Multilateral Newsletter, February 2014

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CII started 2014 with its annual international flagship event – The Partnership Summit – now in its 20th year since its start in 1995, which was CII’s centenary year. Over the years the Partnership …

CII started 2014 with its annual international flagship event – The Partnership Summit – now in its 20th year since its start in 1995, which was CII’s centenary year. Over the years the Partnership Summit has become a unique platform to exchange ideas and evolve solutions to the most urgent challenges confronting the world today. The summit highlighted investment opportunities emerging from rapid poverty alleviation in India and developing countries offered ideas for how a new class of consumers can become a new dynamic for growth.

In this issue of the newsletter the focus story highlights the importance, role and opportunities for emerging Global Value Chains. In addition, the newsletter also provides an insight of some of key happenings in various multilateral institutions.

We are putting in our best efforts to make the Multilateral Newsletter more knowledgeable, informative and industry oriented. We welcome your suggestions and feedback on the newsletter and thank you for the valuable support and the time you take out while going through the newsletter.

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  • 1. Multilateral NEWSLETTER February 2014, Volume 2, Issue 2 Message from Mr Chandrajit Banerjee, Director General, CII B uilding global partnerships and value chains is a continuous and irreversible process. The emergence of international supply chains, the rise of new forms of regionalism, and growing linkages between trade in goods and services are being seen as new challenges for countries that wish to integrate with the world. To enable close examination of the partnerships and synergies that spark the next phase of global growth and develop strong multi-country linkages and networks to assist the transformation of the global economy Confederation of Indian Industry (CII) organized its annual flagship international event -The Partnership Summit 2014 in association with the Ministry of Commerce and Industry, Government of India and the State Government of Karnataka. A major highlight of the Summit was the address of Mr Roberto Azevedo, Director General, World Trade Organization (WTO), his first address in Asia after the conclusion of the historic agreement at the WTO Ministerial in Bali in December 2013. The February issue of the Multilateral Newsletter also highlights the importance of Global Value Chains (GVCs) in defining the new age production process prevalent in the contemporary world and gives an insight towards the emergence of GVCs, the challenges, conventional wisdom and outlook on the economic development, globalization and the policies that are developed around it. Chandrajit Banerjee Inside this Issue Focus Story Global Trade Scenario – A New Optimism and more Challenges................................................................... 2 WTO Entering Into A New Trade Era Post Bali................................. 4 International Trade Center Updated guide for trade representatives addresses new market opportunities...................................................... 7 ADB Think Differently for Asia's Water, Food, and Energy Security – ADB President............................................ 9 $200 Million ADB Loan to Help Uttarakhand Recover from Unprecedented Disaster.............................................. 10 The World Bank Government of India and World Bank Sign $500 Million Agreement to Improve Rural Water Supply and Sanitation Services in Four Indian States............................................ 11 . ASEAN ASEAN and EU Strengthen their Partnership and Cooperation................................................. 8 M u lt i l at e r a l N e w s l e t t e r 1
  • 2. FOCUS Global Trade Scenario – A New Optimism and more Challenges While the success of WTO Bali Ministerial has injected a new life into the multilateral trading system, the world trade community, however, is curiously watching closely the developments with regards to the emergence of new mega trading blocks such as TPP (Trans-Pacific Partnership Agreement), TIPP (Trans-Atlantic Trade and Investment Partnership), and RCEP (Regional Comprehensive Economic Partnership Agreement). These are highly ambitious trade agreements with huge expectations in terms of realizing trade and investment gains. These developments have raised hope as well as challenges. It is no secret that the economic crisis that broke out in 2008, has taken a heavy toll on World trade. Post-crisis, world exports have dipped down because of demand slowdown in the developed market. According to the World Trade organization (WTO), world trade growth, for instance, fell to 2.0 per trade growth, from 5.2 per cent in 2011 and remained sluggish in 2013, as the economic slowdown in Europe suppressed global import demand. However, one positive change that was witnessed is the increasing share of developing countries