Water Resources Managing a Scarce, Shared Resource

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Water Resources: Managing a Scarce, Shared Resource

W    ater security is fundamental to poverty alleviation. However, it is
     expected that by 2025, 3.5 billion people will live in water scarce or
water stressed areas, up from 1 billion in 2005. The world’s poorest countries
and the poorest communities within them are the most vulnerable to inad-
equate management of water resources.

The International Development Association, the World Bank fund for the
World’s poorest countries, has a unique role to play, working across sectors,
institutions and countries involved in water resources management. The
Bank has proven to be an ‘honest broker’ bridging sensitive trans-boundary
issues, coalescing policy across different parts of an economy, and weav-
ing infrastructure with environmental management, social participation and
institutional development. In this role, and in collaboration with other donors,
the IDA directs critical funding towards countries that would otherwise have
a hard time investing in the management of public goods on a long-term,
continuous basis.

                                           At a glance

  • While world population tripled in the 20th century, the use of water increased six-fold.

  • Irrigated agriculture, in the drive for food security, accounts for 70 percent of water
    withdrawals in water stressed regions.

  • Low-income, IDA countries account for about 80 percent of the most water-poor

  • Over 260 rivers in the world run through more than one country, thus presenting unique
    opportunities and challenges, especially in Africa.

  • Total IDA funding for 56 projects with water resources management components
    amounted to about US$2.5 billion between Fiscal Years 2000–06.

  • Although aggregate outcome measures are hard to come by, IDA projects have produced
    results affecting millions of people from Senegal, to Yemen and China.
The impact of water resource management projects is often profound. Evidence from recent
lending demonstrates such support has increased agricultural incomes, reduced the losses from
flooding, nurtured regional cooperation, reduced sediment loadings and mitigated water-borne
diseases. Several IDA countries are making significant progress in water resources management,
having established basic policies and capacity. Ongoing, flexible support will be needed to
secure and extend these achievements, and deepen their impacts on poverty alleviation and
sustainable development.


SECTORAL CONTEXT                                  security, accounts for 70 percent of water
                                                  withdrawals in water stressed regions. And
While world population tripled in the last        low-income IDA borrowing countries account
century, the use of water increased six-fold.     for about 80 percent of countries with the
Irrigated agriculture, in the drive for food      worst water poverty ratings (see map).

    The Water Poverty Index illustrates the degree to which water scarcity impacts
    on human populations.

Analytical work has demonstrated linkages         • Contributing to the development of envi-
between water and almost all types of eco-          ronmentally sustainable water infrastruc-
nomic activity—including farming, manufac-          ture for storage and multiple uses (storage
turing, energy and transport—as well as the         capacity in some developing countries is as
business climate.                                   low as 38 m3/capita compared with North
                                                    American statistics of 5,961 m3/capita,
Shifting patterns of precipitation and runoff       notwithstanding potential variability).
associated with climate change compound           • Identifying and implementing water effi-
the challenge of managing scarcity, as do the       ciency measures.
destructive forces of water through drought,
flood and water-borne contamination.               Building the intellectual and financial capital
                                                  to improve water security requires concerted
Tensions over water rights are increasing at      and long-term support from an array of
the level of the village, the nation and across   players, including international financial
boundaries.                                       institutions, bilateral aid agencies and non-
                                                  governmental and civil society groups.
Key trends
Water resources management (WRM) is a
complex and relatively new area of focus for      Water resources management cuts across
many countries. It requires actions at the        sectors, skills, institutions, and sometimes
policy, legal and institutional levels while      countries. A public good, water resources
addressing direct impacts at the community        usually have multiple users, thus leading to
level. It is further complicated by the impacts   potential contentious issues of ownership and
and influences of other sectors, such as           stewardship.
industrial pollution, agricultural intensifica-
tion, or hydropower generation. Some of the       WRM initiatives frequently lack a revenue
key trends and priorities in water resources      stream, thus placing additional burden on
management include:                               already over-taxed public finances. Because
                                                  of their sector and geographic reach, many
• Developing a better understanding of            reforms and initiatives in WRM require a high
  water-related linkages across economic          level of coordination across players, from
  sectors at the country level.                   community level to national and international
• Strengthening institutions for effective        level of management processes, or across sec-
  local and basin-level management.               tors as diverse as agriculture and hydropower.
• Creating and implementing innovative            Furthermore, the range of tools required to
  mechanisms for sharing economic, social         address water resources issues extends from
  and environmental benefits of water (ver-        analytical work to participatory processes to
  sus physical entitlements).                     investments in structures and civil works. Not
• Managing water resources across national        surprisingly, this sector demands a long-term
  boundaries.                                     commitment.

