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Water and the Fight Against Poverty

Forum Barcelona 2004 & Green Cross Dialogues on Water for Life and Security. Session 3: Water Uses and Development, 1 June 2004.

Keynote Speech by Klaus Toepfer, Executive Director, United Nations Environment Programme

Water and the Fight Against Poverty

People who live without access to clean water, or who have no access to adequate sanitation, are, almost invariably, the poor. They are caught in a vicious circle. Their poverty denies them the basic necessities of clean water and basic sanitation. Their lack of these necessities condemns them to continued poverty.

Poor people pay vastly more—between ten and a hundred times more per litre—for water and sanitation services than their wealthy neighbours . More than farmers, more than industrialists, more than you and I.

Not only do the poor pay more in financial terms. They also pay more in terms of physical effort—whether it be queuing at a standpipe in a city slum, or walking for kilometres to collect water from a rural well or stream. That cost is usually borne by women, who could be more profitably employed, or by children, who should be in school.

The poor also pay an enormous price in health costs caused by the absence of clean water and adequate sanitation. The Water Supply and Sanitation Collaborative Council states that: “At any one time, more than half the poor of the developing world are ill from causes related to hygiene, sanitation and water supply.”

Lack of clean water or adequate sanitation kills 1.7 million people a year. Ninety per cent of them are children. Diarrhoeal disease alone kills six thousand children every day. Infant mortality in low-income countries is over 13 times higher than in wealthier countries.

These statistics represent major roadblocks on the path to sustainable development.

The connection between water management and poverty featured at the 1992 Rio Earth Summit, at the 2002 World Summit on Sustainable Development, in the Millennium Development Goals, and at three World Water Forums, the most recent of which was held in May 2003.

At the World Summit in Johannesburg in 2002, a commitment was made to halve, by 2015, the proportion of people living without adequate sanitation, and also to halve, by the year 2015, the proportion of people without access to safe drinking water—which is a reaffirmation of the identical Millennium Development Goal.

These targets are vital in and of themselves, but are also crucial if we are to meet the other WSSD and Millennium Development Goals, including reducing child mortality, combating malaria, eradicating extreme poverty and hunger, empowering women, and improving the lives of slum dwellers.

The issues of water, sanitation and human settlements, with poverty as a strong subtext, were also the focus of the recent meeting of environment ministers in Jeju, Korea, for the UNEP Governing Council and Global Ministerial Environment Forum. There, the delegates adopted the Jeju Initiative.

The Initiative is a summary of rich discussions that took place over the three-day conference on how to accelerate action to address environmental decline, particularly in the areas of water, sanitation and human settlements.

A key feature of the discussions, which appears as an appendix to the Jeju Initiative, was the exchange of examples of partnerships and best practices that identify practical measures and workable approaches based on actual experience.

Three priorities for water

Achieving sustainable use of water resources and the equitable distribution of the benefits that accrue from them depends on good governance, backed up by good science, implemented through good management, and supported by adequate finance and institutional capacity.

Good governance is perhaps the most important requirement for solving problems of freshwater and sanitation. Governance includes policy, management, legal frameworks, institutions and their associated decision making processes. An essential element is political will.

Governance is a particularly important and complex issue with respect to shared water resources, especially across international boundaries. Examples such as the Southern African Development Community’s shared waters protocol and associated joint river basin programmes, which improve the development and management of water resources, can help reduce poverty by promoting the environmentally sustainable use of water resources for sustainable economic development. They also reduce potential for conflict over shared water resources.

The UNEP Atlas of Freshwater Agreements shows how the issue of shared water resources is generally a spur to cooperation rather than conflict. However, the potential for conflict remains. The implementation of existing regional and international agreements, including the United Nations Convention on the Non-Navigational Uses of International Water Courses is therefore vital.

Increasingly important is the negotiation of agreements on rivers where no agreements exist. Such agreements make the integrated management of river basins easier to achieve.

Integrated river basin and ecosystem management improves environmental services, and the lives and livelihoods of the people who depend on them. It is essential for the sustainability of water resources and all the services they provide.

Crucially important is the maintenance of upstream habitats—especially forests— plus riparian zones, wetlands, floodplains and estuaries.

Another essential component of the good governance package is community participation.

Water security and the adequate provision of water and sanitation are more likely where the whole community—including the poor and the marginal—has a meaningful say in the management of water resources and the provision of water related services.

Poor people and communities—especially women—need to be consulted about the most appropriate solutions to their needs (instead of having solutions thrust upon them which may not be suitable because, for example, they are difficult to operate or repair).

UN-HABITAT’S report Water and Sanitation in the World’s Cities includes many examples of successful partnerships between local authorities, the private sector and community-based groups. However, major investors are still rarely interested in investing in small-scale projects at neighbourhood level.

The investment question

The amount of aid currently allocated to low-cost water and sanitation programmes is abysmally low. The Organisation for Economic Cooperation and Development reported in 2000 that only 1.7 per cent of all sector-allocable aid is earmarked for this purpose. Most of the money available for development is for large-scale projects of $100 million or more.

Yet, for instance, perhaps the most cost-effective investment for public health—and therefore for poverty alleviation—is simple education in basic hygiene practices. This reduces mortality more than just the provision of safe water or sanitation alone.

The Water Supply and Sanitation Collaborative Council and the Global Water Partnership have estimated that meeting the Millennium Development Goals on water coverage could require between $14 and $30 billion dollars a year on top of the roughly $30 billion dollars already being spent.

