PSD Blog - The World Bank Group

Corruption in the water sector

Transparency International has just released its annual corruption report, and this year's focus is on corruption in the water sector. Undoubtedly, the 398-page tome will draw a lot of attention to what Transparency International makes clear is a crisis:

In developing countries, about 80 per cent of health problems can be linked back to inadequate water and sanitation, claiming the lives of nearly 1.8 million children every year and leading to the loss of an estimated 443 million school days for the children who suffer from water-related ailments.

Paying for it

There's no doubt that access to clean water is a major problem in developing countries. According to the latest data from the World Development Indicators, only 56 percent of the population of Sub-Saharan Africa has access to an improved water source. Tyler Cowen, an economics professor at George Mason University, proposes what he calls a radical solution in a recent opinion piece in Forbes entitled Pay for It:

The solution for the poorer parts of the Third World is deregulation of the market for piped water, combined with the enforcement of property rights. Yes, I'm saying that Third World governments should consider letting private companies sell water at any price...And no, I don't mean a water concession with a price regulated by the government, I mean true laissez faire in water supply.

Waste: don't just take it away

Born out of a failed methane experiment comes a water-treatment system that uses 90 percent less energy than conventional sewage system and cost 50 percent less to operate. Dean Cameron – the creator of the Biolytix Water – harnessed worms, beetles and billions of microscopic organisms to turn human waste into water suitable for irrigation.

The low cost (a small version for four people could cost $175) and its minimal energy use hold a promise for 2.5 billion people around the world who can't afford proper sanitation. So far there are 3000 biotanks installed in homes and businesses across the Pacific.

Very, very dirty

From the Blacksmith Institute comes the list of the Dirty Thirty – the world's most polluted places. The top 10 spots are mostly industry towns with little viable economic options for its citizens

Conservation gets a second life

If, like most of us, you didn't have a chance to see a panda in the wild, you might want to try this: WWF's Conservation Island - a virtual presence in Second Life. It doesn't quite beat the real thing, but it's fun to walk around the island surrounded by pandas and an (seemingly oversized?) orangutan.

WWF hopes that "Second Life residents will become a community that helps [them] build and develop the island and at the same time learn about conservation in a fun, engaging and interactive way." It's yet another example of the development world adopting web 2.0 technologies.

Perhaps not as engaging, though very useful, is the recently launched World Water tool from the WBCSD. Based on Google Earth, it allows companies to mash water use in their operations and supply chains with datasets of water-stressed areas to estimate their "water risk." It's a useful reminder that water scarcity is an important risk factor for private sector investments.

Designs for the bottom of the pyramid

Find out what makes the Q-Drum, the Lifestraw, the MoneyMaker Hip Pump and the Big Boda Bicycle suitable inventions for 90 percent of the world's population.

In a video, the philanthropist and entrepreneur Paul Polack explains why it's better to sell these items than to give them away.

Everyday life in Aceh: happiness is a full Bak Mandi

When the first drops of rain began to fall, I felt a powerful surge of joy. Our house had not had water in two days, and we were running short. Our well was dry, and not a drop of city water came through the pipes. In vain, my housemates and I turned the pump on, hoping for something. But the taps remained dry and we were beginning to panic.

Water is a serious issue in Aceh, in spite of abundant water available in the province. A lot of the water comes from wells, including water in our office. I can't say I'm a fan of well water – it's usually greenish, and sometimes has a strong sulfur smell (at least I hope its sulfur) and high bacteria counts.

For that reason, my housemates are fans of collecting rainwater. We have large tubs which we place at strategic points around the house when it rains. Rain runs off the roof and we can collect a lot of it when we have a good tropical storm. Rainwater is crystal clear, and tests show that it's safe to drink. There is city water, some of the time. Our house is at the end of the street, so city water rarely makes it all the way to us. According to a friend working in the water sector, over 90 percent of water from the treatment plant disappears before the water reaches the city.

The 2,400 liter hamburger

Did you know that it takes 2,400 liters of water to produce a hamburger? This is revealed in a new initiative from the International Business Leaders Forum to address the emerging global water crisis. It focuses on firms' "water footprint" and claims managing water is part and parcel of managing business risks. There is reputational risk, of not being a good local partner, and the parallel risk of simply running out of water due to poor demand-side management generally.

