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Water in the 21st Century : ADB's Evolving Role in the Changing Context

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ADB's Evolving Water Policy

Lack of effective water policies and institutional arrangements is a pressing issue in most of ADB's DMCs. In the absence of reforms, private investments and increased community involvement will remain severely constrained, and potentially wasteful and destructive projects will be embarked upon. ADB's policy recognizes this problem and sets out a process for implementing water sector reforms as a prerequisite to new investments. To avail of ADB assistance, governments will need to adopt national water policies, laws, institutional reform, sector coordination mechanisms, and a national water action agenda.

Financial incentives and regulation, together with concerted efforts to protect water quality, aquatic ecosystems, and watersheds, need to be reinforced to improve the efficiency and sustainability of resource use.

Stakeholder recognition and participation will be promoted, and the needs of women and vulnerable groups will be adequately considered in water projects. New partnerships between public, private, community, and NGO stakeholders will be developed to ensure effective policy reform and environmentally sustainable, socially acceptable projects.

Implementing such reforms will require sustained financial and policy support, for which ADB has a comparative advantage because of its long experience of working with water agencies in the region. In addition, its cofinancing modalities and experience in catalyzing private investments provide a window for increasing support from other funding agencies.

Possible changes in climate are of particular concern in Asia and the Pacific where such phenomena as monsoons, the El Niño Southern Oscillation, and tropical cyclones play such a large role. ADB has supported regional studies on the possible impacts of climate change and is assisting its DMCs to develop national response strategies to help them cope with the greater climatic uncertainty. Comprehensive coastal zone management plans have been prepared for countries vulnerable to sea level changes, and national strategies for managing water resources under conditions of heightened uncertainty will form part of the policy agenda.

Making better use of Asia's shared rivers is an unfinished agenda with potentially large benefits to millions of poor people in the region. However, formulating agreements between subregions to enable equitable sharing of resources and better control of transboundary pollution has proven to be highly controversial and, in some cases, strongly divisive. In promoting regional cooperation, ADB has the potential to play an increasingly important role. ADB has shown its capability to act as a fair and impartial broker in analyzing the needs of populations both upstream and downstream, as demonstrated by its support to the countries of the Greater Mekong Subregion to expand their cooperation around a broader economic agenda of priority regional projects. ADB has also promoted international cooperation in other river basins, such as the Red River shared by the PRC and Viet Nam. ADB's role in promoting international cooperation is well illustrated by its regional water policy consultations, as described in the box on page 24 and below.

ADB's water policy, which is being formulated after extensive global and regional consultations, for consideration by the Board of Directors in 2000, will embody an integrated approach to water resource assessment within the river basin as the basic hydrologic unit. The water policy will incorporate pro-poor strategies and respond to the shift from water resource development to management of supply and demand. Its seven major policy elements are described in the box on page 26.

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