This document provides an introduction to strategic planning for water management under the assumption of perfect foresight. It outlines a strategic planning process with stages of strategic analysis, making strategic choices, planning, and implementation. Key points include: - Strategic planning requires analyzing the current situation, desired future, objectives, and scenarios to achieve targets. - Setting strategic goals and targets informed by analysis and stakeholder consultation. - Developing implementation plans, governance, and tools like action plans and monitoring. - Implementation is challenging and requires coordination, leadership, regulation, communication, and addressing political resistance.

1. An Introduction to Strategic Planning
under the Perfect Foresight Assumption
Regional Capacity Development Workshop on
Strategic and Mid-term Planning for Water Management
Minsk, 25 April, 2018
European Union Water Initiative plus
for Eastern Partnership
Alexander Martusevich, OECD

2. Strategic process under
the Perfect Foresight
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 Each stage has its own specific tasks and uses specific tools
 It is not a linear process and iterations are quite possible
Strategic
Analysis
==> Making Strategic
Choice
==> Planning:
strategic &
mid-term
==> Implementation* ;
M&E and corrective
measures, as required
Policy dialogue led by a Champion (President, PM, Minprirody) involving all key stakeholders;
Stakeholder consultations & engagement
* - note that some 70% of strategic failures is due to poor implementation