Business should be a catalyst for adopting water-saving technologies, or processes, not only for good profit-sense but for good neighbor-sense.

Coca-Cola in water: giving back

See the announcement about USAID and Coca-Cola investing directly in nine new water projects in Africa. The Global Environment & Technology Foundation (GETF) is assisting them in implementation. This type of bilateral government - business - NGO arrangement (which cuts out the World Bank Group, by the way) is the type of engagement we love to see. Why?

Well, one reason is that the gap between overseas development assistance (ODA) and developing countries' needs is huge, especially in terms of meeting the Millennium Development objectives, resulting in unprecedented opportunities for private sector to step in.

Secondly, rerouting private sector profits, as well as their local-level business expertise, into developing countries should always be encouraged.

Thirdly, I always say, "let a thousand flowers bloom" in terms of testing different approaches to development partnership. The GETF has, as an NGO, been building bridges between the private sector and development agencies for a decade now, and they may just be the pollen needed to make this (relatively small) initiative successful. Any feedback from others about innovative partnerships in water projects?

Fighting waterborne disease

A new research paper finds that simple hand washing and point-of-use water treatment outperform traditional community-level water provision systems in preventing diarrheal diseases, which kill 2 million children in developing countries per year.

In Africa, where the poorest spend nearly $6 billion a year on drinking water, this growing market has attracted successful point-of-use and other purification models. A Madagascar sustainable local enterprise called Sur’Eau produces a water-sanitizing solution that effectively treats 20 liters – enough drinking water for a family for a day – for less than a penny. Procter & Gamble sells PuR, a dilute bleach product, that at a price of $0.10 per sachet purifies 2.5 gallons of water.

Water: what's next?

So now that World Water Day has come and gone, what is on everyone's mind?  Water supply and climate change?

It is expected that globally there will be more precipitation, and that higher temperatures will tend to reduce run-off. As the patterns of precipitation and runoff change, rain in fewer, heavier bursts will lead to more floods and dry spells. This, combined with less ground water recharge, means that water storage is being touted as a means to smooth water consumption over periods of variability.

Water storage, whether surface water dams or aquifer recharge, is never without controversy.  To complement adding storage infrastructure to counter-act water variability, managing water quality will also become more and more important: i.e. increasing water re-use will 'create' additional water supply in drier areas.

Whereas water quality has been viewed as an "environmental issue" moreso in the past, it is hitting the radar screen as a "water supply" issue more and more. So, look to water storage and water quality to be companion solutions to water in the context of climate change, even if we are all still sorting out the specifics ....

Scarce resource

As the global community observed World Water Day, the atolls of the Marshall Islands ran out of water.

Microfinance for water

It is hard to solve the access to clean water problem through grant aid – the problem is too big. The WaterCredit Initiative has a more scaleable approach. Recognizing the creditworthiness of the poor, it has moved from one-time grants to providing small loans, successfully applying microfinance principles to cover the upfront costs of water systems.

Two reminders

March 22 is World Water Day.

Usha Rao-Monari, from the IFC Infrastructure Department, is joining in the World Bank IFC water debate on PSD Blog.  Comments are open:

• Tracy on new currents in water supply
• Corinne on thinking global and starting local
• Tracy on challenges in water treatment
• Corinne on carrots and sticks for cleaner production
• Usha on the need for investing in water
• Tracy asks "what's next?"

Water for $20 billion

The brand new report The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid quantifies the BOP market for water—3.96 billion people paying an estimated $20 billion annually.

This market is strongly segmented with the poorest - annual income below $1500 - footing over 50 percent of the BOP water bill in Burkina Faso, Cote d’Ivoire, Nigeria, Pakistan, Tajikistan and Uganda. In Nigeria, 22 million of lowest-income households spend $444 million.

Industrial waste water treatment: regulation v. cleaner production - the stick and the carrot

The under-use of existing municipal waste water treatment facilities due to high operating costs is a common problem. Sometimes incentives seem stronger to make a large up-front investment in infrastructure than to actually run that infrastructure and really reap the benefits.