in global trade. Developing economies share in world exports increased from 34 per cent in 1980, to 47 per cent in 2011. At the same time, the share of developed economies dropped from 66 per cent to 53 per cent. The United States, Japan and the European Union, as a whole, have all recorded declining shares in world exports. It is also true that surging exports from China boosted developing countries share in the world exports. China’s share in the world exports increased from1 per cent in 1980, to 11 per cent in 2011, making the world’s largest exporter. Another noticeable feature is the increasing share of South-South trade. According to WTO’s World Trade Report (2013) as developing economies have raised their collective share in world trade, they have increasingly done so by trading with each other. The share of “South-South” trade in world trade rose from 8 per cent in 1990, to 24 per cent in 2011. The share of North-South trade also increased slightly, from 33 per cent to 38 per cent over the same interval, but trade among developed economies (that is, North-North trade) saw its share slide from 56 per cent to just 36 per cent. Today, the approach of countries on international trade is witnessing an interesting shift. Traditional market access issues pertaining to tariff reductions are no more as relevant as they used to be a decade ago. The emergence of international supply chains, the rise of new forms of regionalism, the growth of trade in services and growing linkages between trade in goods and trade in services are being seen as new challenges for countries who wish to integrate with the world. Since Doha round has been taking an unusually long time to conclude (though Bali Ministerial has raised some ray of hope), countries have further stepped up their efforts towards FTAs (Free Trade Agreements). Already, since the establishment of WTO in 1995, 400 RTAs have been notified. This is in contrast to 124 notifications received by GATT between 1948 and 1994, what we are witnessing today is a new or second wave of regionalism. The three mega FTAs-TPP, TTIP and RCEP – under negotiations are very ambitious, where countries are aiming for a much deeper level of economic integration amongst themselves. Once operationalised these FTAs will most likely change the global trading landscape drastically. While it is estimated is that the WTO Trade Facilitation Agreement will provide a boost to the global economy worth up to $1 trillion a year, the three mega-FTAs too would add significant welfare gains to global economy in terms of trade and investment. For instance, the study conducted by European Union forecasts that a comprehensive transatlantic trade and investment agreement could add €119 billion a year to EU economy and €95 billion a year 2 M u lt i l at e r a l N e w s l e t t e r
  • 3. FOCUS to US economy. The study also finds that the benefits for the EU and US would not be at the expense of the rest of the world but will have a positive impact on worldwide trade and incomes, increasing global income by almost €100 billion. Similarly, RCEP, which has China, India and Japan—three of the largest economies of the world—once operationalised successfully, is likely to bring large income gains to the world economy of between $260 and $644 billion in a decade. As regards TPP, according to Peterson Institute study, the agreement has a potential of boosting global income by an estimated $223 billion per year, by 2025. United States alone would realize an estimated gain of $77 billion per year. The TPP could generate an estimated $305 billion in additional world exports per year. Undoubtedly, these mega-FTAs under negotiations along with a successful WTO Bali Ministerial have instilled a great sense of optimism amongst the world trade community. However, this throws a great amount of challenge as well in view of the highly ambitious goal and expectations from these agreements. The developing countries too are keeping their fingers crossed as they are hoping to integrate into the global value chain through these FTAs. M u lt i l at e r a l N e w s l e t t e r 3
  • 4. WTO Entering Into A New Trade Era Post Bali Mr Roberto Azevedo, Director General, World Trade Organisation delivering his address at the Plenary Session 1: "Entering into a New Trade Era Post Bali"  at The Partnership Summit 2014 held at The Taj West End, Bangalore, Karnataka The outcomes of the Bali Ministerial have resurrected the world’s confidence in multilateral trading systems. Stating this in his address on ‘Entering into a New Trade Era Post Bali’, at The Partnership Summit 2014 Mr Roberto Azevedo, Director General, World Trade Organisation, said the “Bali job” is not over. “Rather, it has provided us with the opportunity to make progress in other areas — and to conclude the Doha round,” he said. The focus now shifts to the effective implementation of the decisions taken at the Ministerial such that it leads to the conclusion of the Doha Round. Mr Azevedo said the greater goal of the Bali Ministerial was to improve the well being of millions of people around the world. He pointed out that the