Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
At the Arab-Swiss Water Day, which followed the Arab-DAC Dialogue on
Development in 2017, Arab donors and DAC members agre...
January 2019 • OECD Development Co-operation Directorate
Arab and DAC
providers target
Sub-Saharan
African countries,
wher...
January 2019 • OECD Development Co-operation Directorate
TRENDS IN TOTAL SUPPORT TO WATER AND SANITATION
There has been si...
January 2019 • OECD Development Co-operation Directorate
MAIN PROVIDERS OF THE WATER AND SANITATION SECTOR
This note cover...
January 2019 • OECD Development Co-operation Directorate
In 2016, the Asian Development Bank,
Japan, the International Dev...
January 2019 • OECD Development Co-operation Directorate
Chart 2. All donors Regional FFD
allocation of water and sanitati...
January 2019 • OECD Development Co-operation Directorate
Chart 3. Income group breakdown of
water and sanitation FFD suppo...
January 2019 • OECD Development Co-operation Directorate
The United Arab Emirates committed
an annual average of USD 2.5 m...
January 2019 • OECD Development Co-operation Directorate
MOBILISING PRIVATE FINANCE FOR DEVELOPMENT IN THE WATER AND
SANIT...
January 2019 • OECD Development Co-operation Directorate
these amounts, which would link with the OECD DAC Blended Finance...
January 2019 • OECD Development Co-operation Directorate
water reform, respectively.
The OECD engages stakeholders through...
January 2019 • OECD Development Co-operation Directorate
The OECD High level Risk Forum provides a venue for risk managers...
January 2019 • OECD Development Co-operation Directorate
Box 8. The benefits of improving water risk governance in Morocco...
Upcoming SlideShare
Loading in …5
×

OECD Report - Financing Water and Sanitation in Partner Countries

80 views

Published on

OECD Report - Financing Water and Sanitation in Partner Countries.
Background report - 2019 Arab-DAC Dialogue on Development.

Published in: Government & Nonprofit
  • How can I improve my memory book? How can I improve my memory recall? visit to learn...➤➤ https://bit.ly/2GEWG9T
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Be the first to like this

OECD Report - Financing Water and Sanitation in Partner Countries

  1. 1. At the Arab-Swiss Water Day, which followed the Arab-DAC Dialogue on Development in 2017, Arab donors and DAC members agreed to explore collaboration on water and sanitation. Since then, the Kuwait Fund for Arab Economic Development, on behalf of the Arab Coordination Group (ACG), and Switzerland, on behalf of the DAC, lead an ACG-DAC Task Force on Water and sanitation, with support from the OECD. This brochure outlines the main volumes and trends of Arab and DAC providers in financing water and sanitation, using the OECD development finance database, and provides further information on the OECD’s work on water and sanitation. The water and sanitation sector is substantially underfunded, even if support to the sector stood at USD 11.5 billion in 2016  Finance for Development (FFD) supports progress towards the Sustainable Development Goal 6, which aims at ensuring access to water and sanitation for all. However, with water and sanitation support standing at USD 11.5 billion in 2016, external funding remains insufficient relative to the needs (estimated at USD 114 billion per annum in 2015- 2030, according to UN Water and the World Health Organization).  DAC providers’ support to water and sanitation decreased by 27% between 2012 and 2016 (USD 5.6 billion on average per year), while the Arab donors that report to the OECD (which include both bilateral and multilateral providers) decreased their investments by 22% over that period (USD 765 million annual average).  Over 2013-15, private foundations’ giving to the water and sanitation sector in developing countries amounted to over USD 152 million on average per annum.  Over 2012-2015, USD 1.54 billion of private finance was reported as being mobilised by official finance in the water and sanitation sector. Arab providers do not report yet to the OECD on amounts mobilised. Financing water and sanitation in partner countries These statistics are based on Arab and DAC providers’ reporting to the OECD. Summary statistics for these and other providers of development co-operation and, when available, project-by-project data can be found at: www.oecd.org/dac/financing-sustainable-development and www.oecd.org/dac/stats/non-dac- reporting.htm. The information regarding philanthropies has been extracted from an OECD survey comprising data from 2013 to 2015.
