Alan Nicol, Overseas Development Institute
David Grey,The World Bank, Washington, D.C
1. David Grey, Head Specialist, Water Resources, Africa Region, at the World Bank focused his talk on the cross-sectoral issues of water resources which underpinned supply and use of water within different sectors. He first outlined the challenge Africa faced, then moved on to national policy responses, before focusing on issues surrounding international waters and aspects of the World Bank's support to African countries. Prefacing his talk by stating that the Bank played a facilitating and 'quiet' role in these water resource issues, he said that it was not the Bank's role to 'speak on behalf of riparian states, that are dealing with the sensitive issues of sovereignty and rights on international rivers'.
2. Setting out the challenge David Grey emphasised how much of it was intimately linked to poverty - and to conflict. The colonial legacy had caused Africa to have both more countries per river basin and more river basins per country than any other part of the world. This complexity was accompanied by rapidly rising populations which contributed to growing water scarcity. In addition African countries were faced with rising costs for water and, in many cases, distorted prices. Nevertheless, he clearly sensed a growing movement within Africa to address the challenges - including at the highest political level. Some of the responses and processes being undertaken were themselves rarely seen in industrialised countries.
3. 'Variability' was singled out as a key aspect of the challenge, creating high costs in terms of regulation of flows and storage, and requiring considerable management capacity, which, in many cases was lacking. The close link between variability and economic impacts was noted. Continent-wide rainfall variability and national annual variability caused problems of drought in some parts of the continent (and flooding in others) to which was added the effect of climate change. Resulting impacts were felt at economic, social and environmental levels, all of which could aggravate poverty. Demonstrating the economic significance of variability, he cited southern Africa and the drought of 1991/92 which had affected 20m people. In Zimbabwe alone this had caused a 45% decline in agricultural production; an 11% decline in GDP; and a 62% decline in stock market value - representing an important 'hydro-economic' link. The need to better understand these shocks and ways of addressing them was emphasised.
4. Scarcity would affect up to 18 African countries in the next 20 years, he said. In urban areas coverage of water and sanitation was already falling, and would prove a greater challenge as population levels climbed to 1,100m (500m urban) by 2020. Deteriorating water quality was another important aspect of scarcity which, in the case of the Niger Delta, for example, had already led to reductions in fish stocks and massive degradation. Growing access costs and rising long-run marginal costs could mean that the next cu m of water supplied would cost as much as 2-3 times higher than the last. For the poor, whose labour time expended and cash spent on gaining access already meant they often paid ten times more than the rich, the scenario was particularly serious. In addition, in agriculture, distorted prices were also a problem, and he cited the high cost of water used by farmers in Galteng province, South Africa, to grow crops for export to Zambia, where the cost of water was far less and similar crops could be grown, as an example.
5. Policy reform to address these broad management issues could be seen in terms of regulatory instruments (laws, rules); economic instruments (prices); and participatory instruments (institutions, participatory processes). Many countries were already in the process of policy change, reworking their water law, rethinking water institutions, and rethinking water prices, including Ghana where 60 (Ghanaian) consultants had been working for two and half years on the water issue. Nevertheless, he acknowledged the deeply politicised nature of this reform process, reflecting differences in risk perception, and the rights and sovereignty issues involved.
6. In terms of international waters, the political complexity in finding solutions was highlighted, including the numbers of basins involved (e.g. Mozambique was a downstream riparian on eight international rivers) and the number of states involved (the Zambezi was shared by eight countries). Many river basins in Africa are characterised by poverty, conflict and degradation. This required a shift to growth, peace and sustainability, but in order to achieve this shift important trade-offs were required, including environmental trade-offs.