Bali Agreement came through at a time when the world faces high volatility in transnational capital flows, slow growth, widespread inflation and deflation concerns, high unemployment in many countries, and far-reaching economic ripples triggered by monetary and fiscal policies in major markets. He said that the Trade Facilitation Agreement could bring about 10-15% reduction in export and import transaction costs for countries, which will likely result in a significant expansion of world trade. Mr Azevedo also pointed out that the Ministerial focus on easing customs procedures around the world is expected to add $1 trillion to world trade volumes and create some 21 million jobs worldwide. He added that the Bali outcomes will also trigger greater investments in trade-related infrastructure. He observed that the Ministerial outcome could bring increased investment in trade-related infrastructure, particularly in the less developed nations. “It will certainly support the rapid growth in India's trade with Africa — helping to reach the US$ 100 billion mark by 2015,” he said. Mr Azevedo said the WTO Members have agreed to 10 texts altogether, many of them focused on issues of great interest to developing and least developed countries. For example, Ministers agreed on a set of specific measures 4 M u lt i l at e r a l N e w s l e t t e r
  • 5. WTO aimed at helping the least-developed countries to increase their exports and to better fit into the global patterns of production. The texts agreed in Bali establish: • Further commitments to duty-free-quota-free market access • Guidelines for simple, transparent and flexible rules of origin for exports from LDCs • Improvements in market access opportunities for service providers from the LDCs. Referring to the issue of non-binding rules in the WTO text, Mr Azevedo said they are meant to be worked upon in the post-Bali work programme. He acknowledged India’s key role in bringing about a consensus on food stockpiling in the developing countries to support their respective food security programmes. Mr Azevedo called for a holistic approach to WTO negotiations on agriculture, non-agricultural market access (NAMA) and services. Looking ahead, he said: “(i) We must be realistic and focus on those things which are  doable; (ii) The big issues in the Doha Development Agenda are interconnected, and therefore they must be tackled together; (iii) We must be ready to be creative and keep an open mind to new ideas that may allow members to overcome the most critical and fundamental stumbling blocks; (iv) Development  has to be preserved as the central pillar of our efforts; (v) The process must continue to be  inclusive and transparent; (vi) Our efforts must have a sense of  urgency; and (vii) We should be  open-minded  about how far-reaching our next steps will be.” Mr Anand Sharma, Minister of Commerce & Industry, Government of India, said in his address that the Bali Ministerial protected the right of the developing countries to public stockholding for food security. But the Ministerial was not confined to this issue alone. There were many other success stories such as the one on trade facilitation. He observed that the prospect of $1 trillion addition to world trade volumes in the post-Bali period was no mean achievement. “What we have got is the first harvest,” he remarked. Mr Sharma said the Bali Ministerial underscored the centrality of WTO in the rule-based multilateral trade system. He reiterated Mr Azevedo’s view that member countries need to develop a unified view of the three pillars -agriculture, NAMA and services, and added that the Ministerial also drove home the centrality of three areas – food security, livelihood security and rural development. Mr Sharma underlined the importance of trade facilitation and said that since 2009 India has been taking strident steps for trade facilitation with the use of new technologies and networks. Use of technology also brings down the transaction costs of export goods. Mr Mustapa Bin Mohammed, Minister of International Trade & Industry, Malaysia, said he expected world trade volumes to increase significantly in the wake of the Bali Ministerial. He urged WTO to focus greater attention on addressing the issue of non-tariff barriers (NTBs). He also called for greater focus on accelerating SME business growth globally. Mr Bin Mohammed said the RCEP will complement the multilateral trading system without diluting the focus on particular needs of the Asean region. He observed that the Bali Ministerial has “enhanced the credibility of the WTO” and said the WTO talks should stay focused on the development agenda. Mr S Iswaran, Minister in Prime Minister’s Office, Second Minister for Home Affairs and Second Minister for Trade and Industry, Singapore, said that that business should play a key role in promoting multilateral trade systems. “Bali has reignited the confidence and given us the momentum,” he said referring to the renewed focus on multilateralism. Mr Iswaran said that the trade negotiations should also relate to emerging realities like global value chains, distributive manufacturing, integrated logistics services cutting across boundaries, etc. “That’s where trade facilitation and NTBS become just as relevant as any issues linked with market access,” he said. M u lt i l at e r a l N e w s l e t t e r 5