  2. 2. January 2019 • OECD Development Co-operation Directorate Arab and DAC providers target Sub-Saharan African countries, where the needs are greatest  Both Arab and DAC donors targeted Sub-Saharan Africa in their water and sanitation-related interventions. Yet, while the DAC provided 33% of its water and sanitation-related support to fragile contexts over 2012-16, Arab providers directed 63% of financing to this sector.  Over 2012-16, an annual average of USD 133 million was committed by all providers towards water and sanitation- related humanitarian ODA, representing 0.8% of all humanitarian assistance. The OECD Recommendation on Water provides guidance on a variety of issues, including finance, governance and managing water risks  The OECD facilitates a Roundtable on Financing Water, which brings together the water and finance communities to overcome the global challenges of financing the investments needed in the sector. Arab donors do not yet participate in Roundtable meetings. Active participation would be an opportunity to share experiences and contribute to good international practices that can accelerate water-related finance.  The OECD Principles on Water Governance identify a number of important governance areas for sustainably managing and securing access to water for all. Arab donors could support implementation of these Principles in their priority partner countries.  Managing water-related risks and disasters (i.e. the risks of too much, too little and too polluted water; and disruption to freshwater systems) are critical to prioritise investments. The OECD works to identify such risks and could benefit from Arab inputs in this area.
  3. 3. January 2019 • OECD Development Co-operation Directorate TRENDS IN TOTAL SUPPORT TO WATER AND SANITATION There has been significant progress in the water and sanitation sector in recent decades. Since 1990, millions have gained access to improved water resources and sanitation. However, according to the WHO and UNICEF, 2.1 billion people still lacked access to safely- managed drinking water services and 4.5 billion lacked access to sanitation in 2015. Poor sanitation, water, and hygiene lead to about 675,000 premature deaths annually and to estimated annual economic losses of up to 7% of GDP in some countries. Two thirds of the world’s population live in areas that already experience water scarcity for at least one month per year,1 and over 500 million people live in areas where water consumption exceeds the locally renewable resources by a factor of two. Against this background, the returns of investing in water and sanitation are high, estimated at USD 4.3 for every dollar invested, thanks to reduced health costs and greater productivity and participation in the workplace.2 Chart 1. Trends in total FFD support to water and sanitation 2012-16, gross commitments, USD billion, constant 2016 prices Note: Commitments translate into disbursements in coming years (spending on multi-annual commitments are spread over several years). The Sustainable Development Goals (SDGs) could usher in a transformative shift in developing countries, as the goals encompass economic, social and environmental dimensions that will promote sustained growth and shared prosperity. Hence, SDG 6 enjoins policy makers to “ensure availability and sustainable management of water and sanitation for all”. External Financing for Development (FFD) commitments for water and sanitation from all providers of development co-operation, including both official and private financing, reached USD 11.5 billion in 2016 (Chart 1). However, UN Water and the World Health Organization estimate the needs of the water and sanitation sector at USD 114 billion per annum in 2015-2030 (or USD 1.7 trillion for the whole period). Given this, there is still a significant funding gap for water and sanitation that current flows can only partially bridge with direct interventions.3 Notwithstanding, it is important to mention that according to UN Water, excluding household contributions, external assistance represents only 12% of water and sanitation investments, while 68% stems from domestic sources and 20% from repayable finance. 1 OECD (2018), Financing Water – Investing in Sustainable Growth. Policy Perspectives – OECD Environment Policy Paper No. 11. Available at: https://www.oecd.org/water/Policy-Paper-Financing-Water-Investing-in-Sustainable-Growth.pdf 2 World Health Organization (2017), Financing Universal Water, Sanitation and Hygiene under the Sustainable Development Goals, UN-Water Global Analysis and Assessment of Sanitation and Drinking-Water. Available at: http://www.who.int/water_sanitation_health/publications/glaas-report-2017/en/ 3 World Health Organization (2017), Financing Universal Water, Sanitation and Hygiene under the Sustainable Development Goals, UN-Water Global Analysis and Assessment of Sanitation and Drinking-Water. Available at: http://www.who.int/water_sanitation_health/publications/glaas-report-2017/en/ The OECD development finance database contains detail of almost 8,183 water and sanitation-related activities per year. The note focuses on the period 2012-16, a period when flows to water and sanitation hit record levels in 2015.
