WATER P-NOTES 48728 ISSUE 40 JUNE 2009 Making the Most of Scarcity: Accountability for Better Water Management in the Middle East and North Africa M ost of the Middle East and North Africa The Historical Development (MENA) cannot meet current water demand. of the MENA Region's Water Many countries face full-blown crises, and the situation is likely to get even worse. Estimates Management show that per capita water availability will be cut in half by 2050, with serious consequences for aqui- In most MENA countries, water policy has under- fers and natural hydrological systems. Demand for gone three phases. water supplies and irrigation services will change as · The first phase evolved over millennia, as soci- economies grow and populations increase, with an eties across the region grew while adapting to attendant need to address industrial and urban pol- the variability and scarcity of water, developing lution. Some 60 percent of the region's water flows elaborate institutions and complex structures across international borders, further complicating that spawned some of the world's oldest and the resource management challenge. Rainfall pat- most accomplished civilizations. terns are predicted to shift as a result of climate · The second phase emerged in the twentieth change. century, as governments increasingly focused on The social, economic, and budgetary con- securing supply and expanding services through sequences of these challenges are enormous. huge investment programs as their populations The supply of drinking water could become more and economies grew. The region's rivers are the erratic, necessitating greater reliance on expensive most heavily dammed in the world in relation desalination technologies, and increasing drought to the freshwater available, water supply and would require emergency supplies brought by sanitation services are relatively widespread, tanker or barge. Service outages would put stress and irrigation networks are extensive. Low-cost on expensive network and distribution infrastructure. drilling technologies make it possible to tap into Unreliable sources of irrigation water would depress aquifers on a massive scale; as a consequence, farmer incomes, economic and physical dislocation the MENA region uses more water than it would increase with the depletion of aquifers and receives each year. unreliability of supplies, and local conflicts could · The third phase is just starting, as governments intensify. All of this would have short- and long-term and the public realize that supplies are reach- effects on economic growth and poverty, exacerbate ing their physical and financial limits and that social tensions within and between communities, a switch toward comprehensive water manage- and put increasing pressure on public budgets. ment is imperative. This note highlights important information from the 2007 World Bank MENA Development Report Making the Most of Scarcity: Accountability for Water Management in the Middle East and North Africa, the fifth in a series of World Bank reports on the MENA region. Readers may download the complete document from www.worldbank.org/water. WATER P-NOTES This new approach emphasizes the entire water Yet these efforts have not yet led to the cycle rather than its separate components. It uses improvements in water outcomes that were antici- economic instruments to allocate water according pated, and resource management remains a prob- to principles of economic efficiency and systems lem in most MENA countries. Along with water that have built-in flexibility to manage variations in resource scarcity, there is a scarcity of organiza- supply and demand. Technical and policy changes tional capacity to get water to the right place at to the water sector are also needed: planning that the right time and a scarcity of accountability for integrates water quality and quantity and considers achieving sustainable outcomes (see figure below). the entire water system; demand management; tariff reform for water supply, sanitation, and irrigation; Water is still allocated to low-value uses even strengthening of government agencies; decentral- as higher-value needs remain unmet. Service out- izing responsibility for delivering water services ages for water supply services are common, even to financially autonomous utilities; and stronger in years of normal rainfall. People and economies enforcement of environmental regulations. remain vulnerable to droughts and floods, over- extraction of groundwater is undermining national assets, and environmental problems related to Impediments to Managing water impose heavy costs. Despite the region's huge investments in piped water supply, many countries According to the Water Cycle experience poor public health outcomes compared to other countries of their income level. Public The MENA region is home to some of the world's spending on water could be far more efficient. best hydraulic engineers. They manage sophisti- Many countries subsidize services for which consum- cated irrigation and drainage systems and have ers are able and willing to pay, reducing incentives spearheaded advances in desalination technology. to improve services. In addition, many countries Cities in the region have shifted from direct provi- often invest in large water resource management sion of water supply services to regulation of ser- and resource mobilization schemes that do not vices provided by independent or privately owned bring the expected economic returns or for which utilities. Farmers have begun managing irrigation cheaper alternatives exist. infrastructure and water allocations. Governments have established agencies to plan and manage Most countries have not yet tackled the most water at the level of the river basin and ministries important reforms because they have proved politi- that manage water resources, staffing them with cally untouchable. Powerful groups benefit from well-trained and dedicated professionals. subsidized services or existing allocations of water, Figure 1. The Three Levels of Scarcity Scarcity Solution Potential outcome Scarcity of accountability · Efficient allocation · Water allocated to highest-value use for achieving sustainable · Transparent, inclusive · Allocation system responsive to variations of outcomes decision-making supply and demand · Access to justice · Environmental issues properly considered · Equitable allocation and service provision Scarcity of organizational · Integrated planning · Sustainable public investment capacity · Effective regulation of · Reliable services service providers · Demand management Scarcity of physical resource · Engineering, infrastructure · Efficient storage and distribution · Water technology · Supply augmentation Source: Authors. 