However, the dividends should be vastly greater. For example, according to the UK Department for International Development a 1991 cholera epidemic in Peru cost that country’s economy $1 billion in combined emergency health expenditures and lost revenue from exports and tourism.

There are a number of ways of financing the investments needed in improving water and sanitation services—international and bilateral funding, debt relief, privatization schemes, community-level resource mobilization, and so on. What is important is that investment solutions must benefit developing countries in the long-term, address the needs of the poor and be consistent with the environmentally sustainable management of water resources.

In particular, there must be coordination between donors. Therefore, the development of national water strategies by developing countries, and the importance they give to them in their national development plans, are crucially important.

At the grassroots level, it is imperative that financial institutions open their doors to communities to enable them to implement water, sanitation and hygiene projects. The work of micro-credit banks, and an initiative UNEP has in southern India for buying down the cost of investing in renewable energy technology, for instance, are interesting templates for this approach.

Then there is the question of privatization. Selling water utilities and contracting out water revenue collection can have advantages—such as improvements in service delivery, improved revenue collection and financing for expansion.

But there are also disadvantages. Developing country utilities sold in a poor management and financial state are worth much less than if their management is efficient and they are in a good financial state.

Furthermore, privatized or commercialized utilities require regulation. Sophisticated regulatory authorities to monitor privatized water utilities do not exist in most developing countries.

A suggested preferred approach for donor support is to help improve the management of developing country water utilities. Improved revenue streams can then finance service delivery and infrastructure improvements, enhance the environmental sustainability of water supply and use, and improve the delivery of clean water and sanitation to the poor.

Focusing on what works

As already mentioned, the sustainable use and equitable distribution of water resources, depends on a number of interlinked factors including good governance, good science and good management.

Many conferences have been held over the years on freshwater issues. Similar conclusions are reached and similar solutions proposed. The tools are available, the technologies have been developed or are in development. But the problems are worsening—in our ever-expanding cities, in rural areas, in rivers, lakes and groundwater aquifers.

We need to focus on getting existing tools, techniques and technologies implemented. We need to focus on what works—which was one of the messages that came out of Jeju.

We need to particularly address the issue of the wasteful and unsustainable use of irrigation water in agriculture, which commands the lion’s share of available freshwater resources—over 70 per cent globally—and which in many cases wastes 60 per cent or more of the water it uses. Agriculture’s inefficient use is leading not only to water scarcity in many areas, but to Stalinization, soil degradation and desertification—all major contributors to poverty and obstacles to sustainable development.

We also need to address the issue of the waste of water in urban areas. For example, in African cities up to 50 per cent of the population—the poorest, of course—lack adequate water supplies, and 60 per cent lack adequate sanitation. The figures are similar for urban Asia. Yet, up to 50 per cent of the water supply is wasted through leakage or is otherwise unaccounted for.

The technology and associated management techniques already exist to remedy many of these problems. The transfer of appropriate technology and the application of accepted management practices are therefore vital.

The need for good management

A key reason why so many people lack access to clean water and sanitation and why water is used in an environmentally unsustainable manner is the lack of integrated water resources management capacity.

Most water crises in the world today are caused by poor water management.

A key management issue regarding water and sanitation that is proving to be most controversial is the issue of water pricing.

It is generally agreed by most people working in the development or environmental field that a key tool for achieving the sustainable use and management of water resources is water pricing that signals the true costs of the services they receive, with the proviso that the poor majority receive a basic needs supply at a price they can afford.

Currently, agriculture’s use is frequently heavily subsidized, while the poor pay too much—financially and in terms of health and labour.

The over-use of water resources can be curbed by demand management approaches that include improved irrigation practices, less-water-consuming crops (especially in water-scarce areas) and more efficient industrial processes. Weighted pricing structures, and the withdrawal of perverse subsidies, can encourage all these things—without harming the poor.

Recent developments in international law related to the polluter pays principle—such as the United Nations Economic Commission for Europe Joint Protocol on Liability and Compensation and the draft Environmental Liability Directive passed by the European Parliament in May 2003—provide a solid foundation for further development of this essential tool for protecting the environment and the poor.

Progressive pricing: an equitable solution for all

The question remains: how do we supply the poor at a price they can afford?

A practical solution that helps achieve the sustainable and equitable management of water resources is progressive pricing.

Progressive pricing means charging more per unit the more water is used, consistent with the cost of supply.

A basic needs amount of water should be sold at a low price, subsidized if necessary, so that poor people can afford the minimum needed for a healthy existence. Increasing levels of consumption are charged for at progressively higher tariffs which reflects the increasing cost of supply.

This provides an incentive for more efficient water use. The money saved can then be re-invested into supporting the uptake of water-efficient technology by larger users (thus alleviating the perceived financial burden of paying for the true cost of the resource) and spent on improving services for the poor—a win-win situation for the poor, for industry and agriculture, and for the environment.


Principles that need to be reflecting in designing solutions include good governance, good science and good management, supported by adequate finance and institutional capacity.

We need to manage our water resources wisely, using integrated management principles based, where appropriate, on international cooperation.

We need to meaningfully involve those without adequate water supply and sanitation in planning and decision-making, and increase financing for all water and sanitation supply solutions.

We need to improve the management of water utilities to generate secure revenue for their improvement.

And we need to reform how water is valued and priced, so that it is not wasted, but treated as the precious, indispensable resource that it is.