  4. 4. January 2019 • OECD Development Co-operation Directorate MAIN PROVIDERS OF THE WATER AND SANITATION SECTOR This note covers DAC members, as well as 20 bilateral providers that report to the OECD (which are not members of the DAC) and 35 multilateral organisations. Regarding the Arab countries and institutions, the note includes activity-level data from the Arab Bank for Economic Development in Africa, the Arab Fund for Economic and Social Development, Islamic Development Bank and the OPEC Fund for International Development. The OECD also receives activity-level data from the United Arab Emirates (which includes the Abu Dhabi Fund for Development) and Kuwait (including the Kuwait Fund for Arab Economic Development). The note draws on these Arab development finance flows, which inevitably only provides a partial picture of total Arab flows. DAC members committed an annual average of USD 5.6 billion (45% of total water and sanitation support) between 2012 and 2016. Non-DAC providers committed an annual average of USD 114 million in the same period for the sector, with the Arab bilateral providers (for which information is available) committing most of it, with USD 112 million. Multilateral agencies also committed USD 6.8 billion on average over that period (54% of total water and sanitation support), of which Arab multilateral agencies committed USD 654 million. Bilateral and multilateral Arab providers represented 6% of total water and sanitation support (see Box 1). These flows to the water and sanitation sector represented 5.7% of total sector allocable FFD for DAC members and 7.9% for Arab countries and institutions. Table 1 ranks the main FFD providers to the water and sanitation sector between 2012 and 2016, with the World Bank Group providing 24% of the total. In addition, a number of providers have significantly increased their amount to this sector in recent years, notably the UAE (632% increase over that period), Kuwait (87% increase), as well as other DAC members such as the Slovak Republic, Portugal or Italy – although these providers started from relatively low levels to the sector. Among the Arab providers, the United Arab Emirates, the Islamic Development Bank and the Arab Fund for Economic and Social Development were the most important FFD providers to the water and sanitation sector between 2012 and 2016. Arab institutions decreased their FFD commitments to the water and sanitation sector by 22% over 2012-16. Box 1 provides an example of the Saudi Fund to the water sector – information that is currently being processed by the OECD as Saudi Arabia started reporting in 2018 at activity-level. Box 1. Rehabilitation and Construction of Water Network in Uzbekistan The Saudi Fund for Development is improving drinking water services in the Republic of Uzbekistan and to improve the living conditions of the residents in the Kashkadarya area by re- establishing the water supply system in Kasane and Mubarak and the rural communities adjacent to the newly-installed water pipes, transferring water from a reservoir. The project also aims to raise water quality and reduce the level of poverty by raising public health and living standards and increasing the supply of drinking water in these areas.
