IWRA Executive Office

abstract 725

INTERNATIONAL INVESTMENTS IN THE WATER SECTOR: LAST DECADE ANALYSIS AND WAY FORWARD TOWARDS MDGs

Author(s): Alejandro Jiménez, A. Pérez-Foguet
Civil Engineer (1999, Universidad Politecnica de Madrid), Msc Hidraulycs (2001,Universidad Politécnica de Madrid), PhD Candidate (Universidad Politécnica de Catalunya), I have 9 years of experience in development projects. Since 2004, I am the water and i

Keyword(s): financing, aid, donors, MDG,

Article:

Poster:

Session: OS7a Financing water development

AbstractEffective allocation of investments is vital if the

Millennium Development Goal’s (MDG) target for Water and Sanitation is to be achieved. The present paper

exposes the main findings of a study about the Official Development Assistance (ODA)- bilateral & multilateral- and

the international private sector participation in the water sector during the last decade, undertaken with the main

objective of assessing the international contribution to the sector in developing countries. For that purpose, it makes

a comparative analysis of public and private international investment in the given period; it analyzes the coherence,

both geographical and sectorial, of aid allocation, as well as the terms and conditions of ODA delivered. Finally, it

assesses private participation success in the sector and evaluates cross cutting issues in ODA water programmes.

Analysis was possible through the development of a database using the public available data sets from

Development Assistance Committee (DAC) and the World Bank, completed with population and water and

sanitation access figures from Human Development Report. It covers the last ten years of available completed data,

1995-2004.
Results from international private participation in water and sanitation projects show a little

contribution to MDGs: 98% of investment was dedicated either to medium or high income countries and mostly

oriented to mixed projects over 100 MUSD each; meanwhile, Africa attracted only 0.95% of the investment in the

period. At the same time, private participation has been rather conflictive and shows a decrease tendency, with 28%

of the investment engaged during the decade cancelled or under distress. Moreover, little complementarities were

found between international public and private investment, from the point of view of the unserved. Results of ODA

analysis show how far donors lag behind their own commitments both in terms of quantity and quality. In terms of

quantity, during the 2000-2004 period donors and multilateral institutions only committed 50 MUSD/year more as in

the 1995-1999 period, despite MDG´s declaration. Data show big geographical inequalities, comparing the share of

aid received by regions related to the number of unserved people living there, evidencing donors lack of coordination

to allocate funds among countries. Individual donor analysis did not show better results. Some of the most important

donors of the sector (Japan, European Commission, Germany and France) score a very low performance against aid

terms and conditions criteria, and some donors’ aid allocation principles are not coherent, if MDG’s are to be

achieved. Regardless extremely low coverage in sanitation, not a single DAC donor is really committed to improve

it.
As a result of the analysis made, we can affirm that there is room for improvements in water sector aid.

Current donor’s effort is focused on improving general aid efficiency, through alignment and coordination at national

level in the recipient countries. But MDGs fulfilment needs a wider approach: a global coordination mechanism to

ensure more efficient sector resources allocation between countries is needed, and donors must fulfil their own

recommendations on terms and conditions of aid. The tiny amount of ODA resources dedicated to sanitation

represents a huge contradiction with actual needs.

Events

The congress

Programme

Practical Infos

INTERNATIONAL INVESTMENTS IN THE WATER SECTOR: LAST DECADE ANALYSIS AND WAY FORWARD TOWARDS MDGs