There are similarities in the private sector. After IFC's engineers visit the facilities of prospective industrial clients they sometimes return with stories of well designed waste water treatment plants sitting idle. Maybe the plants fulfilled a permitting requirement when the plant was built? Maybe the plants are turned on a couple of times a year to celebrate the visit of regulatory authorities?

Whilst the optimal solution is stronger regulatory enforcement by the government...

All-or-nothing in water treatment?

During the World Bank's Water Week last month, one topic discussed was "Balancing Brown and Green Interests." Not everyone knew that the "brown interest" is sanitation, including wastewater treatment, and that the "green interest" is environmental sustainability. However, my real surprise was to discover the conflicting interests.

Wastewater infrastructure is a big business everywhere -- the U.S. Environmental Protection Agency estimates that the U.S. alone needs to invest roughly $140 billion over the next 20 years in wastewater treatment systems to meet water quality standards. And, while treatment of wastewater effluent seems a no-brainer...

Start small, stay local - but think big, think global...

Can technological innovation change the paradigm for potable water supply in rural and other underserved communities?

I strongly agree with prior postings - from my perspective water issues have to be governed locally and the more "local" the better. IFC's Cleaner Technologies Group was set up a few years back to invest in companies innovating in cleantech - including potable water supply. One early investment we made in WaterHealth International is a great example of really pushing water supply management decisions right down to the most immediate level of local government - in India that would be the village panchayat.

WaterHealth International has developed a low-cost, low-maintenance water purification solution that can be tailored to a village's needs and run largely by village recruits. This technological innovation has allowed a break-through in terms of...

New currents in water supply

As we head towards World Water Day this Wednesday, we here at the World Bank Group are still mulling over our annual Water Week, held at the end of February. We heard about some emerging issues of importance such as the role of water in climate change adoption, as well as the need to focus more on groundwater as well as water quality. However, in terms of the intersection between water and the private sector, we also took stock of the landscape in water supply and sanitation public-private partnerships (PPPs).

The total number of countries with water PPPs in operation has been growing every year. Sixteen countries have introduced for the first time private sector participation in water since 2000, including Russia. However, 20 countries which had water PPPs have reverted to public-management-only models.

These trends show a more distributed role for public and private actors, as well as for civil society, in the water supply arena. We have been seeing lots of "hybrid" models which work in terms of distributing risks more realistically. Hybrid financing schemes involve the sourcing of financing from both public and private sources, unlike the more conventional private project financings for bulk water and service-level activities.

What else is new in water supply PPP? We are seeing not only...

Clear about water

With World Water Day coming on March 22 and the World Bank Water Week 2007 just over, it is time for PSD Blog to chime in.

This week two experts will bring you some of the latest thinking here at the World Bank and IFC on water issues. What role should the World Bank play in privatization of water utilities? Should IFC pay for high-risk, micro-scale technologies? Is all water worth cleaning?

World Bank’s Tracy Hart, a global technical advisor to trans-boundary water resource management projects, and Corinne Figueredo, from the IFC Cleaner Technologies program, promise to answer these questions and more.

Comments are encouraged and we'll keep the track of the debate here:

• Tracy on new currents in water supply
• Corinne on thinking global and starting local
• Tracy on challenges in water treatment
• Corinne on carrots and sticks for cleaner production
• Usha on the need for investing in water
• Tracy asks "what's next?"

Getting poor customers to bundle themselves

The McKinsey Quarterly's recent article, A Grassroots Approach to Emerging-Market Customers, introduced me to the Manila Water story. This public-private partnership has taken the brave, and often necessary, step in serving low-income consumers: changing their existing business model. From the article (free registration required):

In the Philippines, Manila Water relies on collective billing to ensure the timely payment of bills, employs small-scale entrepreneurs as couriers and pipeline contractors, supports microlending, and brings affordable water to schools and hospitals....

Manila Water devised a game-changing scheme: letting communities themselves decide if they want individual or collective installation, metering, and billing. The company offers three options: one meter per household, one meter for 3 or 4 households, and a bulk meter for 40 to 50 households. Where households band together, the connection fee (ordinarily 7,000 pesos a household) can fall by as much as 60 percent.

The McKinsey piece also describes Globe Telecom, Cemex's Patrimonio Hoy program, and Hindustan Lever's Shakti. A couple of other blogosphere reactions to the piece here and here.