7.Taking the Nile basin as a case study, he outlined the complexity and magnitude of the issues facing the riparians. Shared by 10 countries, the Nile had a long history of agreement and disagreement. For a state such as Egypt - where 96% of its population live on only 4% of the land [mainly in the Nile valley] - the Nile waters issue was critical. Many riparian countries also exhibited extreme poverty (five of the world's 10 poorest countries were in the basin) and conflicts - either external or internal - were underway in seven of the 10 riparian countries. Added to which rapid population growth was contributing to falling GDP per capita in Sudan and Ethiopia and environmental degradation, such as massive soil erosion, was also a problem. One of the most striking aspects of the current situation was the minimal interdependence between countries, including labour and commodity flows. Water continued to flow, however, creating 'risks' and 'concern'.
8.In approaching this situation he said there were major gains to be had through co-operation. Currently facing either unilateral action (which, he noted, was beginning to happen in some cases) which would perpetuate poverty and cause dispute, possibly even leading to conflict or co-operation for 'win-win gains' and regional development, he outlined the process of working together that had begun. This had started with a vision statement signed by nine riparian states to 'achieve sustainable social and economic development through the equitable utilisation of, and benefit from, common Nile basin water resources'. Following which a complementary programme of action had been designed to 'nurture' the vision of public communication, confidence building and training, and which engaged all riparians in a subsidiary action program. The latter brought riparians together around parts of the basin where there were development opportunities. The riparian-led nature of this process was stressed. Two sub-groups had been established: the eastern Nile (Ethiopia, Sudan and Egypt) which at present was identifying a first project for developing the Blue Nile and the Southern Nile group which had been examining options in energy and improved water supply. David Grey noted a significant shift in the way national media in Egypt and Ethiopia had been reporting on the Nile. Nevertheless, there was a sense, he said, that there would not be an agreement soon because of the complex rights issues involved, although importantly there was now the consent to co-operate and seek ways in which an agreement could be formalised 'at some point in the future'. There was a plan to hold in 2001 a first meeting of ICON, the International Consortium for Co-operation on the Nile.
9.The Bank had outlined its approach to supporting Africa countries and regions in a 1996 management strategy paper on Africa's water resources. A twin-track approach emphasised firstly support to national policy reform, including extensive civil society consultation and quiet facilitation of national dialogue over development; and secondly the establishment of co-operative frameworks on international rivers in partnership with other agencies including the UNDP, UN ECA, the ADB, and bilaterals. Without development of policy at a national level it was hard to engage in international dialogue over river basins, he said. Lessons gained from the Bank's experience in working on African water resources reform included:
- political engagement and commitment ('political instruments') were necessary to achieve substantial change, though technical solutions could ensure gradual progress; additionally, national ownership of the process of change was very important;
- imposing statutory change on customary processes could create difficulties;
- national pricing of water was important, but ensuring safety nets for those who could not afford to pay was equally so;
- achieving a shared vision on the development of international water courses around could provide the basis for political engagement and should be established early in the process;
- riparian ownership of the processes involved and including all riparians in decision making were emphasised as was the need to deal with basin development through the principle of subsidiarity (action at the local, lowest appropriate level, meant lower transaction costs);
- action on the ground, moving quickly to deliver results was also important as was the focus on 'sharing benefits', rather than water.
10.Commenting on the role of international law, David Grey said that international water law had 'led us in the wrong direction' because there was a belief that rights are rights in perpetuity and therefore obtaining rights for future generations was critically important. He identified a need to move away from a rights-based approach to a benefits-based approach ('sharing dollars, not water' as he put it) and in building trust and levelling the playing field on which negotiations took place.
11.Concluding his presentation he stated that there had been too much past mitigation; there was now a need to move from responding to shocks to seeing shocks faced as a consequence of climate variability as part of 'business as usual'. Part of the response to this - as in a diversified stock portfolio - would be the creation of diversified opportunities. There was a growing sense that water would be an important driving force in increasing economic integration in the next 20 years, he said, and current progress being made deserved celebration. Ongoing dialogue on complex issues of water management at civil society, sub-national and international levels, represented a level of dialogue not seen in industrial countries.