  5. 5. January 2019 • OECD Development Co-operation Directorate In 2016, the Asian Development Bank, Japan, the International Development Association and the International Bank for Reconstruction and Development were the top 4 FFD providers of water and sanitation- related flows, providing over USD 4.9 billion over that period (39% of total water and sanitation support). Regarding Arab providers, the UAE’s commitments reached USD 178 million in 2016, while the Arab Fund and the Islamic Development Bank committed USD 167 million and USD 157 million respectively. The OECD also collected data in a survey on philanthropic institutions’ spending on water and sanitation in developing countries for the period 2013-15. During this period, philanthropies provided over USD 457 million to the sector, representing 1.9 % of total sector allocable philanthropic flows. The main sub-sectors targeted were basic sanitation (43%) and basic water supply (18%). Almost half of these funds (45%) were provided by the Bill and Melinda Gates Foundation, followed by the Coca-Cola Foundation (13%), Howard G. Buffet Foundation (7%), Conrad N. Hilton Foundation (5%) and the H&M Foundation (4%). Table 1. Top 10 providers of water and sanitation flows 2012-2016 average, gross commitments, USD million, constant 2016 prices Provider Amount Share IBRD 1 618 13% Japan 1 435 11% International Development Association 1 227 10% Asian Development Bank 1 017 8% Germany 924 7% France 811 6% Inter-American Development Bank 801 6% European Union 660 5% United States 434 3% Islamic Development Bank 427 3% Total 9 395 75% GEOGRAPHICAL TARGETING OF WATER AND SANITATION SUPPORT Looking at all flows to the water and sanitation sector between 2012 and 2016, providers targeted regions most in need: 24% of total support to the sector targeted Sub-Saharan Africa, while South and Central Asia commitments represented 21%. The middle-income countries represent 70% of total commitments. The top ten recipient countries represented 38.4% of total commitments to the sector (see Chart 2 and Table 2). Focusing on DAC members, they targeted Sub-Saharan Africa (30% over 2012-16), followed by South and Central Asia (17% over 2012-16) and Far East Asia (10.8%). Their main recipients were India, Jordan, Viet Nam, Ukraine and Morocco. If we look at Arab providers, they targeted Sub-Saharan Africa (37.6%), the Middle East (24.3%) and North Africa (19.8%). Iran (from the Islamic Development Bank), Morocco, Lebanon, Gabon and Gabon were among their main partners.
  6. 6. January 2019 • OECD Development Co-operation Directorate Chart 2. All donors Regional FFD allocation of water and sanitation activities 2012-16 annual average, gross commitments Note: Percentages next to country labels represent shares of total water and sanitation support to all developing countries Table 2. All donors’ top 10 FFD recipients in the water and sanitation sector 2012-16 annual average, gross commitments, USD million Partner Amount Share India 1,201 9.6% People’s Republic of China 772 6.2% Viet Nam 615 4.9% Morocco 453 3.6% Brazil 377 3% Jordan 318 2.5% Bangladesh 294 2.3% Argentina 274 2.2% Kenya 260 2.1% Egypt 252 2% Total 4,816 38.4% Commitments to the Middle East and North African (MENA) region reached an annual average of USD 1.8 billion between 2012 and 2016 for the water and sanitation sector, of which 17.5% was committed by the International Bank for Reconstruction and Development, 17.1% by Germany and 14.2% by the Islamic Development Bank. Arab providers committed 44.1% of total flows going to the sector in the MENA region. Their main partners were Iran (21.8% of total water and sanitation support from the Islamic Development Bank only), Morocco (10.9%), Lebanon (9.2%) and Tunisia (6.4%). Not all providers are focusing on fragile contexts to the same degree.4 The share of water and sanitation flows targeting these contexts was stable over 2012-16 (32.7% of total DAC water and sanitation support, while for Arab providers this figure represented 62.8%). The water and sanitation sector spills over other sectors, such energy, infrastructure, health, agriculture or private sector development. All these sectors have direct impact on the development of a country recovering from fragility. Beyond that, water crisis and fragility are threats to the prosperity and well-being of millions of people, and water and sanitation are important factors for environmental fragility.5 Water crises can contribute to fragility and, according to the FAO and the World Bank (2018)6 , water crises are one of the top risks for the MENA region (see the last section on the OECD work on managing water-related risks). 4 According to the latest OECD States of Fragility Report (2018), fragile contexts are in Afghanistan, Angola, Bangladesh, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo, Cote d’Ivoire, Democratic People’s Republic of Korea, Democratic Republic of the Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guatemala, Guinea, Guinea-Bissau, Haiti, Honduras, Iran, Iraq, Kenya, Lao People’s Democratic Republic, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Nigeria, Pakistan, Papua New Guinea, Rwanda, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sudan, Swaziland, Syrian Arab Republic, Tajikistan, Tanzania, Timor-Leste, Uganda, Venezuela, West Bank and Gaza Strip, Yemen, Zambia, and Zimbabwe. 5 OECD (2018), ‘States of Fragility 2018’. Available at: http://www.oecd.org/dac/states-of-fragility-2018-9789264302075-en.htm 6 FAO and World Bank (2018), ‘Water Management in Fragile Systems – Building Resilience to Shocks and Protracted Crises in MENA’’.