2007: The year of biomonitoring?

The line between the private and the public has increasingly blurred in recent years as the language of rights has framed issues of public goods and public commons. Our understanding of basic human rights has expanded to include the right to clean water, clean air, and more.

The nascent environmental health movement has pushed our boundaries of understanding through the struggles for environmental justice, community monitoring of toxics, wastes and pollution, to endocrine disruption, and to the Stockholm Convention on Persistent Organic Pollutants. It brings people together across race and class and gender lines in a way that few other movements do – the connections being kids, the community, the workplace. Check out, for example, this site.

In September 2006 in California the movement struck another victory – which perhaps in time will provide us with a watershed moment – when Governor Schwarzenegger signed a bill to establish the first statewide biomonitoring program.

Oxfam: still against user fees

According to William Kramer at NextBillion, Oxfam continues to bash private sector approaches to development:

As I read this report, the private sector is seen as the enemy at worst and a wild beast to be caged at best, the profit motive as antithetical to welfare, and more aid as the solution.

Oxfam's new report is In the Public Interest: Health, Education, and Water and Sanitation for All - another call for massive aid flows. One recommendation: Abolish fees for basic education and health care and subsidise water for poor people.

Seems they haven't read James Tooley's excellent essay on (private) slum schools, which puts up a convincing challenge to the idea of free public education as a human right. James won the IFC-FT essay contest, and I'm still hoping he'll join us on PSD Blog one of these days.

Managing public-private partnerships

Public-private partnerships (PPPs) have sprouted like mushrooms after a rain. The trend seems likely to accelerate, as PPPs are advocated in areas as diverse as education, prisons and infrastructure. Governments will ultimately be held accountable for delivery of public services, whatever the contract form. How are they managing these complicated and long-term contracts?

Many countries have organized special units that cut across existing agencies to handle all of a country's PPPs. The arrangements for these so-called PPP units vary by country, and consensus on how they should function has yet to emerge. We're running an online discussion on the topic, based in part on a recent World Bank policy note on the subject.

The policy note describes PPP units in Canada, India, Europe, South Africa, Australia and the Philippines. Managing diverse PPPs is one area where rich countries haven't necessarily advanced much further than developing countries, yet it's important for both groups. So, please join the discussion on whether and how PPP units should be organized.

Appropriate technologies get a boost

Peter Haas and his nonprofit AIDG have an excellent idea to bring low-tech solutions to basic problems of energy, water and sanitation in developing countries. Their first project is a 10-man shop in Guatemala that will build a 40-home microhydroelectric system as part of a UNDP contract. Since the workers are locals, they'll be around to fix it later. Haas envisions a network of self-sustaining businesses that build and repair low-cost technologies. Hats off. Kudos too for the impressive website - complete with blog and volunteer opportunities abroad.

I saw the article in FastCompany just in time, as it seems that Mr. Haas himself will be speaking at the Bank's auditorium today as part of a UN Week conference on Youth, Innovation and Development. I can't make it, but would love to get any comments from staffers that can.

Happy World Habitat Day

Today is World Habitat Day. In 2050, six billion people will live in urban areas. That's two-thirds of the projected population. In 1950, one-third of us lived in urban areas. Wow.

While slum upgrading is important, we must ramp up efforts to prevent them in the first place as the developing world prepares for ever more megacities (with more than 10 million inhabitants). The status quo in water and sanitation delivery, housing finance, public transportation and environmental standards in developing countries will not be able to withstand this exodus from the countryside.

Oxfam report blasts private sector

The title of Oxfam's press release today, Public not private - the key to ending global poverty, sums up the subject of their brand-new report on how to provide health, education and water for the world's poor. From the release:

Rich countries and the World Bank come under fire for undermining governments’ ability to deliver public services by pushing inappropriate private sector projects in water provision and health. The report acknowledges that the private sector has a role to play, along with charities and faith groups, but argues they cannot provide services on the necessary scale, geared to the needs of all citizens, including women and girls, minorities and the very poorest.

...rich countries still spend almost as much on pet food ($40billion) as the $47 billion a year it would cost to meet the Millennium Development Goals on health, education, water and sanitation.