  • 6. WTO Mr B Muthuraman, Past President, CII and Vice Chairman, Tata Steel Ltd, said that even as services gain greater focus in global negotiations, member countries need to consider liberalising movement of people between countries. He said the emergence of informal Really Good Friends (RGFs) involving 20-22 countries within WTO goes against the spirit of multilateralism. The RGFs are apparently aiming to arrive at a plurilateral settlement on services. Ms Arancha Gonzales, Executive Director, International Trade Centre, Geneva, said that the emerging multilateral trade regime should provide an enabling environment for SMEs around the world. She pointed out that from the SME perspective the frontiers of global trade in goods and services are getting increasingly blurred, more so in countries like India. Ms Gonzales said that SME growth also hinges on the nature of regulatory systems. “We need a trade agenda that is reflective of these issues,” she said, adding that boosting services will enhance the prospect of manufacturing growth. Ms Gonzales said that NTBs tend to inhibit SMEs from joining the GVCs. Mr Willam Danvers, Deputy Secretary General, Organisation for Economic Cooperation and Development (OECD), France, said that India with its strong IT and service capabilities is ideally placed to leverage the new opportunities that come with greater integration with global value chains. Earlier, Mr Dhruv M Sawhney, Past President, CII and Chairman & Managing Director, Triveni Engineering & Industries Ltd, said in his opening remarks that the Bali Ministerial delivered something for everyone, from food security to trade facilitation. He that industry should be engaged in the implementation of trade facilitation in a structured manner, in areas like simplification of procedures, transfer protocol and improvement in tax collection. Mr Sawhney said the approach taken by WTO members at the Bali Ministerial could also be useful in addressing two key areas – NAMA and trade in services. “A quick solution is the need of the hour,” he said. Mr Sawhney said that some 400 FTAs have been signed since the setting up of WTO. Now, the challenge lies in integrating the mega trade blocs into the multilateral trading system. He also urged the WTO to address the issue of NTBs. In the interactive session, Mr Azevedo said that for a sustainable future, the issue of disparity between countries must be addressed. He informed that the least developed countries had all extended their support to the Bali package. 6 M u lt i l at e r a l N e w s l e t t e r
  • 7. International Trade Center Updated guide for trade representatives addresses new market opportunities The International Trade Centre’s (ITC) training guide for foreign trade representatives – the only one of its kind in the world – has been updated and revised, and is now available online for free. ‘Entering New Markets: A Guide for Trade Representatives’ compiles good practices and guidelines, explaining how trade officials can promote trade abroad within the context of national trade policy and export strategies. ‘This guide responds to the expressed priorities of trade support institutions,’ said ITC Executive Director Arancha González. ‘With topics ranging in scope from national development planning to trade-promotion event management, office security or what to do when assigned to a new country, the book provides a strategic overview and serves as a hands-on guide.’ Foreign trade representatives balance competing demands and multiple reporting lines. This book advises on setting priorities for markets, industries and clients. It covers services such as export intelligence, trade displays, trade and buyer missions, investment promotion and market entry strategies. It also explains aspects of managing an office, building networks and using modern communications services. Set in the context of current global economic realities, the guide takes into account globalization and its effects on trade and employment, changes in the multilateral trading system, as well as the rise in bilateral and regional agreements, increasing Internet use and instant communication. It provides a set of tools, methods and capacity-building possibilities for trade support institutions in charge of supervising networks of foreign trade representatives. The guide also serves as a reference for trade support institutions to help them gain a better understanding of the issues faced by their networks of foreign trade representatives. This is the third edition of the guide – the first was published in 1973, then again in 1993. Research is based on ITC field work, as it is the only United Nations organization offering a training programme for trade representatives. Source:http://www.intracen.org/news/Updated-guide-for-trade-representatives-addresses-new-market-opportunities/ M u lt i l at e r a l N e w s l e t t e r 7