  7. 7. January 2019 • OECD Development Co-operation Directorate Chart 3. Income group breakdown of water and sanitation FFD support 2012-16 annual average, gross commitments DAC members Arab countries and institutions Note: The “unspecified” category is used when the country targeted cannot be identified. The ‘Arab providers’ refers to both Arab bilateral and Arab institutions. Most Arab and DAC water and sanitation-related activities focus on middle- income countries (MICs), which received 67.5% of total Arab flows (USD 514 million) and 59.6% of DAC flows (USD 3.4 billion). About 31% of water and sanitation commitments from DAC members targeted low- income and least-developed countries (LICs and LDCs), while this was 32.4% from Arab countries and institutions, on average over 2012-16. WATER AND SANITATION-RELATED AID TARGETED BY ARAB AND DAC DONORS WHEN PROVIDING HUMANITARIAN ASSISTANCE Between 2012 and 2016, an annual average of USD 133 million was committed by all providers towards water and sanitation-related humanitarian Official Development Assistance (ODA, see Box 2 for a methodological overview on how these amounts were calculated), mainly by Canada (23.9%), the United States (18.6%) and Germany (15.8%). This suggests that water and sanitation humanitarian ODA reached a minimum of 0.8% of total humanitarian aid. This humanitarian ODA mainly targeted Iraq (17.9%), the Syrian Arab Republic (12.5%) and Kenya (11.6%). Box 2. Methodology for estimating humanitarian water and sanitation-related ODA Data shown in this flyer cover development co-operation in the water and sanitation sector. The definition of ODA to water and sanitation excludes humanitarian aid. Humanitarian aid can be delivered directly by a provider or channelled through a multilateral organisation; and can include various activities, including water and sanitation-related ones, provided they are a humanitarian intervention. To calculate water and sanitation-related humanitarian aid, we identified water and sanitation-related projects within the total humanitarian activities through a key-word search using the words “water” and “sanit-”. Note that the limitations of this methodology can lead to underestimations.