I imagine that we'll see an official response from the World Bank at the annual meetings later this month. My personal, very unofficial response is that the report is absolutely correct - when it says the number of people living without access to these basic services is scandalous. And yes, the best case scenario is that developing country governments step up and meet the needs of all of their constituents. But I disagree with Oxfam's insistence that "meeting the MDG targets on health, education, and water and sanitation would require an extra $47 billion a year." If throwing big piles of money at development problems worked, we would have solved these problems already. Plenty of  big checks have been written that accomplished frustratingly little.

Developing country governments need to improve and become more responsive to the poor. Meeting the Millennium Development Goals will require significant financial and other commitments over an extended period of time. Private sector involvement in service delivery, when done right, can reduce waste, improve government finances and expand coverage. These are not contradictory ideas.

(via The Independent)

Dams and development

The World Bank's lead dam specialist Alessandro Palmieri believes that the Bumbuna hydropower project, in post-conflict Sierra Leone, exemplifies the right way to implement stakeholder involvement in hydropower projects. A new World Bank working paper on The Role of Communication in Large Infrastructure Studies: the Bumbuna Experience finds that “transparency and participation are the best way to avoid criticism and opposition.” The working paper, by Leonardo Mazzei and Gianmarco Scuppa, suggests that lack of communication may be enough to cause large hydropower projects to fail. (Another conclusion I draw is that Italians know a lot about dams.)

The larger, and more frequently debated, question is whether the hydroelectric power generated by large dams offsets the ecological damages they cause. With a few very notable exceptions, is the age of big dams over? Or is a resurgence of multilateral funding for big dams only beginning? The Asian Development Bank has just released an extensive e-paper on dams and development that should provide much fodder for the debate.

The ADB is responding to critics like the International Rivers Network, who argue that the resurgence of major multipurpose hydropower projects is a mistake. For example, the IRN is against plans for a series of dams in Chile. The NYTimes reports on Spanish firm Endesa’s bitter fight to construct several dams in the Patagonia region in Chile. Authors of the IRN report Spreading the Water Wealth: Making Water Infrastructure Work for the Poor advocate small, decentralized and more environmentally sustainable water projects to aid those in poverty. (via Acumen Fund)

Links for World Water Week

In honor of World Water Week in Stockholm, check out this brand-new report from the International Water Management Institute on the relationship between water scarcity, agricultural production methods and global trade patterns. The comprehensive assessment of water management in agriculture gives the following optimistic assessment (and then immediately recognizes the political impossibilities):

Global food trade has the potential to meet all demands without worsening water scarcity or requiring additional irrigation infrastructure. Water-abundant Latin America, Europe, United States, Canada, Russia and Eastern Europe would step up their food production and export food to water-short countries.

Also, head over to Acumen Fund for a post on the role of microfinance in providing access to water. And on the more macro level, Dow recently announced a new partnership with a US nonprofit to promote access to safe drinking water:

The foundation will raise awareness of and funds for clean water projects worldwide through the inauguration of the Blue Planet Run(R), the first-ever global endurance run around the world, sponsored by Dow. Over the course of 100 days, beginning in June 2007, a team of Blue Planet Run athletes will circumnavigate the globe, running 24 hours a day.

Finally, Jay-Z's upcoming world tour will have a water theme. He'll tour countries suffering from water shortages, and MTV will document his experiences in a video diary to air on November 24. (Expect PlayPump footage and references to Bono.)

New reading lists

We've published two new reading lists for your learning/debating pleasure:

• Universal Service and Pro-Poor Infrastructure provides guidance on how liberalizing utility sectors can work in concert with expanding the poor's access to water, electricity and telephony.
• Market Institutions and Economic Growth starts with the literature on New Institutional Economics and goes on to examine the relationships between pro-market institutions, governance, democracy and growth.

(Yes, we know there's nothing by the immensely talented Mancur Olson on the latter list. The reading lists are collections of recent articles.)

Next up for eBay: water rights?

Okay, maybe not quite yet. But in an article on TCS Daily, AEI's Roger Bate argues that trading water rights would be much more effective than the bureaucracies who now decide who gets water and at what price.