IDA CONTRIBUTIONS                                 of policy and legal frameworks. About 75
                                                  percent of IDA-funded WRM projects include
IDA’s work in the water resources sector is       institutions and/or policy components.
guided by the 2003 Water Resources Sector
Strategy.                                         In Tanzania, for example, IDA funding sup-
                                                  ported the development of a National Water
The strategy emphasizes the need                  Policy, which was adopted by the Cabinet in
to address both management and                    2002 and subsequently formed the basis for
development issues—tackling                       a National Water Sector Development Strat-
institutional reforms along with                  egy. As a result, water and water resources
infrastructure upgrades.                          management are now firmly entrenched as
                                                  key priorities in the National Development
To better integrate water management into         Vision. Similarly, IDA funding has supported
country programs and development plans,           the development of water laws in Yemen and
the strategy recommends preparation of            Senegal. In both cases, policy reform was
Country Water Resources Assistance Strate-        accompanied by sector-specific actions.
gies in consultation with client governments.
Eighteen such plans have been produced for        Institutions and capacity-building
IDA countries so far.
                                                  In the case of WRM, relevant institutions
Total IDA funding for 56 projects with WRM        span the range of local, basin, national and
components amounted to about US$2.5 billion       international levels.
between Fiscal Years 2000–06. The funding
specifically to the water resources manage-        The water law in Yemen led to the establish-
ment components of these projects totaled         ment of the Ministry of Water and Environ-
US$640 million. Most spending occurred in         ment to consolidate public management and
Africa (34 percent) and South Asia (31 per-       support an integrated approach to water
cent), and was concentrated in the rural          resources management. From this platform
sector (80 percent).                              emerged the Sana’a Basin Commission
                                                  which has demonstrated an ability to make
Because of water resources management’s           substantive decisions, considered from a
nature, aggregate impact measures are not         multi-sectoral base. The Sana’a Basin Water
available. However, on-the-ground results         Management Project was the first initiative
related to IDA activities can be highlighted in   in Yemen to address the crisis in groundwater
six critical areas.                               depletion.

Policy and legal framework                        At the local level, IDA funding has expanded
                                                  the involvement of local stakeholders in
In most countries, and particularly in IDA        water management through the creation of
countries that struggle with low capacity and     water user associations. In Yemen, 34 irrigation
poorly developed institutions, the Bank pays      water user associations were established over
considerable attention to the foundational        a three year period in the Sana’a Basin, along
components of WRM, namely development             with 15 recharge water user groups.