  • 8. ASEAN ASEAN and EU Strengthen their Partnership and Cooperation The 21st meeting of the ASEAN-EU Joint Cooperation Committee (JCC) was held on 24 January 2014 in Jakarta. The Meeting confirmed the positive momentum of EU-ASEAN Dialogue Relations and looked forward to further strengthening the partnership and cooperation for mutual benefit. Since the adoption in April 2012 of the Bandar Seri Begawan Plan of Action to strengthen the ASEAN-EU enhanced partnership 2013-2017 and the EU's accession to the ASEAN Treaty of Amity and Cooperation (TAC) in July 2012, the relationship has broadened and deepened substantially. ASEAN and the EU exchanged views on developments in their respective region. The EU welcomed the progress achieved in ASEAN integration and Community-building and reaffirmed its support to the centrality of ASEAN in the evolving regional architecture. ASEAN and the EU exchanged views on their increasingly close trade and investment relations. They underlined the value of the Consultations between the ASEAN and EU Economic Ministers to further strengthen trade and investments ties. Key Discussions during the meeting: • The Meeting discussed ASEAN-EU cooperation on the implementation of the Master Plan on ASEAN Connectivity and the possibility of establishing effective mechanisms to enhance cooperation on Connectivity. • ASEAN and the EU looked forward to the first ASEAN-EU Dialogue on Connectivity in Brussels on 24 – 28 February 2014. The Dialogue will be a good opportunity to exchange experiences and best practices as well as explore public and private financing for connectivity. An outcome document will be presented to the next ASEAN-EU Ministerial Meeting (AEMM). • ASEAN and the EU welcomed the successful ASEAN-EU High Level Dialogue (HLD) on Maritime Cooperation, held on 18-19 November 2013 in Jakarta. The Dialogue allowed for an in-depth exchange on different aspects of maritime security and the identification of different follow-up actions. An outcome document will be presented to the next ASEAN-EU Ministerial Meeting (AEMM). • ASEAN and the EU discussed and welcomed the progress in the implementation of the ongoing ASEAN-EU cooperation programmes in support of ASEAN. They also looked into proposals to simplify the procedures as urged by the 19th ASEAN-EU Ministerial Meeting in 2012. • Both parties discussed the programming of the 2014-2020 cycle of financial support for ASEAN under the Development Cooperation Instrument (DCI) and the EU expressed its intention to substantially increase its financing for projects and programmes with ASEAN. Cooperation under this Instrument would focus on (i) Connectivity: sustainable and inclusive economic integration and trade (ii) Climate change and disaster management (iii) Comprehensive dialogue facility. • In their closing remarks, ASEAN and the EU underlined the importance of the partnership between both regional organisations. The ASEAN-EU partnership has lived up to the promise of the Bandar Seri Begawan Plan of Action as political relations intensify, impressive progress is registered in many fields, and new areas of cooperation are being developed. Source: http://www.asean.org/news/asean-statement-communiques/item/asean-and-eu-strengthen-their-partnership-andcooperation?category_id=26 8 M u lt i l at e r a l N e w s l e t t e r
  • 9. ADB Think Differently for Asia's Water, Food, and Energy Security – ADB President It is critical that Asia’s precious but increasingly scarce water resources are managed in a coordinated way to ensure the region has not only sufficient water but also enough food and energy to meet its needs, Asian Development Bank (ADB) President Takehiko Nakao said on 6 February 2014. “We need to think differently about water and its uses for food and energy production—and take action,” Mr. Nakao told delegates in a keynote speech at the 14th Delhi Sustainable Development Summit in New Delhi. Asian Water Development Outlook 2013 notes that 36 of ADB’s 48 Asian member countries, including the People’s Republic of China and India, have poor water security, with some nations facing imminent water crises that threaten their food and energy security. ADB’s Food Security in Asia and the Pacific publication calls for a new approach in addressing malnutrition while the Energy Outlook for Asia and the Pacific looks at the policy, social, infrastructure, and technology issues affecting energy demand. Mr. Nakao said it is critical to look at the links - or nexus - between water, food, and energy. Excessive groundwater has been extracted in some places because subsidized energy allows for unrestricted use of electric power pumps. This in turn threatens water shortages for farmers and a lower power supply to other users. Such distorted pricing must disappear. Meanwhile, rising energy use will squeeze already scarce water resources since large quantities of water are needed for extracting energy and refining fuels. As 80% of water use is for agriculture, water shortages lead to food shortages. The region must change its mindset to understand that “food wasted is water and energy wasted,” Mr. Nakao said. He said river basin organizations that gather users, utilities, and government representatives are key to resolving competition between different uses for water. ADB is working with such organizations to encourage collaborative water management, set up new institutions with better data and information, and encourage innovative technologies. These activities are helping improve water security for more than 400 million people in around 30 rivers basins in the region. Source: http://www.adb.org/news/think-differently-asias-water-food-and-energy-security-adb-president M u lt i l at e r a l N e w s l e t t e r 9