The main water allocation problem is the result of Soviet-style management over agricultural water. In most places around the globe, governments decide who gets how much water, when they can use it and often what for, and if they don't use their allocation (regardless of how they use it) they will lose it. Once governmental allocations are made, officials rarely reallocate, even when massive changes in agriculture, industry, mining, domestic and rural demand occur. The result is politically favored allocation and grotesque situations where farmers often pay 100 times less than other types of users, and the poorest in slums often pay 10 times what rich domestic consumers pay, and for unsafe water.

Bate suggests that India and China could learn a lot from Australia’s rights trading system, in which users can trade water access and distribution along Australia’s Murray Darling Basin by going online. Impressive. He also alludes to benefits gained by both farms and the poor in Chile and South Africa as a result of trading water rights.

I look forward to his book out August 14, All the Water in the World. I’d like to see some clarification of how the poor’s needs are safeguarded, as some form of subsidy will inevitably be necessary to meet their daily water requirements. In an auction between farmers and golf course owners on the one hand and city slum-dwellers on the other, it’s obvious that the poor can be outbid pretty easily.

Mixed reactions to DFID White Paper

After an impressive consultation period, DFID released a White Paper with the UK Government’s five-year plan to reduce world poverty. The White Paper, called “Eliminating world poverty, making governance work for the poor”, is loaded with beautiful photographs and emphasizes: increasing aid (to 0.7% GNI by 2013), prioritizing governance, delivering basic public services, addressing climate change, and reforming the international system (UN, World Bank, EU aid).

Response to the White Paper is mixed, predictably. ActionAid broadly welcomes the document but notes "we would have liked to see more about making British companies accountable for their actions overseas." The director of the International Policy Network calls it "a victory for ignorance over evidence and of hope over logic". Julius Court from the Overseas Development Institute (ODI) praises DFID for its boldness. From Court:

The course set out in the White Paper is the right one. Governance is an area where DFID has a comparative advantage.

A summary of the consultation process reads like a finger on the pulse of the development community. The document points out that 35% of respondents mentioned the delivery of basic services, like water and infrastructure, to the poor:

There was much disagreement about the role of the private sector in delivering services. Some of you thought that it should never have a role. Some thought that public private partnerships can work if the right models are used. Others thought that the private sector could and should have a key role in service delivery.

Private sector involvement in service delivery didn’t make it into the white paper, except for a few glancing references to public-private partnerships in health research and infrastructure investment.

Update: The Observer summarizes a long report from British MPs on DFID, private sector development and poverty reduction.

In the UK, Members of Parliament accuse DFID "of failing to understand how business works, despite claiming to put the private sector at the heart of its anti-poverty strategy...Committee chairman Malcolm Bruce, said he was concerned that DfID was taking a 'scatter-gun approach' to its new strategy of private sector development."

The latest infrastructure research

Several new World Bank papers have been published in the last few weeks regarding private participation in infrastructure - for those that are interested:

• The handshake: why do governments and firms sign private sector participation deals? Evidence from the water and sanitation sector in developing countries: The authors find that rule of law and the control of corruption are significant, albeit at a lower level, while the quality of contract law and political stability are not.
• Infrastructure and public utilities privatization in developing countries: Analyzes government tradeoffs between fiscal benefits and consumer surplus in privatization reforms of noncompetitive industries in developing countries.
• The impact of privatization on the performance of the infrastructure sector - the case of electricity distribution in Latin American countries: The authors suggest that changes in ownership generate significant improvements in labor productivity, efficiency, and product and service quality, and that most of those changes occur in the transition period. Improvements in the post transition period-beyond two years after the change in ownership-are much more modest.

Water privatization in the US

Water privatization is not just a headache in developing countries. See RWE AG’s troubles in the US:

Dreams of heady profits evaporated amid heated opposition in places such as this town of 6,500 people, south of San Francisco in California's coastal redwood forests. Today, RWE is in the midst of dismantling an international water empire that cost more than $10 billion to assemble and spanned more than 40 countries at its height.

Water turns out to be less like electricity than RWE had hoped. It's heavy and hard to transport, making it difficult for a big company to build economies of scale. Regulation is never predictable. In the United States, RWE found itself fighting in town referendums and state legislatures across the country, winning many battles but losing the war.

So where does private participation in water stand in the US?

