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The paper analyses the shifts in paradigms and practices around water financing.

TitleFinancing water for all : behind the border policy convergence in water management
Publication TypeBook
Year of Publication2004
AuthorsMehta, L, Canal, M
Secondary TitleWorking paper / IDS
Volumeno. 233
Paginationvi, 37 p. : 4 tab.
Date Published2004-09-01
PublisherInstitute of Development Studies at the University of Sussex
Place PublishedBrighton, UK
ISBN Number1858648459
Keywordsfinancing, government organizations, investment, policies, poverty, private sector, sdipol
Abstract

The paper analyses the shifts in paradigms and practices around water financing. The key issues at the moment are the diminishing role of the state in the provision of water services, shifts in public and private spending on water and an enhanced role for the private sector. Current initiatives around water financing are reviewed, and the implications for the poor are discussed. The paper makes a case for public financing systems in order to provide water and sanitation for all.

The concluding chapter mentions several possibilities to enhance public financing for water supply and sanitation:
- there is the need to create and provide financial support for public utility partnerships which should work with an NGO counterpart;
- microfinance facilities and remittances could also be drawn on as a source for public financing;
- pension funds, ethical investments, municipal bonds and loans raised in local markets could also be used to support local water systems that provide effective lifeline support to the poor;
- high tariffs for infrastructure in rich areas (for example the factories of multinational drinks companies or for swimming pools) could also be introduced.
- water governance is key. Creating institutional mechanisms to reduce non-revenue water and wastage, facilitating conservation and tackling corruption;
- building the capacity of local government and local municipalities (both in terms of knowledge and finance) to tackle new challenges in water service delivery is vital;
- while foreign aid cannot be seen as the panacea, there is a strong case to increase resource transfers
from the North to the South to strengthen public systems.

However, the paper states that these measures cannot be effective in the current financial system unless there are some radical changes:
- the IFIs and bilateral donors must cease to require private investment in public services as a condition of aid;
- Poverty Reduction Strategy Papers, rarely focuses on or prioritises water and sanitation issues. National governments could be encouraged to prioritise spending in this area;
- debt cancellation in return for enhancing public services could go a long way in both reducing poverty and creating the much needed finances required for public systems;
- finally, a mere 1 per cent cut to military budgets would easily match the additional US$9¿15 billion which is estimated by the WSSCC to be needed in order to achieve the MDG on water and sanitation through low-cost technology and locally appropriate solutions.

NotesBibliography: p. 32-37
Custom 1202.3, 202.8

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