Commission on Sustainable Development

Thirteenth Session

10^th & 11^th Meetings (AM & PM)

MASSIVE SCALING UP OF RESOURCES NEEDED TO MEET GLOBAL GOALS ON WATER,

SANITATION, HOUSING, COMMISSION ON SUSTAINABLE DEVELOPMENT TOLD

Secretary-General Tells Panel of Finance, Development Ministers Greater

Development Investment Imperative to Global Well-Being, Security, Freedoms

Achieving the internationally agreed goals for the provision of clean water, sanitation and proper housing by the target date of 2015 would require a massive scaling up of resources, the Commission on Sustainable Development was told this afternoon during a ministerial panel discussion.

Greater investments in development were imperative to global well-being, security and freedoms, Secretary-General Kofi Annan told the gathering of finance and development cooperation ministers and experts.  The current challenge was to find the right mix of local action and international assistance, with both developed and developing countries living up to their responsibilities.

Halving the proportion of people without access to safe drinking water and basic sanitation by 2015, he said, would require doubling current investments to $30 billion per year, while improving the lives of 100 million slum dwellers by 2020 would need an estimated $5 billion a year.  Stressing that investments in those areas were sound, with high social returns, he noted that opinion polls in many developed countries had shown that their citizens would be willing to devote a much larger share of their taxes to economic and humanitarian assistance than actually was the case.

Held immediately following the conclusion of the Economic and Social Council’s special high-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD), the panel focused on the economic benefits of implementing sound policies on water, sanitation and human settlements.

The Commission’s thirteenth session, due to conclude on 22 April, billed as the first policy-setting session since the 2002 World Summit on Sustainable Development, held in Johannesburg, South Africa, is expected to decide on policies and practical measures to accelerate progress towards achieving the internationally agreed goals and targets related to water, sanitation and human settlements.

These targets include halving by 2015 the proportion of people without access to safe drinking water and basic sanitation, developing by 2005 integrated water resources management and water efficiency plans, and significantly improving the lives of at least 100 million slum dwellers by 2020.

Moderated by Trevor Manuel, Minister of Finance of South Africa, and Hilde Johnson, Minister of International Development of Norway, the discussion focused on how to deliver on those targets in the next decade; how to make services affordable to the poor; and the role of public-private partnerships in meeting water supply and sanitation needs.

In his presentation, the Officer-in-Charge and Deputy Secretary General of the United Nations Conference on Trade and Development (UNCTAD), Carlos Fortin, noted that privatization had improved efficiency and profitability of water and sanitation services in some cases, but in many others it had not.  Privatization may initially lead to the desired results, but a conflict then arose between the need for profitability and universality of access.  Such a conflict often led to serious financial difficulties and a collapse of the whole experience. 

Moreover, he added, evidence had shown that the private sector had been insignificant in providing major investments to improve water and sanitation services where they were most needed.  Quoting the World Bank, he noted that private investments in the sector had totalled $25 billion at end of the 1990s, but virtually none of that had gone to Asia or Africa.

Among the issues raised during the discussion was the need to increase donor assistance, reform the management of water supply, and satisfy water needs without degrading the ecosystem.  It was the responsibility of government to ensure that its citizens had access to water, pointed out one speaker.  At the same time, another speaker noted, the demand for water was such that national governments alone could not carry the burden, which was why international assistance was so important.

Also making a presentation this afternoon was Ian Johnson, Vice-President, Environmentally and Socially Sustainable Development Network of the World Bank Group.  The panellists were Erol Cort, Minister of Finance of Antigua and Barbuda; Abdoulaye Diop, Minister of Finance of Senegal; Carin Jämtin, Minister for International Development Cooperation of Sweden; Suma Chakrabarti, Permanent Secretary of the Department for International Development, United Kingdom; and Len Good, Chairman and CEO, Global Environment Facility.

During a brief open session this morning, the Commission continued discussions for a draft programme of work for the period 2006-2007 aimed at advancing policy decisions on the session’s thematic areas –- water, sanitation and human settlement.  It also heard a statement by Indonesia concerning the outcome of the twenty-third session of the United Nations Environment Programme (UNEP) Governing Council and the Global Ministerial Environment Forum held in February.

The Commission will meet again at 10 a.m. Tuesday, 19 April, to continue its work.

Afternoon Panel

The Commission on Sustainable Development today held a panel discussion with finance and development cooperation ministers and experts on the economic benefits of water, sanitation and human settlements policies.  The panel was moderated by Trevor Manuel, Minister of Finance of South Africa, and Hilde Johnson, Minister of International Development of Norway, with opening remarks by Secretary-General Kofi Annan. 