Tradable water permits

New Zealand and Australia are discussing allowing tradable water rights and establishing an economic price for water. For more see this speech or paper. Via EclectEcon and Not PC.

Private participation in infrastructure

The newly overhauled Private participation in Infrastructure (PPI) Project Database has been launched. The World Bank and the Public-Private Infrastructure Advisory Facility (PPIAF) have compiled data on 3,000 infrastructure projects in 150 low- and middle-income countries, covering projects in the energy, telecommunications, transport, and water and sewerage sectors.

View snapshots of various sectors, regions and countries or see a number of different rankings. You can also build your own report using up to 30 data fields. The database spans 1984 to 2004 and includes the contractual arrangements used to attract private investment, the sources and destination of investment flows, and information on main investors.

A few fun facts:

• Latin America (led by Brazil, Argentina and Mexico) has the largest number of PPI projects.
• SUEZ has the most projects worldwide, primarily in the energy and water sectors.
• More than half of the world's top 10 sponsors (by size of investment) are telecom firms.

Drink water to give water

An English company [has] developed a biodegradable bottle for its water AND donates its profits to projects with WaterAid in India and Africa… Belu is a small company founded with a goal to finance clean-water projects around the world. They are part of a growing group of ethical entrepreneurs who are turning their businesses and profits towards having an impact on the world’s problems. Their intention is to generate one million £ profit and spend it on water projects.

Via Treehugger. More on the economics and ethics of bottled water here and here. (Personally, I refuse to buy bottled water just because it's too expensive.)

The day water ran uphill

Cartagena, Colombia provides an illustrative example as to how water and sanitation services can be improved. In a city where part of the population once spent up to US$ 40/day for water, a joint initiative between the local government and a private company brought the price down to US$ 8/month and increased the rate of in-home 24hr water access to 98%.

The trick was a flexible combination of civil society activism and regulation reform that gave birth to a public-private solution to the problem. Today, Cartagena is served by a water system in which the local government “retains the control of the service’s assets and provides all the necessary investment capital” while an experienced private company “has complete control over the management of the service”. For a city where 80% of the population lived in poverty and sanitation-related diseases were so acute that they served as a background to internationally acclaimed books, the long-awaited initiative reveals that creativity, commitment and governance can pay off.

Public policy and serious games

The winners of USC’s Reinventing Public Diplomacy Through Games Competition have been announced. Micki Krimmel has a good round-up. Second place went to Hydro Hijinks:

A class project designed to promote discussion about international water issues and to educate players from around the world about sources of international conflict over water rights.

Relevant serious games we have written about include: Darfur is Dying, CyberBudget, A Force More Powerful, EU Water Game, Food Force, and a Hungarian budget game.

Development Marketplace winners announced

The winners of the 2006 Development Marketplace where announce yesterday. $5 million was awarded to 30 innovative projects that will help communities meet their basic needs for clean water, hygienic sanitation, and access to energy. Winning project ideas ranged from using native freshwater mussels to clean up China’s lakes, to sustainable rooftop rainwater harvesting in India, to elephant pumps in Zimbabwe, and LED lighting in tribal homes in India.

Some notable awards:

• People’s Choice Award: Water is Life, Niger
• Peers' Choice Award: Replacing Biogas for Mass Cooking, Nigeria
• Infrastructure Staff Award: Pro-Poor Sanitation Demand Creation, Bolivia

Global Development Marketplace

On May 8-9 118 finalists will compete for US$4 million in grants at the 2006 Global Development Marketplace. This year's theme, Innovations in Water, Sanitation and Energy Services for Poor People, reflects the commitment to suport and incubate ideas that provide clean water supply, sanitation, and energy services to poor communities in developing countries. Finalist proposals range from solar-powered water filters, to creative methods for rural refrigeration and power generation, to the provision of locally-produced biomass briquettes as alternatives to fuelwood. Come and meet the finalists from 55 countries, and vote for your favorite project! To visit the Marketplace, pre-register for free by May 3rd.

Lessons from the World Water Forum?

During the World Water Forum in Mexico, there was a lot of debate bout public versus private service delivery.  It was argued that private sector involvement has left the poor un-served.  Others argued that the private sector is the best way to move forward.  One thing everyone can agree on is that the poor do not have sufficient access to water and sanitation services. 

