Water

Results of ADB Water Week 2004 Water for the Poor: Setting the Rules and Finding the Money Change Agenda Changing Selection Criteria Working with the right information, organizations and leaders Focus investments where good leadership exists

Results of ADB Water Week 2004 Change Agenda Changing selection criteria Changing incentives and advocacy Changing regulation Changing the rules to reward efficiency Changing the focus of lending Changing the nature of water project Changing water financing partners

"Don't put your resources into a leaking bucket". Too often in the past, water investments have been wasted by being directed to governments that promise a lot but fail to measure up with sustainable results.

Why has this happened?

• Investment has not been linked to reform resulting to poor investment environment.

• There has been a lack of understanding about the drivers of change and the prerequisite of good governance for sustainable outcomes.

• Perverse incentives persist favoring the better off and maintaining the status quo.

• Informal water providers have been ignored to the detriment of the poor.

• Vested interested influence investment and divert attention from setting performance criteria.

• Capacity building is either absent or ineffective, with no links to wider reform.

Change is urgently needed. For better project design to benefit the poor, it is critical to get better information about the social, physical and institutional circumstances, including on existing informal water markets, incentives, and vested interests. This can be obtained through water audits prior to designing water projects. Such analysis can reveal the factors needed to improve services for the poor. Incentives are also needed to encourage reforms to be sustained and completed, and these should be the basis for investment decisions. Investments should be focused on capable organizations with good leadership.

• Focus upon pro-poor investment in a participatory manner.

• Create incentives for stakeholders by requiring action on reforms as a condition for providing assistance.

• Obtain all the information required to understand a situation and the drivers for change.

• Where there is effective leadership, back it.

• Donors should ensure their loan proposals adequately address the underlying drivers for change - including leadership, information about the dynamics of a situation, effective organizations and governance.

• Civil society should advocate for effective management of water investments to avoid the cycle of underfunding, inadequate maintenance and rapid deterioration of assets.

• Governments must realize that sustainable results attract investment. "Business as usual" will no longer work.

Three of the seven principal elements of ADB's water policy are to:

Promote a national focus on water sector reform. DMCs will be supported to adopt effective national water policies, water laws, and sector coordination arrangements; improve institutional capacities and information management; and develop a national action agenda for the water sector.

Facilitate the exchange of water sector information and experience. Social inclusive development principles will be supported to promote stakeholder consultation and participation at all levels, increase access to basic water services by poor consumers, and enhance water investments in the DMCs through public-private-community-NGO partnerships.

Improve governance. This will be accomplished by promoting decentralization, building capacity, and strengthening monitoring, evaluation, research, and learning at all levels, particularly in public sector institutions.