  8. 8. January 2019 • OECD Development Co-operation Directorate The United Arab Emirates committed an annual average of USD 2.5 million in water and sanitation-related humanitarian aid between 2012 and 2016 (see Box 3 for UAE Water Aid Foundation and its initiative on water- related humanitarian aid). This humanitarian ODA mainly targeted Yemen (53.8%), Jordan (33.6%) and Afghanistan (11.3%).7 MAIN MODALITIES AND FINANCIAL INSTRUMENTS USED Between 2012 and 2016, Arab and DAC providers respectively committed 99.8% and 90% of their flows to water and sanitation in the form of projects. Both Arab and DAC providers also implement triangular co-operation projects to deliver their water and sanitation-related support (see Box 4 for an example of a triangular co- operation project by the Islamic Development Bank’s through the Reverse Linkage modality). Grants were the most frequently used instrument by both DAC and Arab providers in their water and sanitation ODA, accounting for 97% of total DAC and 65% of Arab FFD commitments over 2012-16. 7 Regarding the Arab donors, note that the OECD only has water and sanitation humanitarian data from the United Arab Emirates. Box 3. United Arab Emirates Water Aid Foundation and the Suqia campaign The UAE Water Aid Foundation is a non-profit organisation that provides humanitarian aid and contributes to find permanent and sustainable solutions to water scarcity. In 2014, the UAE Water Aid Foundation launched the ‘Suqia’ campaign in co- operation with the Emirates Red Crescent Authority, which provided access to fresh drinking water to over 7 million people around the world. Some of the UAE’s partner countries were Ghana, Benin, Mauritania, Bangladesh, Afghanistan and Somalia. Box 4. Reverse Linkage Project between Burkina Faso and Morocco in Water Quality Treatment The Islamic Development Bank, Burkina Faso and Morocco implemented a triangular co-operation project from 2015 to 2017 to improve the capacity of Burkina Faso in water quality treatment. The project aims at improving the quality of water in Ouagadougou and surrounding areas by i) protecting water resources against eutrophication in the Ziga and Loumbila dams, ii) optimising the process within the water treatment plants and iii) strengthening the capacities of the ONEA Central Lab in water quality control.
  9. 9. January 2019 • OECD Development Co-operation Directorate MOBILISING PRIVATE FINANCE FOR DEVELOPMENT IN THE WATER AND SANITATION SECTOR Water-related investments vary according to their funcion, scale and, among others, asset longevity. Historically, official finance has played a central role in financing water and sanitation investments, and is likely to continue doing so in the future. However, due to the constraints on public finance and substantial investment needs, leveraging contributions from other sources of finance can help scale up investment. Blended finance, which is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries,8 can harness private sector resources for water and sanitation investments, being capable of strategically adresssing the risk-return relationship in developing countries. The OECD has put forward five principles to ensure blended finance is successful in mobilising private resources for development (see Box 5 on the OECD Blended Finance Principles). From 2012 to 2015, USD 1.54 billion (USD 375 million on average per year) of private finance was mobilised in the water and sanitation sector, as reported to the OECD. Private finance flows in the water sector have been limited to date (1.9% share of total private finance mobilised). This private finance was mobilised mainly in upper middle-income countries (43%) and least developed countries (39%). Over 2012-15, private finance mobilised by official development finance interventions in the sector took the form of guarantees (more than 60%) and syndicated loans (25%). In order to understand how private finance can be mobilised at greater scale in the water sector, the OECD is undertaking a project on blended finance and water investments in order to identify good practices and examine challenges in applying blended finance to specific geographic areas and in particular water-related sub-sectors (see Box 6). As seen, Arab providers are important donors in the water and sanitation sector. We can therefore expect they would be important actors in mobilising private finance for water and sanitation. However, Arab providers do not report to the OECD on the amounts their official finance is mobilising additional private finance. As a result, Arab donors are not represented in the blended finance flows from the OECD. Arab providers could consider reporting on 8 OECD (2018), Making Blended Finance Work for the Sustainable Development Goals, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264288768- en Box 5. OECD DAC Blended Finance Principles 1. Anchor blended finance use to a development rationale 2. Design blended finance to increase the mobilisation of commercial finance 3. Tailor blended finance to local context 4. Focus on effective partnering for blended finance 5. Monitor blended finance for transparency and results Box 6. OECD project on blended finance and water investments The project, to be launched in 2019, seeks to answer which types of water investments are most appropriate for private sector investment in the following sub-sectors: - Large-scale urban water utilities - Small-scale off-grid sanitation, wastewater collection and treatment - Multipurpose infrastructure and landscape-based approaches.