3. Water Strategy
 Typically covers both (a) Water resources and aquatic ecosystem; and
(b) Water infrastructure - for various uses
 Should take into account specificity and complexity of water resources
(WR), water infrastructure, and water management
 Should be based on transparent realistic assumptions and supported by
bold analysis
 Should take into account best international practices and proven principles
and guidelines (e.g. the OECD Council Recommendation on Water; OECD
Principles: on water Governance; on Private Sector Participation; various
UN ECE Guidelines, etc. ) and implementation tools.
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4. Specific features
of the water sector
 water is essential for life and has no full substitute, while WSS has the
“public good” dimension;
 out of all utilities, WSS infrastructure is the most costly one in terms of
capital costs per person connected;
 achieving WSS targets takes decades;
Hence: (i) long-term public interventions are required;
(ii) affordability constraints to be carefully assessed and
addressed in a cost-effective manner.
 many parts of water infrastructure are natural monopoly sectors
requiring good regulation;
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5. Specific features
of the water sector (cont.)
 transportability – limited and costly, hence importance of the
geographic distribution of WR;
 many water courses and water bodies are trans-boundary;
 the water sector is most sensitive to climate change;
 water may be a source of a major damage from water-related hazards –
natural or man-made.
 The nexus (inter-linkages between water & other sectors) calls for
systems thinking and policy coherence
Finally, water is a key strategic resource of the 21st century (becoming
at least as important as oil & gas) and should be treated accordingly
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6. Water Strategy - 2
 Strategic importance of water, jointly with increased risks and
uncertainties, calls for the Water Strategy to be:
- ambitious but realistic (not least from financial point of view);
- linked with the NSSD and sectoral policies, integrated into the broader macro-
economic policy and budgetary frameworks (policy coherence and integration);
- adaptive and resilient to major risks and unpleasant surprises (strategic
planning under high risks and uncertainties is a special topic).
 Strategic time horizon: typically, 50-100 years, and more;
 Mid-term horizon: 7-30 years; Short term: 3-7 years.
 Work plans for immediate actions: 1-3 years.
In EaP and EECCA: Strategies are often designed for 5-15 year time horizon
(short to mid-term documents, in fact)
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7. Hierarchy of strategic
and mid-term plans on water
 National level: Water Strategy coherent with other sector
strategies, integrated into the overarching policy (NSSD) and
budgetary frameworks; and supported by a feasible Strategic
Financial Plan (SFP) and mid-term Action Plans.
 Based on bold data (statistics, monitoring data)
 Supported by RBMPs at basin level, and by local plans at the level
of municipalities and industries (water intensive or significantly
impacting water resources)
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8. Stage 1:
Strategic Analysis
 Objectives: to clearly understand: where were are (diagnosis of the present
situation); what are present state, trends and pressures, what are main
challenges, key risks and uncertainties facing the water sector ?
 Where we would like to be in a foreseeable future? (desirable future) ;
 and how to get there? (a preferred and alternative scenarios)
 In case of eventual deficit of the water mass balance: how to address it ?
 What could be strategic objectives and targets? What are key trade-offs and
strategic choices to make? - now and on our way to the targets…
 Who are main stakeholders and what are their interests? What are strategic
Implementation constraints (e.g. political acceptability)?
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9. Stage 1:
Strategic Analysis -2
 How different strategic choice would impact key stakeholders? which
changes in behavior of key actors it would require and how to ensure
desired change in behavior (through which incentives)?
 Who might be agents of positive change? Who would (likely) support the
desirable change, and who will resist it? And what are options for mitigating
or minimising eventual political resistance? Etc.
 Ultimately, the Strategy should offer clear answers to these questions
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10. Resulting document
 A background paper with strategic analysis and a good summary of key
findings for policy- & decision-makers. Inter alia, it should outline key strategic
choices to be made by them, upon which selection of strategic targets and the
preferred implementation scenario would depend.
 The paper should be discussed with key stakeholders. In the future it could be
annexed to the final output document (Water Strategy)
Analytical tools to support making and implementing strategic decisions:
 SWOT analysis
 Brainstorming on the future, and Foresight discussion
 Cost-Benefit Analysis (CBA). General rule: to allocate water where it
generates most value for the society, under key risks and uncertainties
 Computer-based tools for strategic planning (e.g. FEASIBLE model for SFP for
WSS)
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11. Tools to support making and
implementing strategic decisions - 2
 Force Field Analysis: forces for and against change (useful to identify
conflicting trends and forces, and potential conflicts; potential supporters and
allies, and those potentially resisting); and
 PEST analysis (Political, Economic, Social-cultural, Technology factors and
constraints) - important for the “political economy of change”
 Stakeholder analysis
 Analysis of risks and uncertainties with a view to plan risk management &
resilience measures
 Methodology for assessing state support measures (subsidies) and other
economic instruments
 Ability-to-pay and willingness-to-pay assessment methodology
 Menu of tools; some tools support several stages of the Strategic Process
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12. Making Strategic Choice and
Setting Strategic Goals
 Based on the background analysis and being informed by it, decision-
makers should make strategic choice - ideally, after consultations with
key stakeholders through a policy dialogue
 Strategic Goals should be clear/simple and meaningful, consistent and
long-term. The choice can be fully autonomous, or taking into account
international commitments (e.g. SDGs, EU Directives (for MS and AA),
Paris Pact on Climate, Water Conventions and other MEAs, bilateral
agreements on water; etc.)
 Outcomes (what to do and what should never be done/taboos) informs
the next stage: Planning
Examples: Egypt and Belarus
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13. Planning:
strategic and mid-term
 Setting SMART strategic and mid-term targets
 Developing scenarios to achieve the targets, with milestones and interim
targets, and selecting a preferred scenario
 Designing implementation mechanism and selection of appropriate
instruments (administrative, economic and information instruments)
 Planning required changes in the water governance system; institutional and
regulatory frameworks
 Planning incentive structure to ensure desired changes in behavior of key
actors
 Planning required resources (financial, human)
 Planning policy integration (NSSD, relevant sector strategies: WSS, agri-
food, energy, water transport ) and ensuring policy coherence
(the lack of coherence could be very costly: example from Moldova)
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14. Resulting policy document
(Strategy)
 Planning good data bases for decision-making (e.g. Water Cadaster; Performance
Indicators of operators) and planning changes in the monitoring and evaluation
(M&E) system (monitoring and evaluation of water resources as well as of
performance of key actors involved in Strategy implementation)
 Planed action to address the “political economy of change” (of implementation)
including conflict resolution and eventual compensation mechanisms.
Resulting policy document (presenting the Strategy), duly approved &
supported by:
 Action plan for overall strategy implementation: who does what, how and by when
(interim deadlines and milestones). Ideally, it should include a more detailed mid-term
action and investment plan for the first years of strategy implementation.
 Equally, the Strategy should articulate what should never be done (taboos)
 A plan on communicating the strategy and mobilising political support to its
implementation.
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15. Implementation
challenge
 Implementation is a multi-sector and multi-stakeholder task, requiring good
co-ordination and good governance, strong political will and leadership
(example of introducing PSP in Armenia)
 The key role of sound regulation: technical, economic, environmental,
sanitary-epidemiological; and of compliance enforcement
 Communicating the Strategy to key stakeholders and to general public: public
information and public awareness campaign (as part of the Action plan) to
mobilise political support and diminish eventual political resistance
 Other measures to mitigate or minimise eventual political resistance (e.g.
compensation for eventual losses if the society wins from the change overall).
 Regular M&E , undertaking corrective measure as required.
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16. Useful Implementation
Tools
At the national & water sector level:
 Action plan and detailed mid-term and short-term work plans
 Communication strategy
 Various information tools: Date base on water resources and water
infrastructure; Performance Indicators and benchmarking; Reporting system,
Performances data disclosure and Environmental labeling; etc.
 Capacity development tools (to develop capacity for implementation)
 Guidelines for applying regulations, administrative, economic and information
instruments
 Ability-to-pay and willingness-to-pay assessment methodology (to plan and
implement social support measures targeted to vulnerable consumers)
 Methodology for assessing economic instruments, not least state support
measures (subsidies)
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17. Useful Implementation
Tools -2
At the basin and local levels (municipalities and operators):
 RBMPs
 Data bases;
 Performance data disclosure system; Performance Indicators and
benchmarking tools;
 Various Guidelines: (i) for applying regulations, administrative, economic and
information instruments; (ii for reform of WSS & sustainable business models;
(iii) for performance-based contracts between the owners and operators of
water infrastructure systems, etc.
 OECD Principles for Private Sector Participation in Water Infrastructure
 Business plans, CDPs, FOPIP
 Computer-based models: FPTWU, WHAT-IF, …
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18. Thank you! Благодарю за внимание!
Александр Мартусевич
+33-1-4524-1384
alexandre.martoussevitch@oecd.org
www.oecd.ord/env/outreach/npd-water-eecca.htp
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