The Water Sector and Development. Public Spending and Development Assistance in the Sector

Transcription

1 Water for Life: Implications for Developing Countries Danny M. Leipziger Vice President and Head of Network Poverty Reduction and Economic Management The World Bank Zaragoza, Spain June 30, 2008

2 Outline Poverty and Development The Water Sector and Development Public Spending and Development Assistance in the Sector Key Messages 2

3 Outline Poverty and Development The Water Sector and Development Public Spending and Development Assistance in the Sector Key Messages 3

4 Growth and Poverty Relationship: Growth is vital for poverty reduction Average growth rate (% ) EAP ECA LAC MNA SAR AFR Source: WDI Source: WDI

5 Growth and Poverty Relationship: Growth is vital for poverty reduction (cont.) Poverty headcount ratio at $1 a day (PPP) (% of population) EAP ECA LAC MNA SAR AFR Source: WDI

6 The Growth, Inequality and Poverty Triangle: Growth is vital for poverty reduction 10 Annual change in poverty headcount (%) Romania Zambia Indonesia -3 Burkina Faso Bolivia 6 Senegal Brazil Bangladesh India Ghana Tunisia Uganda El Salvador Vietnam -10 Annual GDP per capita growth, 1990s (%) Source: Pro Poor Growth in the 1990s. Country Case studies 6

7 Downside risks have grown real GDP, percentage change Low income Middle income Base case Low case High income Source: World Bank staff calculations. 7

8 Delivering aid and promoting growth in fragile states has proven difficult Per Capita GDP Growth in vs Number of countries in Low Income Countries Fragile states with decreasing aid since 2000 Fragile states with increasing aid since Non fragile states Growth accelerates since 2000 Source: World Bank staff calculations Growth decelerates since

9 Outline Poverty and Development The Water Sector and Development Public Spending and Development Assistance in the Sector Key Messages 9

10 Water: A Global Challenge EAP ECA MNA SAR LAC AFR Water supply (rural/urban) Sanitation (rural/urban) Millions to be served each year to meet MDGs 10

11 Investments in Water Water investments provide multiple benefits and are drivers of growth and poverty alleviation. Health benefits Environmental gains Building government track record of credibility and inclusivenss Education Gender aspects Economic growth consequences 11

12 Improved Sanitation Facilities and Water Source 12

13 Urbanization Projected Population Developing & Transition Countries (DTC) and OECD P o p u la tio n (b illio n s ) Megacities Cities Towns Other rural Fragile lands DTC OECD DTC OECD DTC OECD DTC OECD DTC OECD Rapid urban growth in secondary cities & towns Still many in fragile rural areas 13

14 An illustration coverage in Latin America Many people still unserved: 51 million w/o access to improved drinking water source (9.2%) 116 million w/o adequate sanitation (23%), less than 13% of domestic sewerage treated 44 million w/o electricity (8%) 96 million using biomass for cooking and heating (19%) 203 million living in inadequate housing conditions (40%) Many w/o adequate transport options 14

15 Latin America: Private Investment in Infrastructure back on the rise? Private Investment in Infrastructure (USD bn) Investment Year Source: Private Participation in Infrastructure (PPI) Database, World Bank 15

16 Investment Needs by Region by 2015 (percent of GDP) 16

17 The Face of Private Sector Participation is Changing 17

18 The Face of Private Sector Participation is Changing (cont.) Water projects with private participation by income group, Projects Low income Upper middle income China Low er middle income

19 Africa: Financial Flows to the Sector Private investment is increasing but not in water WSS 19

20 Outline Poverty and Development The Water Sector and Development Public Spending and Development Assistance in the Sector Key Messages 20

21 Public investment in infrastructure decreasing 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Public expenditure in AFR (11 country sample) % of GDP 4.2% 1.6% Infrastructure Health Education Sum 21

22 Bending the Negative Trend in Public Expenditure Proposal in HDR2006: Min expenditure 1% of GDP Source: HDR

23 Improving the Efficiency of Scarce Public Expenditure 5B USD literally going down the drain: reduce NRW (non-revenue water) # of utilities Developed Developing 5 0 0% 10% 20% UFW: unaccounted for water Source: IB-NET 30% 40% 50% Percent UfW 60% 70% 80% 23

24 Improving the Efficiency of Scarce Public Expenditure (cont.) Subsidies are captured by the middle and upper class: change to access 24

25 More and Better Aid? 2004 US$ billions Total Net ODA Net ODA to SSA Time to deliver on aid commitment is NOW Most of the promised increase in aid has not yet materialized 0 All DAC donors G7 donors All DAC donors G7 donors target* 25 *Based on commitments made at Gleneagles and other donor commitments in 2005

26 More and Better Aid? 2005 US$ (billions) ODA as % of GNI ODA as a % of GNI Total net ODA

27 More and Better Aid? 27

28 Outline Poverty and Development The Water Sector and The World Bank Development Assistance and Public Spending in the Sector Key Messages 28

29 Key Messages Clean water is a development necessity Water and sanitation are public as well as private goods Investment needs are large Basic service delivery is part of inclusive development package 29

30 Thank You - Gracias 30