One mechanism that can help bridge the "public/private" divide is output-based aid (OBA).  OBA is about using explicit performance-based subsidies to help the poor afford access to basic services.  The subsidies would be for the most part targeted to poorer consumers, and would be paid (through the provider) only after the provider has delivered the agreed output. 

OBA is not a magic bullet -- it does not make a poorly designed project all of the sudden great, nor can it be looked at in a vacuum -- e.g. appropriate risk mitigation instruments, local financial capacity, etc...  However, even governments that are quite skeptical of the private sector have realized that an OBA-type approach can be used to increase private sector involvement to help bridge the affordability gap for the poor, while at the same time increasing the accountability of the provider who receives payment mostly after delivering the service.  OBA is a potentially strong mechanism to deliver aid more effectively and transparently.

The push for nationalizing utilities

The Washington Post reports on the increasing calls for de-privatization in Latin America:

Across Latin America, a growing number of people say the privatization of public services, a movement that swept the region in the 1980s and 1990s, has failed. Protests have erupted over the issue in several countries, and some governments are beginning to reverse these policies. Last week Argentina announced it was rescinding its 30-year contract with the French company Suez and reinstating government control of the water supply.

The article details cases of poor service delivery and the protests that are occurring throughout the Andean countries and Central America. Though some would caution that these anti-privatization movements have short memories:

Clean water, solar powered

Entrepreneurial Tanzanians are combining the ultra-violet power of the sun, black-painted roofs and plastic water bottles to sterilize their drinking water of cholera, typhoid, dysentery and the like.

World Water Day

World Water Day is today. The theme is water and culture. Find all of our water and sanitation related posts here.

Update: Jamal Saghir, World Bank director for energy and water, will be on KQED radio in San Francisco at noon (EST). He will be discussing 'Is water a human right?' Listen live or to the archive when it goes up.

Update: The UN has released the 2nd World Water Development Report.

Drying-up growth

The lack of clean water and basic sanitation that afflicts up to 40 per cent of the world’s population knocks at least $556bn (£317bn, €458bn) a year off the world’s potential economic growth, according to the World Health Organisation, equivalent to about 1 per cent of global gross domestic product.

Via the Financial Times. Meanwhile the NY Times reports on the noticeable hostility towards private management of water resources in Mexico City as the World Water Forum winds to an end.

Update: See 'Water for Growth and Development' by David Grey and Claudia Sadoff.

World Water Forum – Day 3

Katherine Sierra, World Bank Vice President for Infrastructure, in Mexico City this Saturday:

In addition all investment, whether public or private, needs to be supported by robust regulations and monitoring, and designed with the active participation of water users and civil society. Investment, must be safeguarded so every dollar delivers a real benefit. As in development more broadly, principles of good governance and vigilance against the corrosive impact of corruption are essential to delivering real results.

World Water Forum - Day 1

The Overseas Development Institute is in Mexico City for the 2006 World Water Forum and blogging. See their comments and pictures from day 1.

2006 World Water Forum

The fourth annual World Water Forum starts today in Mexico City. Here are the relevant World Bank links. Or take this BBC quiz to see how much you know about water.

Update: Ironically, the overexploitation of subterranean water reserves is making Mexico City sink - faster than Venice. More warnings and criticisms via The Guardian, ABC, and NYTimes.

Bright spots in water privatization

New IDB President Luis Alberto Moreno writes about the current Latin American landscape for water privatization in the WSJ (subscription required). He points out that while the industry’s past has been turbid, this should not cloud the lessons from recent successful private ventures. Among other things, he argues that public-utilities have benefited from private-sector innovation, that low-income areas need not be marginalized by private investors and that a new class of domestic Latin American companies are stepping into the void left by retracting multinationals. He also stresses the importance of small-scale providers:

Small-scale water companies thrive in almost every Latin American country. In Colombia, more than 150 such enterprises provide water and sanitation services under contract to municipal governments. Most of these are small businesses located in remote rural areas. Paraguay and Bolivia have dozens of water entrepreneurs who use their own capital to build networks in communities not reached by public utilities. These providers are succeeding because they offer reliable services at competitive prices with the support of local governments and citizens.