  • 10. ADB $200 Million ADB Loan to Help Uttarakhand Recover from Unprecedented Disaster The Asian Development Bank (ADB) and the Government of India signed a $200 million loan on 5th February 2014 to help the state of Uttarakhand recover from the unprecedented floods and landslides in June last year that have affected about 1 million people. “The loan will help in the economic and social recovery of Uttarakhand by rebuilding roads and bridges, tourism infrastructure, and urban water systems, and by improving disaster preparedness,” said M. Teresa Kho, Country Director of ADB’s India Resident Mission. The loan agreement was signed in the state capital of Dehradun in the presence of ADB President Takehiko Nakao, and Dinesh Agarwal, Minister of Planning, Government of Uttarakhand. During his visit to Uttarakhand, Mr. Nakao viewed by helicopter the disaster-affected areas in the state and discussed rehabilitation issues with Chief Minister Harish Rawat. Mr. Nakao expressed his condolences to the people affected by the natural disaster during his meeting with the Chief Minister and reaffirmed ADB's commitment to the State Government in the reconstruction and rehabilitation effort. Nilaya Mitash, Joint Secretary (Multilateral Institutions), Department of Economic Affairs in the Ministry of Finance signed the agreement on behalf of the Government of India while Rakesh Sharma, Additional Chief Secretary, and Bhaskaranand Joshi, Secretary, Disaster Management Department, signed on behalf of the Government of Uttarakhand. Ms. Kho signed for ADB. “Many lives were lost in the June 2013 natural disaster in Uttarakhand that also caused massive damage to physical infrastructure. The loan will help rehabilitate and reconstruct critical infrastructure and assets with disaster-resilient measures that would facilitate better preparedness for future disaster management,” said Mr. Mitash. ADB’s loan will be used to rebuild 2,400 kilometers of state roads and reconstruct 16 damaged bridges. Damaged urban infrastructure, including roads, will also be rebuilt, and water supply facilities, including water treatment plants and water pipelines, will be rehabilitated in eight to 10 towns. About 50 helipads, heliports, or helidromes will also be built for emergency evacuation and relief operations. A $2 million technical assistance will help Uttarakhand implement the works and adopt modern technologies in road and tourism infrastructure. On top of the $200 million loan, ADB is also providing $15 million to repair damaged energy installations under an already approved $300 million ADB financing facility that has been earmarked for the Uttarakhand power sector. Source:http://www.adb.org/news/india/200-million-adb-loan-help-uttarakhand-recover-unprecedented-disaster 10 M u lt i l at e r a l N e w s l e t t e r
  • 11. THE WORLD BANK Government of India and World Bank Sign $500 Million Agreement to Improve Rural Water Supply and Sanitation Services in Four Indian States The government of India and the World Bank signed a $500 million credit agreement to improve piped water supply and sanitation services through decentralized delivery systems in the states of Assam, Bihar, Jharkhand and Uttar Pradesh. The credit agreement for the Rural Water Supply and Sanitation (RWSS) Project for Low Income States was signed by Nilaya Mitash, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India; Sujoy Mozumdar, Director (Nirmal Bharat Abhiyan) and Project Director, Rural Water Supply and Sanitation (RWSS) Project for Low Income States on behalf of the Ministry of Drinking Water and Sanitation, Government of India; H K Borah, Principal Secretary, Public health & Engineering Department on behalf of the Government of Assam; Anshuli Arya, Principal Secretary, Public health & Engineering Department on behalf of the Government of Bihar; Jabber Singh, Special Secretary, Department of Drinking Water and Sanitation on behalf of the Government of Jharkhand; Arun Singhal, Principal Secretary, Department of Rural Development on behalf of the Government of Uttar Pradesh and Onno Ruhl, World Bank Country Director, India on behalf of World Bank. “Improving access to water and sanitation services through decentralized delivery systems is a development priority for the Government of India. Activities under this project will directly support the government’s efforts to meet these objectives,” said Nilaya Mitash, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India. Today, only 31% of the 167 million rural households in India