In China, the Tarim Basin Projects resulted      Agriculture
in the first fully functional integrated river
basin management system in the country.          IDA’s water resource management projects
                                                 in agriculture have simultaneously increased
In India, new participatory micro-watershed      water efficiency and agricultural yields.
planning approaches resulted in highly inte-
grated micro-watershed plans being prepared      In the Loess Plateau Watershed Rehabilitation
by communities, who have greater owner-          Project in China, 1 million farmers directly
ship and commitment. One project created         benefited from increased yields (annual grain
4,300 area groups of farmers and 738 micro-      output increased from 427,000 to over 698,000
watershed user groups to support project         tons) and diversification into higher value
implementation and longer-term operations.       produce (from 80,000 to 347,000 tons in fruit
Recent evaluations indicate that more than       production), with corresponding increases in
70 percent of these groups are operating         farmers’ per capita incomes (from Y360 to
effectively, allowing the voices of all social   Y1263 per year). A second project co-financed
groups in the communities to be heard in         by IDA and the Bank’s commercial lending
watershed development.                           arm, the International Bank for Reconstruction
                                                 and Development (IBRD) further contributed
Trans-boundary river management                  to the plateau’s sustainable development,
                                                 benefiting an estimated 1.5 million people.
Over 260 rivers in the world run through more
than one country, thus presenting unique         In Tanzania, through a combination of policies
opportunities and challenges, especially in      on water rights and fees, training of irriga-
Africa.                                          tors’ organizations, and enhanced irrigation
                                                 efficiency, agricultural yields doubled and
IDA funding produced power, environmental        household income tripled for more than 5,000
and agricultural benefits for Senegal, Mali,      families.
and Mauritania through investments in infra-
structure, equipment and trans-boundary          In China’s Tarim Basin, lining canals to pre-
management institutions in the Senegal River     vent leakage increased water-conveyance
Basin.                                           efficiency from 60 percent to 95 percent and
                                                 saved an estimated 600-800 million cubic
In Mozambique, an International Rivers Office     meters of water every year. This water was
was established within the Water Resources       reallocated to environmental, municipal and
Department, thus providing improved techni-      industrial uses and enabled the reclamation
cal capacity to assess water resources and       of land and the expansion of irrigation to
basin plans, and stronger technical ability to   more than 41,000 hectares of new farmland.
engage in dialogue with other countries on       From 1998 to 2003, an additional 41,460
riparian rights and basin management issues.     hectares of land were reclaimed as irrigation
Increasingly, WRM is emerging as a vehicle for   land, while the productivity of more than
regional peace and stability as well as more     123,000 hectares of low-yield irrigated land
effective water management and allocation.       was substantially increased.

This contributed to an increase in production     In Pakistan, watercourse improvements have
of 220,000 tons per year of wheat, 82,000         led to water savings of approximately 85,000
tons of cotton and 116,000 tons of maize.         acre-feet and reduced water logging and
Higher value crops such as orchards (apples,      flood threats in numerous villages. In other
apricots pears and grapes), oil seeds, melons,    IDA projects, improvements in water use
vegetables and alfalfa were planted on about      efficiency freed up water for regeneration of
148,000 hectares of land.                         environmental assets downstream.

Environmental and social benefits                  IDA-funded flood projects (both infrastructure
                                                  and management) in Uganda, Kyrgyz Repub-
In the Loess Plateau (China), better manage-      lic and Bangladesh enhanced protection of
ment of agricultural land and improved soil       populations, infrastructure and property. An
conservation reduced sediment loading to the      IDA-supported Lake Victoria environmental
Yellow river by more than 57 million tons per     management project helped reduce water
year; a post-project review concluded that        hyacinth to non-nuisance levels and revive
the project was one of the most successful        fish species—thought to be extinct—in satel-
erosion control programs in the world.            lite lakes.

In the Tarim Basin (China), IDA support helped    Cross-sectoral management
to restore 300 kilometers of the lower reaches
of the watercourse that had run dry. Forests in   Frequently, water resources management proj-
the region increased by more than 30 percent;     ects involve more than one sector and combine
the grassland areas grew by 15 percent. This      investment initiatives entailing both institu-
contributed to halving the socio-economic         tional development and capacity-building.
costs of wind and sandstorms.
                                                  In a proposed project in Kenya, for example,
In the Senegal Basin, the high incidence of       WRM lies at the heart of community-driven
water borne disease was tackled by several        development with investments in agriculture,
pilot interventions (such as distribution of      forestry, catchments management, and infra-
medications and bed-nets, as well as sanitation   structure for flood and sediment manage-
programs) that resulted in direct reductions      ment.
in disease and estimated potential reductions
in the order of 40 percent for infant mortal-     Beyond investment lending, IDA
ity due to diarrheal diseases, and 50 percent     provides the expertise and convening
for bilharzia (caused by parasitic worms) and     power needed to take the sector
intestinal parasitosis. These pilots provided     forward.
the basis for a basin-wide strategy for water-
borne disease reduction that is currently         Analysis and technical assistance
being implemented as part of an IDA-funded
multi-purpose water resources management          Expertise ranges from analytical work to pub-
project.                                          lic administration, legal frameworks, public
                                                  participation and environmental safeguards.