12.The discussion which followed began with a question about the 'win-win' scenario. Whilst an appealing slogan, in the case of the Nile, could he be confident that there would be no losers? Win-win situations could be found in the short term, but in the longer term there was the reality of little 'water in the system', he said. Co-operation could lead to some benefits, including better regulation to save water. And some upstream riparians could consumptively use water without in any way affecting downstream riparians. But in the long-term more innovative solutions were required
13.Asked about the question of rational pricing and safety nets, and what did this mean, he stated that there was a potential to mobilise resources so the poor paid a 'rational price'. Citing an example from South Africa where a levy had been used to finance rural water supply and sanitation upstream, he said that in effect urban areas in this case were supporting protection measures upstream with economic benefits for downstream users. There existed, therefore, opportunities to rationalise the pricing of water such that the needs of the poor for access were met whilst overall costs were reduced.
14.On the question of shared vision, were there not upstream loser and downstream gainers? It was not always true that downstream countries necessarily gained, he said. Nevertheless, part of the reason for downstream development was historical - based on the need to organise to mitigate shortages and floods - hence the stronger 'hegemons' downstream. Once this status quo had been established it was maintained. The question was how to share benefits. In the case of Rwanda, the country needed incentives so that downstream countries could benefit from conservation of its watersheds. Very little international law took account of this issue, he said.
15.The question of water as an economic good and policy development as a political good was raised, and that there was a huge difference between 'is' and 'ought' in development. Hence there was a need to look at real politics rather than where we want the politics to go. The water question was intimately 'intertwined' with conflicts in basins such as the Nile, he replied. Unless there is co-operation the 'high case' scenarios can never be achieved. Whilst only 10% of benefits may be achievable through co-operation on the river, this 10% could unlock the 90% of other benefits. There was therefore a need to think 'ought' because with river basins like the Nile there was a need for vision and commitment to trying.
16.The identification of 'two basins' within the Nile basin was a dramatic move forward. Could he expand on the significance of this process? Economics had nothing to do with the two-basin approach, he said. A 'quantum movement' can take place because of political action, for example through the action of a head of state. Asked about the significance of Operational Policy 7.50 in this respect, (which required notification of other states before the Bank would finance development on an international river, and, if objections were raised, then these would be examined and, if sustained, then the Bank would not finance the project), he answered that the directive was clear that if a co-operative framework had been established and riparians were working to find solutions then the requirement for notification no longer existed. In the case of the Nile some were arguing that there was need to modify OD7.50 - seen by some as an infringement on sovereignty - by promoting co-operation that 'negates the need for notification'.
17.Questioned on the role of international law, he stated that few riparians had signed the law on non-navigational uses of international watercourses and he expected 'few to do so'. It would become a customary instrument but not international law as such. The process of reaching consensus on the vision for the Nile had taken three and a half years, whereas the international convention took 26 years to get to the UN General Assembly. Ideas and their application on the ground should define agreements, rather than agreements defining actions, he argued. On the issues of custom and policy reform, he said that it was difficult to get lawyers or governments to take custom seriously, even though the replacement of custom by statute had in many countries resulted in serious degradation.
18.Other questions related to sustainability and environmental liability and mechanisms for dealing with transnational waters. On the latter point he said that there would probably be representations at The Hague on universal mechanisms (perhaps supported by some industrial countries) but he did not think this could work, largely because it would be seen as taking over ownership. Also, where is the apex UN institution for all this? Already there was a 'horrendous' proliferation of institutions.
19. Professor Tony Allan was invited to conclude the session and highlighted the issues of agreeing principles and expecting slow progress on rights raised by David Grey, as well as the emphasis on achieving strong political environments. Much of the presentation, he said, confirmed that ideas coming up in the FFA were widely in currency and approved.
This event focused on the cross-sectoral issues of water resources which underpinned supply and use of water within different sectors.