  10. 10. January 2019 • OECD Development Co-operation Directorate these amounts, which would link with the OECD DAC Blended Finance Principle 5 of increasing transparency. THE ROUNDTABLE ON WATER FINANCING The Roundtable on Financing Water is a global public-private platform established by the OECD, the World Water Council and the Netherlands. It draws upon political leadership and technical expertise, with the ambition of facilitating increased financing of investments that contribute to water security and sustainable growth. The Roundtable engages a diversity of actors – governments and regulators in developed, emerging and developing economies, private financiers (e.g. institutional investors, commercial banks, asset managers, impact investors), development financing institutions, bilateral donors, international organisations, academia and civil society organisations – focused on finding novel ideas and solutions on financing water investments.9 Roundtable meetings are substantiated by robust analytical work, developed by the OECD and its partners along several themes (see Box 7). The OECD is considering regional meetings of the Roundtable, which provide a deeper dive on issues of particular importance in the region. The OECD could facilitate a regional meeting of the Roundtable on financing water, with Arab donors, in the future. GOVERNING WATER ACTIVITIES Managing water for all is not only a question of resources availability and money, but equally a matter of good governance. Policymakers inevitably face challenges in designing and implementing water policies: institutional and territorial fragmentation, but also limited capacity at the local level, and questionable resource allocation. These obstacles are often rooted in misaligned objectives and poor management of interactions between stakeholders. The OECD has developed Principles on Water Governance as standards to help governments understand whether their water governance systems are performing optimally and help to adjust them where necessary (see Chart 7). The OECD has also developed water governance indicators and collected evolving practices to help implement these principles. The Sebou River Basin in Morocco pilot tested the indicator framework, contributing to the development of the framework and the methodology, while Jordan and the Palestinian Water Authority shared their experiences on stakeholder engagement and 9 More information in http://www.oecd.org/water/roundtable-on-financing-water.htm Box 7. Roundtable on Financing Water issues 1. Tracking financing needs and capacities. This stream of work endeavours to produce robust data on investment needs. This can help identify hotspots and target support. 2. Harnessing private finance. The focus currently is on blended finance, in particular domestic finance. 3. Supporting strategic investment pathways. The emphasis is on ensuring that funding goes to projects that contribute most in terms of water security and sustainable growth. This requires new metrics and data but also capacities to combine and sequence projects along pathways.
  11. 11. January 2019 • OECD Development Co-operation Directorate water reform, respectively. The OECD engages stakeholders through the OECD Water Governance Initiative, a unique international policy forum that meets twice a year to share experience on water reforms and produce knowledge and guidance in support of better water governance. The 8th Meeting of the OECD Water Governance Initiative (January 2017) took place in Morocco. Moreover, the OECD carried out Policy dialogues in Jordan and Tunisia jointly with the Global Water Partnership-Mediterranean in the context of the project labelled by the Union for the Mediterranean on “Governance and Financing for the Mediterranean Water Sector”. The reports diagnose the main governance and financing challenges to private sector participation in water supply and sanitation and suggests ways to address them. Arab donors could engage in further work in the MENA region with the OECD to promote the principles on water governance. Chart 4. Overview of OECD Principles on Water Governance ENSURING RISKS ARE TAKEN INTO ACCOUNT Water-related disasters represent 43% of all disaster events, 42% of the casualties but 74% of the economic losses in the world, and the bulk of these socio-economic impacts are suffered by developing countries. In a global economy, the impacts of water-related disasters, such as floods, can disrupt global supply chains, causing propagation effects across borders. Droughts are a major contributor to the volatility of food prices, which have been linked to recent episodes of social unrest and political instability. Partner countries need appropriate water-risk management policies and international solidarity can support these countries. Economic and social vulnerability to water-related disasters is the result of several long-term trends, such as the steep increase in concentrations of people and assets in cities and coastal risk-prone areas, climate change, and increased interdependencies across critical infrastructure and value chains. The OECD High level Risk Forum provides a venue for risk managers from