Statement of Secretary-General

KOFI ANNAN, Secretary-General of the United Nations, noted that the Commission was meeting at a time of unprecedented consensus that greater investments in development were imperative to global well-being, security and freedoms.  Proposals he had had made in his report “In Larger Freedom” in advance of the September’s summit gave pride of place to that message.  In addition, recent reports from the Millennium Project and the Blair Commission brimmed with sensible, affordable suggestions, stressing the need to pay particular attention to Africa.  With courage and wisdom in the coming months, the international community could give development the push it needed to make a difference for decades to come.

The current challenge was to find the right mix of local action and international assistance, he said, with both developed and developing countries living up to their responsibilities.  Developing countries must provide good governance, public investments in health, education and other basic services, and national strategies to meet the Millennium Development Goals by 2015.  Developed nations needed to stage a breakthrough in the Doha round of trade negotiations, and immediately scale up resources.  His report called on the international community to launch an International Finance Facility, front-load official development assistance (ODA), and set firm timetables for donors to meet the target of 0.7 per cent of gross national income in ODA by 2015.

Turning to the Commission’s themes during the current session -- water, sanitation and human settlements -- he noted that halving the proportion of people without access to safe drinking water and basic sanitation by 2015 would require doubling current investments to $30 billion per year, while the United Nations Human Settlements Programme (UN-HABITAT) estimated that improving the lives of  100 million slum dwellers by 2020 would need an estimated $5 billion a year.  Stressing that investments in those areas were sound, with high social returns, he noted that opinion polls in many developed countries had shown that their citizens would be willing to devote a much larger share of their taxes to economic and humanitarian assistance than actually was the case.

Presentations

IAN JOHNSON, Vice-President of the Environmentally and Socially Sustainable Development Network, the World Bank Group, focused on three issues related to the link between water resource management and growth:  ecological management of water; economic management of water; and allocation and use of water, particularly for agriculture and industry.  The economics of infrastructure was an area that had been given attention by the World Bank.  A large increase was needed in investment, to some $30 billion per annum.  It was clear that poor countries were very much undercapitalized.  A minimum platform for water security was needed.  The capital costs for securing water were rising rapidly.  Financing of capital costs remained a major challenges, from storage to distribution.  It must be recognized that poor countries had less than 10 per cent of the storage capacity of rich countries.  Poor countries must increase investment in water infrastructure. 

Regarding economic management, he said that each country must tailor its approach to its own circumstances, which must include incentive frameworks for resource mobilization and sound management.  On the use of water, he noted that agriculture used 70 per cent of water worldwide; that figure was almost 90 per cent in developing countries.  Getting agriculture moving was a central tenet of achieving development.  There would be a doubling in food needs in the future, putting an enormous pressure on land and water resources.  Working on water efficiency in agriculture needed to be given highest priority.  Africa, he noted, was the most underserved region in terms of irrigation for agriculture.  It was necessary to look at how to triple productivity while using water in an efficient manner.  It was also necessary to expand irrigation in Africa, invest in research and development, and invest in a new generation of technology, which managed water as a crucial resource.

Turning to industry, he said quality predictability and waste water management would become major issues in the coming years.  Predictable water supply could be a major inducement for investment by the private sector.  He also noted that almost 2 billion people lacked clean water and sanitation.  It was necessary to look to public and private finance, as well as both foreign and domestic finance mobilization.  Water security was an integral part of human security; it could provide economic security and economic growth, and it was a key input to agricultural growth.

CARLOS FORTIN, Officer-in-Charge and Deputy Secretary General of the United Nations Conference on Trade and Development (UNCTAD), noted that developing country governments had encountered grave difficulties in providing the necessary level of resources to improve water and sanitation services.  It had been suggested that they try to find the needed resources through such techniques as marketing the provision of water, removing water and sanitation subsidies, and liberalizing water services, which would reduce the burden of such services on national budgets, attract capital and improve efficiency and performance.  Research, however, had shown that the situation was more complex and must be analysed in careful detail.

Privatization had improved efficiency and profitability of water and sanitation services in some cases, but in many others it had not, he said.  Privatization may initially lead to the desired results, but a conflict then arose between the need for profitability and universality of access.  Such a conflict often led to serious financial difficulties and a collapse of the whole experience.  Moreover, evidence had shown that the private sector had been insignificant in providing major investments to improve water and sanitation services where they were most needed.  Quoting the World Bank, he noted that private investments in the sector had totalled $25 billion at end of the 1990s, but virtually none of that had gone to Asia or Africa.

