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p. 2 of 13 BACK | NEXT I. The Context II. The Need For a Comprehensive Water Policy III. The Policy IV. The Policy and ADB's Poverty Reduction Strategy V. Getting the Policy to Work

Water For All: The Water Policy of the Asian Development Bank

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II. The Need For a Comprehensive Water Policy

13. Water security is a rapidly growing issue in the Asian and Pacific Region. The threat of inadequate safe water is real. At the same time, water is a key development ingredient that impacts on a variety of factors that sustain and enhance life. As a critical natural resource, the issues connected with managing it are inherently diverse and complex. They involve questions of allocation and distribution, equity, conservation, pricing, regulation, education, participation, and sustainable use. With the region’s rapid population growth, rising industrialization, increasing environmental degradation and pollution, and the specter of a dwindling resource, stakeholders are now emphasizing the need to address issues relating to integrated water resource management in a comprehensive and holistic manner. Policies for the sustainable use of water need to be developed in consultation with all stakeholders.

A. The Stakeholders’ Perspective

14. Stakeholders across the region are beginning to demonstrate an increasingly acute awareness of the issues that determine the availability and management of water. Water users in agriculture, commerce, industry, or in the domestic sector, are broadly conscious of the scarcity and pollution factors; ADB’s surveys undertaken during the course of project and program preparation consistently show widespread awareness of the physical problems concerning water availability. They are, however, less aware of technical and economic issues that are more the concern of developing member country (DMC) governments. Their participation in the regional water policy consultations⁷ facilitated by the Asian Development Bank (ADB) has demonstrated a sense of urgency among stakeholders to avoid a crisis of scarcity, pollution, and environmental degradation by adopting a more holistic and integrated approach to future investments in water and its management. The consultations also showed that institutional reforms are key to effectively addressing the technical, economic, social, and environmental issues concerning water. Such reforms need to be carefully planned and aggressively pursued.

15. It is widely recognized by water users that most of their governments have yet to adopt effective policies to regulate water allocation and conservation. Legislation to grant users rights to water, and to empower users to protect and advance their rights is commonly absent in most DMCs. Responsibilities for managing water are frequently fragmented and overlapping. This is nowhere more evident than at the local level where, for instance, infrastructure for rural water supply systems is provided by one government department and access to water sources for the system determined by another. Communities, both rural and urban, are rarely involved in resource planning and management. Women who are often more concerned with managing water are scarcely consulted. There is also a general dearth of institutional capacity to deliver services and manage water resources efficiently. Legislation, holistic and integrated resource management, and community involvement need to be the cornerstone of a renewed process for improved resource use.

16. Many international initiatives have been taken to promote the conservation and efficient management of water use. The Dublin and Rio conferences in 1992 were particularly significant in terms of perceiving water as an integral part of the ecosystem, a natural resource, and a social and economic good, and in promoting integrated water resources management. The first and second world water forums in Marrakech (1997) and The Hague (2000) have served to highlight the role of water in meeting basic human needs, preserving ecosystems, and managing water wisely. Appendix 2 contains a summary of major international and regional initiatives in water in the decade to 2000.

17. The international initiatives are also reflected in the policies and approaches for the water sector adopted by several international agencies. For instance, the World Bank’s policy paper on water resources management (1993) describes a “comprehensive analytical framework” that is based on the river basin as the fundamental management unit. It underscores the fragmented nature of current water resources management and advocates a holistic, integrated, and comprehensive approach for improved efficiencies. The European Union, too, has recently drafted a framework for water management as the operational tool to implement a new European water policy. It has a strong environmental and ecological focus and requires member states to establish river basin management authorities. The Organization of Economic Cooperation and Development adopted (1998) the integrated water resource management model in its analysis on the performance and challenges of water management in its member countries. There is, therefore, broad global agreement on the approaches to improved water resources management.

B. ADB’s Perspective

18. ADB’s perspective on water issues derives from a review of lessons learned from previous interventions in the sector, the distillation of good practices in the region and elsewhere, and current contexts. ADB has intervened actively in the water sector⁸ and financed projects for irrigation, drainage, flood control, water supply and sanitation, hydropower, fisheries, forestry and watershed management, navigation, or multiple uses (Appendix 3). Over $15 billion, or about 19 percent of its total lending, has been invested in water sector projects. Of this, hydropower ($2.8 billion), irrigation and drainage ($5 billion), water supply and sanitation ($4 billion), watershed management ($636 million), and flood control ($523 million) have been the principal areas of attention. Technical assistance worth $280 million has been provided to prepare projects, research sector issues, formulate sector solutions, and build institutional capacities. ADB’s assistance has been provided mainly in the context of evolving country and sector strategies. Over time, however, ADB’s lending for water projects, relative to its total lending, has declined from an annual average of 30 percent in the early 1980s to 16 percent in the 1990s. In dollar terms, however, annual lending for water over the eight-year blocs from 1968 has increased from $74 million during 1968-1975 to $875 million during 1992-1999. Moreover, while lending for other social sectors such as health, education, and rural development has increased during recent years (implying lower lending levels for water), the nature of lending for water has altered; ADB increasingly supports projects that promote efficient water management, improve irrigation and drainage, and provide effective flood management interventions.

19. The principal lesson learned from investments in the water sector, and from a review of the sector’s current context in the DMCs, is that ADB, like its DMCs, needs to move rapidly from an era of disaggregated water sector investments aimed primarily at creating assets to an era of holistic, integrated investments to promote efficient water use. Investments in water supply and sanitation, irrigation and drainage, hydropower, flood control, and watershed management should be set in the context of managing water resources within river basins. The creation of assets in each subsector, and water use within that sector, has impacts on other sectors that need to be factored into investment decisions to optimize project designs. Competition for use of a dwindling natural resource requires ADB to support the development of an effective legislative framework that gives users rights to water and provides a mechanism for dispute resolution. Equally, ADB needs to promote efficiencies in water use by supporting demand management, including water pricing. The poor need to be targeted for equitable and rapid access to water. Communities need to be empowered, educated, and involved in the process of water management. Capacities need to be sustainably built to manage water use more efficiently. Good practices need to be replicated.

20. With the stakeholders and ADB seeing the need to act urgently and in concert to avert the clearly disastrous consequences of a business-as-usual approach to water development and management, the requirement for ADB to articulate a clearly focused policy to support regional water initiatives is pressing. A policy, prepared in consultation with its development partners including nongovernment organizations (NGOs), representatives of user groups, the private sector, academia, and government agencies, will provide ADB with a means to more effectively meet the development challenge.

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