have access to tap water and domestic toilets (Census 2011). About 67% of the rural population continues to defecate in the open and India accounts for about 50% of the world’s open defecation. Studies suggest that the economic impact of inadequate sanitation in India is equivalent to 6.4% of GDP in 2006. The project will be implemented over a six-year period and will support the design and implementation of a dedicated RWSS program for low income states under the ongoing National Rural Drinking Water Program in the Ministry of Drinking Water and Sanitation (MoDWS). Phase 1 of the project, signed today will support RWSS programs in 33 districts in the states of Assam, Bihar, Jharkhand and Uttar Pradesh. These states have the lowest coverage of tap water with Bihar at 2.6%, Jharkhand at 3.7%, Assam with 6.8% and Uttar Pradesh at 20.2%. Bihar, Jharkhand and Uttar Pradesh also lag significantly in sanitation, with more than 75% of the rural households not having access to latrines within their premises. This project is expected to directly benefit about 7.8 million rural people in these states. “Some 3.8 million women, who bear the burden of securing daily water supplies and dealing with illnesses from poor water and sanitation facilities, are expected to benefit from improved facilities that will get created in the project areas. The project will reduce the time spent by women in collecting water, which they can now use in other productive ways,” said Onno Ruhl, World Bank country director for India. “The World Bank’s Country M u lt i l at e r a l N e w s l e t t e r 11
  • 12. THE WORLD BANK Partnership Strategy is focused on promoting decentralized and community-based participatory approaches in delivering water and sanitation services. This project will pilot schemes at the local level where the capacity of Gram Panchayats (GPs) will be enhanced, and, together with the Village Water Supply and Sanitation Committees, they will be empowered and enabled to make decisions, procure material, carry out construction and manage funds,” Ruhl added. The World Bank has been supporting the government of India in piloting and scaling up RWSS Programs since 1991, contributing more than $1.4 billion and benefitting about 24 million rural households in over 15,000 villages. This project will support sustainable RWSS programs by linking GPs with higher levels of government and strengthening the capacity of PRI institutions; integrating water supply and sanitation interventions and promoting solid and liquid waste management and health and hygiene awareness programs. Other key components of the project include investments for improving water supply and sanitation coverage, including construction of new infrastructure and rehabilitation of existing schemes. Most habitations will be served by Single Village Schemes (SVSs) using local groundwater sources. Multi Village Schemes (MVSs), which mainly rely on surface water sources, will be taken up for those habitations where the local source is either not sustainable or not of acceptable quality. The sanitation component will support the government of India’s program, which includes construction of household toilets, soak-pits, drain and lane improvements, community awareness programs for improving sanitation and hygiene practices, along with incentives for achieving ‘open defecation free’ status. In addition, the project will promote pilot programs for 24/7 water supply and introduce new technologies in the RWSS sector, including the use of solar energy. “One of the major shifts that the four states will witness is the decentralized service delivery arrangements and increased participation by the PRIs and communities. This is expected to help enhance accountability at all levels. The project will also get into ‘twinning’ arrangements with successful on-going Bank supported RWSS projects in India and learn from the good practices that they have already demonstrated,” said Smita Misra, lead water and sanitation specialist and the project’s task team leader. The Project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years. Source: http://www.worldbank.org/en/news/press-release/2014/02/07/india-government-world-bank-agreement-improve-rural-water-sanitation For suggestions please write to us at: multilateralforums@cii.in Copyright © 2014 by Confederation of Indian Industry (CII), All rights reserved. No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of the copyright owner. CII has made every effort to ensure the accuracy of information presented in this document. However, neither CII nor any of its office bearers or analysts or employees can be held responsible for any financial consequences arising out of the use of information provided herein. However, in case of any discrepancy, error, etc., same may please be brought to the notice of CII for appropriate corrections. Published by Confederation of Indian Industry (CII), The Mantosh Sondhi Centre; 23, Institutional Area, Lodi Road, New Delhi-110003 (INDIA) Tel: +91-11-24629994-7, Fax: +91-11-24626149; Email: info@cii.in; Web: www.cii.in 12 M u lt i l at e r a l N e w s l e t t e r