governments and the private sectors to discuss these challenges and exchange solutions to reduce water- related disaster risks. This resulted in the adoption of the OECD Recommendation on the Governance of Critical Risks by the OECD Ministerial Council in May 2014, which provides a framework against which risk management policies can be evaluated and compared. Adequate preparation for water-related disasters requires governments to invest in risk analysis, structural protection, policies in support of prevention and emergency response capabilities. It also entails social policies and financial mechanisms to mitigate the welfare impact of losses and ensure a quick recovery and reconstruction that reduces future vulnerability. Such investments pay dividends in the long term. TRUST & ENGAGEMENT Clear roles & responsibilities Capacity Policy coherence Appropriate scales within basin systems Regulatory Frameworks Data & information Financing Innovative governance Trade-offs across users, rural and urban areas, and generations Integrity & Transparency Monitoring & Evaluation Stakeholder engagement WATER GOVERNANCE
  12. 12. January 2019 • OECD Development Co-operation Directorate The OECD High level Risk Forum provides a venue for risk managers from governments and the private sectors to discuss these challenges and exchange solutions to reduce water- related disaster risks. This resulted in the adoption of the OECD Recommendation on the Governance of Critical Risks by the OECD Ministerial Council in May 2014, which provides a framework against which risk management policies can be evaluated and compared. Adequate preparation for water-related disasters requires governments to invest in risk analysis, structural protection, policies in support of prevention and emergency response capabilities. It also entails social policies and financial mechanisms to mitigate the welfare impact of losses and ensure a quick recovery and reconstruction that reduces future vulnerability. Such investments pay dividends in the long term. The critical policy challenge is how to prioritise investments suited to different risks. Managing water-related risks requires improved policy coherence across water management, disaster risk reduction and climate change adaptation. When co-ordinated, these efforts can set an incentive structure that delivers more resilient societies. Governance is therefore one of the fundamental challenges to managing water-related risks. The OECD Recommendation on the governance of critical risks proposes a fundamental shift in risk governance towards a whole-of-society effort. It proposes actions that governments can take at all levels of government, in collaboration with the private sector and with each other, to better assess, prevent, respond to and recover from the effects of extreme events, as well as take measures to build resilience to rebound from unanticipated events. The OECD, through its Reviews of risk management policies, assists governments in developing tailored policy responses to these challenges. As an example, the OECD Review on Risk Management in Morocco was conducted in 2016 and proposes a series of policy recommendations to improve flood risk governance there (see Box 8).
  13. 13. January 2019 • OECD Development Co-operation Directorate Box 8. The benefits of improving water risk governance in Morocco Strengthening the governance of critical risks in Morocco is key to support its development path towards inclusive growth, and socio-economic well-being. Morocco’s territory indeed is exposed to a series of water hazards, which can lead to severe socio-economic impacts. The high concentration of the national GDP in risk-prone areas, and the sensitivity of key sectors of the national economy to disasters (agriculture, tourism) make economic resilience to disaster a key issue for Morocco. Since 2014, Morocco has partnered with the OECD High Level Risk Forum to advance this policy objective and benefit from the expertise of the Forum. The adoption of the OECD Recommendation on the Governance of Critical Risks by the Government of Morocco in 2014 was a strong signal in that direction. The OECD Peer Review of Risk Management Policies in Morocco conducted in 2015-2016, in collaboration with the Ministry of the Interior and financed by the German Development Co-operation, was another major milestone. The peer review process led to the development of 30 policy recommendations to improve risk governance across the risk management cycle. As a follow- up, the Moroccan government has asked the HLRF to support the implementation of the recommendations, by proposing a roadmap to strengthen the risk governance structure in Morocco, by supporting capacity-building activities as well as the development of flood early warning systems in the country, which benefitted from the support of the Swiss Development Cooperation. This note was prepared by Juan Casado-Asensio, Marisa Berbegal Ibañez and Néstor Pelechà Aigües, with inputs from Wiebke Bartz-Zuccala, Charles Baubion, Antonio Canamas Catala, Ana Fernandes, Tomas Hos, Xavier Leflaive, Tansher Singh and Hakan Tropp. For further information contact: juan.casadoasensio@oecd.org

×