This enables IDA to bring diverse tools for      Global and regional partnerships
WRM together in coherent and coordinated
programs. IDA carried out 42 analytical          The Bank also convenes partners to support
studies (economic and sector work) and 40        innovation in integrated water resources
non-lending technical assistance activities in   management. Given the broad reach of WRM
2000–06.                                         needs and initiatives, this type of collabora-
                                                 tion has been significant.
The analytical work has significantly changed
countries’ understanding of the role of water    • The Netherlands finance a US$20 million
in development and poverty alleviation and         trust fund specifically for innovation in
created a new paradigm for management and          WRM, with a priority focus on Africa, down-
investments.                                       stream operational impacts, as well as the
                                                   gender/poverty nexus.
For example, research for the Ethiopia           • The World Bank is one of the three imple-
Country Water Resources Assistance Strategy        menting agencies of another important
(2006) generated economy-wide models for           partnership, the Global Environment Facil-
Ethiopia that show projections of average          ity. This multi-donor, multi-billion fund
annual GDP growth rates drop by as much as         addresses critical threats to the global
38 percent when rainfall variability is taken      environment including the degradation of
into consideration. The correlation between        international waters and persistent organic
rainfall and overall GDP is illustrated below.     pollutants.
This empirical work highlights the importance    • The Bank was invited to coordinate inter-
of considering hydrology and hydrologic            national support to Nile cooperation in
variability when diagnosing economic perfor-       1997, and since 1999, the Bank has been

  Ethiopia: Rainfall and GDP Growth

Source: World Bank, 2006.

    promoting dialogue, and supporting joint       gies, and renewed IDA commitment to infra-
    actions, with a major focus on ‘changing       structure translate into country programs.
    hearts and minds’ over the shared usage of
    Nile waters. The Bank now coordinates the      There remains a strong need for
    involvement of about 17 multilateral and       interest-free credits and grants to help
    bilateral development partners of the Nile     poor countries finance WRM activities
    Basin Initiative (NBI). The multi-country      including policy, institutional and
    NBI, which involves nine African countries,    analytical work.
    has helped articulate common benefits of
    river basin management through analytical      WRM is emerging as a basic challenge to
    work, country dialogue and communica-          development. Important foundational steps
    tions.                                         have been taken, which are leading to proj-
                                                   ects to scale up and deepen impacts. In Tan-
    The NBI has also provided the political        zania and Senegal, initial work on legislation
    environment and institutional capacity to      and capacity building has evolved into more
    move forward and pave the way for IDA          extensive river basin management structures
    financing demand from these countries. It is    and consideration of significant infrastructure
    anticipated that IDA investments will reach    investments in hydropower and water regula-
    US$200 million in FY 2007–08, US$500 mil-      tion. These projects would not have been
    lion in FY 2009–10, and US$2 to US$3 billion   viable without the foundations of previous
    in FY 2011–12, with development benefits        IDA support.
    reaching far beyond the river to regional
    economic cooperation and stability. IDA        In IDA countries, the challenge of achieving
    projects related to and facilitated by the     water security will last for decades. It will
    Nile Basin Initiative, will cover all of the   require continued support in building institu-
    NBI countries between 2007–12.                 tions, capacity, management programs and
                                                   infrastructure. Specific challenges include:
                                                   • Creating an adequate platform of water
Overall, 81 percent of IDA’s water resources         infrastructure so that growth varies less
management projects completed between                with water availability.
2000 and 2006 were found to have satisfactory      • Ensuring equitable sharing of benefits of
outcomes by the Bank’s Independent Evalua-           WRM across local and indigenous, urban
tion Group (IEG) and 77 percent of projects          and rural populations.
were deemed likely to be sustainable.              • Building trans-boundary coalitions and
                                                     mechanisms for regional river management
Although relatively small in magnitude, the          and development.
pipeline of upcoming IDA projects suggests a       • Addressing climate change and variability
strong upward trend of WRM lending in the            in practical ways, including mitigation,
near future as the Bank’s water strategy,            adaptation, and “smart” design of pro-
Country Water Resources Assistance Strate-           grams, institutions and infrastructure.

Support to date has been modest but catalytic.   achievements and increasing the benefits to
Water resources management in Africa and         poverty alleviation and sustainable develop-
other regions is emerging as a success story,    ment.
with important public benefits. Continuous
IDA support will be critical to securing these   March 2007.