TO DRAW SIGNIFICANT

LESSONS FROM HALF A CENTURY OF PROGRAMMING IN THE WATER
SECTOR"

International agencies have failed to draw significant lessons from half a

century of programming in water sector. Major reasons behind are adopting
policy of creating followers (dominating with internal ego) which produces
unhealthy competition, heterogeneous policies of support and lack of
coordination and harmonization among development agencies, thus, overlook
shifting priority, actual decentralization process and figures and effective
performance indicators in developing countries.

Shifting Priority: International aid flows are often observed as an

expression of both moral and political similarity. In the past it has been
reflected that international agencies were more concerned about structural
adjustment programs which emphases on good governance, human rights
and democracy. Then international development world shifted on policy
based structural adjustment led to water utility privatization (80's) and but
later result was found in adverse distributional effects in the organizations.
International development agencies prioritized to play an important role in
facilitating reform in service delivery. This incremental nature of reform
generated extra layers of governmental or public authorities and demanding
unbiased and smooth inter-governmental transfer (IGT) or Inter-
Governmental Financial Transfer (IGFT) facilitating changes in policy
formulation and implementation. IGFTs are made from national to local
government. The volume and modalities for IGFTs are determined under the
fiscal decentralization framework. In developing countries, the local
governments become a second tier. Decentralization policy that has evolved
from a centralized system can not be designed and implemented easily. As
lessons of decentralization in Karnataka, India, suggest four broad areas to
be considered when planning for decentralization; functional assignment
(autonomous boards etc.), augmenting revenue (autonomy to raise avenue),
IGFT, and accounting for equity (sustainability). International agencies have
to be ensured whether decentralization characteristics have been in placed
before investment or not in the countries.

The Report of the World Panel on Financing Infrastructure noted that annual
required investments in urban wastewater treatment are likely to grow much
faster than any other sector. Private sector participation for financing water
infrastructure is limited because of inadequate guarantees to ensure return
on capital investment. International agencies' investment should be available
to facilitate water sector projects managed by private operators for improved
access to water. There are many approaches for ensuring effective outcome
and delivery mechanism; such as Result-based approach, evidence based
approach, OBA approach etc. For adequate guarantees of return of
investment as well as effectiveness on poverty reduction, the international
agencies have to have lesson learnt from successful history of
implementation approaches from past programs.

Historical data show that sanitation and drinking-water enjoyed more than
8% of total ODA in 1997. At that time, other social infrastructure sectors,
such as health, education, population and reproductive health, received lower
proportions of aid compared with sanitation and drinking-water. A total of
US$ 158 billion in development aid commitments was reported for 2008.
Commitments to water and sanitation comprised US$ 7.4 billion or 5% of all
reported development aid. During the 11 years since 1997, however, the
proportion of development aid allocated to sanitation and drinking-water fell
from 8% to 5%, while development aid allocated to health increased from
7% to 11.5% and that for education remained steady at around 7%.

Adequacy of international financial flow to water sector ?: To

determine the adequacy of financial flows either for national governments or
globally, current and/or projected financial expenditures must be assessed
against estimated financial needs. At the global level, there have been
several assessments of financial needs to meet the MDG target. Thirty-five
out of most targeted 37 countries report that financial flows are insufficient
to achieve the MDG target for sanitation. External development assistance to
water sector is provided by countries, multilateral organizations, NGOs and
private foundations. Aid is provided through various channels and for various
purposes, including general budget support and sectoral budget support, as
well as to projects directly for infrastructure development, planning, training,
advocacy, education and monitoring. In case of sanitation and drinking
water, the global cost estimates for meeting MDG target range from US$ 6.7
billion to US$ 75 billion per year. The international attention is found
focusing on easy and quick return of investment in terms of money otherwise
targeted missions despite of examining outcome for poverty reduction. The
relationship between country coverage level and donor aid is found weak.
The countries with low coverage do not receive higher levels of aid relative to
other countries.

Coordination and harmonization among International Agencies:

Coordination and harmonization among international agencies are essential,
especially in those countries with a high number of donors. Obstacles to
alignment, harmonization and coordination are cited both at country level
and among international agencies. The identified obstacles fell into two
categories: obstacles at country level, and obstacles among international
agencies relationships. The obstacles at country level included the factors as
poor governance, weakness in water sector policies or strategies, lack of
credible national plans, weak national procurement rules, lack of government
capacity in fragile states, barriers to increasing alignment with country
systems, non-optimal integration of local government levels into overarching
approaches for water sector, and lack of prioritization. Whereas the identified
obstacles among international agencies relationships included as poor
targeting of international resources, lack of transparency in partner
structures and procedures, lack of full acceptance of principles of best
practices by development partners, high transaction costs to harmonize
between agencies before benefits are realized and lack of prioritization.

Additional lesson: International development agencies are willing to invest

in developing countries whatever may be their hidden reasons. Most of the
developing countries underwent decentralization process forming

different layer and processes as shown in Fig.1. Mainly there are three tiers,
national government, sub-national government and local community.
Targeted layer is the local community for result outcome towards increased
access to safe, affordable and economic water. Between national government
and sub-national government (local government) formulation and
transformation processes are placed which includes IGFT, policy of
decentralization and institutional reform. Support or investment (preferably
soft loan or grant) on these layers or processes should not be evaluated with
final outcome of contribution in poverty reduction directly.

Top Layer National Government

Formulation IGFT Policy Reform

Transformation

Local Govt. Sub-National Government

Revenue, Tax
Donors

Delivery
Transparent Delivery

Receptor Local Community

Policy/Reform Support
Delivery Support
Monitoring Support
IGFT Inter-Governmental Financial Transfer

Fig.1. International Donor Agencies for different supports

Delivery layer which needs most of international supports is encircled by local
government and community. Transparent delivery system working through
local government is a key factor leading towards autonomy, accountability
and sustainability. Thus international agencies' investment in this delivery
layer would give meaningful targeted outcome. Support to receptor (local
community) basically on monitoring of delivered tasks will be accepted
through NGOs or CBOs or private sectors.
Conclusion: International agencies' investment should exhibit the result
towards increased access to safe, affordable and economic water. Unbiased
and need based investment in appropriate layer of decentralized structure of
developing countries, recognizing latest priorities in water sector with
coordination and harmonizing among international agencies, will certainly
exhibit the best outcome and results towards MDG targets. Three interrelated
dimensions of water management must be addressed to reach this vision for
a water-secure world: improving access to water supply and sanitation, and
promoting better hygiene; improving water resources management, including
allocation among competing needs; and improving water productivity in
agriculture and industry. Development is continuous process with temporal
and spatial varying dimensions of inputs, outputs and outcome. Development
agencies should able to flow along with the 'River of Development' flushing
out irregularities, unbalanced, unaccounted, opaque and under developed
obstacles, aiming smooth flow and not forming turbulence.

-Dr .Madhav Narayan Shrestha, Nepal

Water, Sanitation and Hygiene Expert
mnshrestha@mail.com