Adding that the bulk of water and sanitation services were provided by governments, he stressed the need to improve the efficiency of public services.  It was also possible to set up private/public partnerships.  Research had shown that if the sector was properly regulated, such partnerships could lead to profitability, as well as improved access.  It was often said that the public sector was incapable of running water and sanitation services, but should be capable of regulating them.  With the private sector as a partner, it should be possible to make the public sector an efficient provider, as well as regulator.

Co-Moderator HILDE JOHNSON, Minister of International Development of Norway, said that the common framework for the discussion was Millennium Development Goal No. 7, which contained the important goals on water, sanitation and human settlements.  As to the present situation, she noted that the level of investment was $15 billion per year, which was half of what was needed to achieve the Millennium Goals.  In the last few years, donor resources had decreased.  Africa received about 27 per cent of the total aid for water and sanitation.  There was a huge challenge in terms of international responsibility for delivering on water and sanitation.  There was still another decade -- a short time -- to deliver on those targets.  The responsibility primarily lay with national governments, particularly in the water sector.  Among the questions to be addressed were how to deliver on those targets in the next decade, and what the right composition was in terms of actors and “deliverables”.

Co-Moderator TREVOR MANUEL, Minister of Finance of South Africa, noted that his country had, in 10 years, delivered potable water to 10 million South Africans.  Among the issues to be considered was resource constraint.  The Millennium Goals would not be attained by 2015 without a “big push” and considerable resources.  Also to be considered was the issue of public/private partnerships.  Further, he noted that the first challenge in developing countries was the enormity of finance constraints.  Was the answer to ask for more or to ask donors to allocate resources to specific areas?  Many industries in developing countries tended to be water and energy intensive.  If cost recovery was not possible, what were the challenges that had to be taken on?

During the discussion, panellists stressed the importance of managing and maintaining such water resources as riverbeds and watersheds.  A representative of the Global Environment Facility noted that water resource management had been historically neglected, and emphasized the need to focus on it at the national and transboundary levels.

Other panellists underscored the need to focus on country ownership of water and sanitation services.  Local authorities should be empowered in providing such services, the Minister of International Development Cooperation of Sweden said, since they were the most knowledgeable about needs, conditions and opportunities in both cities and rural areas.  Their efforts and capacities to deal with the sector should be strengthened through increased development assistance.

Similarly, the Minister of Finance of Antigua and Barbuda stressed that water was a key resource and should remain primarily under Government control.  Privatization of such a commodity could deny the most needy with access due to insufficient finances.  The international community should play a more significant role in ensuring that all stakeholders gained access to water and sanitation services.  Others pointed to the utility of private/public partnerships, which could improve the delivery of water and sanitation services in many cases.

Panellists also emphasized the need to provide access to microcredit and microfinance, along with other forms of financial support, to improve human settlements and increase access to housing, reducing the number of slum-dwellers.

Water was the lead sector, since it would not be possible to deliver on the health-related Millennium Goals without focusing on water.  One speaker suggested forming water-user organizations, which would pick up the costs for operation and maintenance of water supply.  Other issues raised were the need to increase donor assistance, reform the management of water supply, and satisfy water needs without degrading the ecosystem.  It was stressed that it was the responsibility of government to ensure that its citizens had access to water.  At the same time, one speaker noted, the demand for water was such that national governments alone could not carry the burden, which was why international assistance was so important.

Noting the need for massive investment in a short amount of time to meet the targets, Jamaica’s representative said it was clear that the private sector could not be stimulated to provide the level of investment required and government was not able to provide it either.  That left bilateral donors and multilateral institutions.  Unless they were prepared to come up with significant resources, the water or sanitation targets could not be met.  Many people could not afford to purchase water.  Therefore, if water was supplied by private providers, what would be needed in the short term was to subsidize water, and in the long term to make the poor less poor.

A subsidy system was also needed, noted Colombia’s representative, so that the private sector did not suffer losses.  There was not a single scheme or model, but many options to improve services, expand coverage and reach the poorest, she stated.  There were several options concerning public-private partnerships.

Summing up the discussion, Mr. MANUEL said speakers had covered everything from appropriate institutional mechanisms to freedom from corruption in the provision of water and sanitation services.  They had also focused on the roles of the public and private sectors in providing such services, which appeared to vary from nation to nation.  Participants had also recognized the existence of competing demands on water resources, the need to examine the interdependence of water with other aspects of development, ministry as well as local government involvement, donor contributions, and the management of the ecosystem as a whole.

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