Water

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Asia Pacific Water Forum Ministerial Meeting, 4th World Water Forum
Securing Water Sector Financing, Reforms, and Capacity Building for MDG Achievement

Remarks By:

Geert H.P.B. van der Linden
Vice-President for Knowledge Management and Sustainable Development
Asian Development Bank

20 March 2006
Mexico City

Introduction

Mr. Hashimoto, distinguished guests, ladies and gentlemen: It is an honor to bring greetings to you on behalf of the Asian Development Bank, and to join you in defining the mission of the new Asia Pacific Water Forum.

The creation of this Forum comes at a critical time in the race to meet the Millennium Development Goals. Not only is water essential for life, it also plays a fundamental role in creating the conditions for higher levels of health, income, education and food security. Thus, achieving MDG Target 10 on safe drinking water and improved sanitation will support and accelerate achievement of all the MDGs.

While some progress has been made, the Asia and the Pacific region still has far to go to reach Target 10. According to "Asia Water Watch 2015," a new joint-agency report published by ADB, one in five Asians still lack access to improved water supplies, and one in two Asians lack access to improved sanitation. The Asia-Pacific Water Forum will provide an important means by which the remaining challenges can be identified and addressed.

Bridging the Financing Gap

One major challenge, of course, is financing. The Water Watch report estimates that the region needs a minimum $8 billion in annual investments to meet the MDG water target. In 2003, at the 3rd World Water Forum in Japan, the Camdessus Report similarly warned that financing in the water sector needed to double to achieve Target 10.

I am very pleased that ADB is responding to this challenge. Earlier today, we announced our new Water Financing Program, which aims to approximately double our annual water investments between 2006-2010. The program will deliver a substantial package of investment, reform, and capacity development in three key areas:

• Rural water services to improve health and livelihoods,
• Urban water services to support sustained economic growth, and
• Basin water management to promote integrated water resource management and healthy rivers.

This Program will also mobilize and leverage cofinancing from the private sector and multilateral and bilateral partners. While ADB supports water projects across the region, ae will initially focus the program on 5 countries-the People's Republic of China, India, Indonesia, Pakistan, and Viet Nam. Together, these countries account for approximately 80% of ADB's water investments, and demonstrate considerable potential to make good progress. In addition to lending, we have set an initial target of $100 million in grant assistance to implement the program.

We of course recognize that financing alone is not enough. The Camdessus report in 2003, and most recently the UN report on water and development, warns that the major barriers are institutional. Governance of the sector must clearly improve. It is for this reason that ADB takes a comprehensive approach that includes support for reforms and capacity building, along with financing. Effective reforms can remove the institutional barriers that prevent water utilities from being financially viable and sustainable. Such barriers include weak regulatory frameworks and artificially low tariff levels.

Reforms must also reflect the principles of integrated water resource management, and bring into sharper focus the fundamental role river basins play. ADB is committed to assisting governments and communities to implement these reforms and manage investment projects and programs.

Conclusion

Ladies and gentlemen, issues such as these need an international forum for discussing country experiences, initiatives, and challenges. We welcome the creation of the Asia Pacific Water Forum, and the opportunity it provides to share knowledge and strengthen commitments toward sustainable solutions for the sector. We also support the initiative to hold regular Asia Water Summits as an opportunity for leaders from government, private sector, and civil society to work together to achieve water for all. We would like to recognize the leadership the Japan Water Forum has taken to advance the creation of the Forum, and we support that the first Asia Water Summit be held in Japan.

Let me conclude by wishing you a productive time today. I look forward to collaborating with all of you on this important and timely initiative.