2 ISSUE 40 · JUNE 2009 and those who would benefit from reforms-- water outcomes. Increased trade in agricultural farmers, environmentalists, and poor households products, new policies that govern social protection on the edges of cities--have not been able to form or agricultural price support, reforms of banking effective lobby groups. The strain on public finance and insurance, and the development of telecom- has not always been apparent, as the deferral of munications and information technology could all maintenance on infrastructure, the fragmentation of have important effects on water outcomes, directly water districts into several subsectors, and nontrans- or indirectly. Social changes such as urbanization, parent budgeting procedures have all masked the increased education levels, and the empowerment true costs of failing to reform. This situation is exac- of women also play a role, affecting the nature and erbated by the fact that the benefits of reform tend type of water services people want, the priority they to accrue over time, whereas the costs are imme- give to environmental protection, and their ability to diate. The absence of major economic or natural communicate their needs to the relevant authorities. resource crises, such as fiscal crises, droughts, or The potential for reform can be turned into reality if floods, has inhibited the development of sufficient public accountability mechanisms are in place, and public pressure to face the social, economic, and the benefits of change are widely distributed. political difficulties that reform entails. Water management is financially, socially, and Additionally, policies that deal with agricul- environmentally sustainable when three underlying ture, trade, energy, real estate, finance, and social principles are part of the planning process. First of protection affect overall economic diversification all, it is important to recognize that reform decisions and often have a greater impact on water manage- are inherently political rather than merely techni- ment than policies championed and implemented cal. This makes it imperative to know the political by water-related ministries. For example, cropping dynamics of reform, analyze where the politics choices are a key determinant of water use in agri- might be changing, and sequence reform activities culture (which accounts for some 85 percent of the accordingly. Next, non-water policies need to be region's water use), and these choices are more considered and non-water decision makers need a function of the price farmers can get for their to be involved in water policy reform. Finally, there crops than the price of irrigation services, which are must be an emphasis on the accountability of gov- typically a very small share of costs. The price of ernment agencies and water service providers to the agricultural commodities is, in turn, determined by public. Governments and service providers must see a range of non-water policies such as trade, trans- clear consequences for good and bad performance. port, land use, and finance. Transparency is essential to ensure that people know why decisions are made, what outcomes are expected, and what is actually achieved by reforms. Opportunities and Lessons for a This implies inclusiveness, too, as stakeholders must Future Unhindered by be involved in decision making. Water Scarcity Solutions need to be specific to each country or basin context, yet certain actions can help improve The factors driving the politics of water reform in the climate for reform. Promoting education about the region appear to be changing in ways that the multi-sectoral aspects of water management, represent a potential coalition for reform. A few with a particular focus on the region's water chal- former opponents of reform have identified eco- lenges, is one such action. Another is to invest in nomic opportunities from trade, tourism, and other data collection and tailor the data to the needs of sectors that require a change in water services policy makers from different sectors, since making for which these groups are willing to pay. New sensible policy requires technical information on groups are forming, such as environmental lob- water balances and water quality. For instance: bies, and new constituencies for water reform are growing within governments, too, as finance and · Ministries of finance are more likely to push for economic ministries begin to assess the full costs of reform if they have accurate information about the infrastructure and services they maintain. Sev- the efficiency of public spending on water. eral countries are implementing or contemplating · Trade negotiations lead to better water out- reforms outside the water sector that could improve comes if negotiators know how different crop- 3 WATER P-NOTES Figure 2. Total Actual Renewable Water Resources per Capita in MENA 3,500 year 3,000 per 2,500 2,000 1,500 inhabitant 1,000 per 500 3 m 0 Iran Iraq ebanonL unisiaT Bank Libya Arab Syria Egypt Algeria Gaza SaudiArabia Qatar Morocco Djibouti Oman emenY United uwaitK estW Jordan Bahrain and Emirates Arid Hyper-arid Transboundary water Source: FAO AQUASTAT. ping scenarios might play out in terms of water fied economies are likely to give governments more resource use. political space for the reforms necessary to improve Some countries in the region have already water management. Economic diversification and achieved promising results by following these prin- growth could lead to more employment opportuni- ciples. In Morocco, the King, the Prime Minister, ties outside agriculture, and allow the region's farm- and the Ministry of Finance have all become cham- ers to consolidate and concentrate on high-value pions of water reform. Several countries (Algeria, crops. By importing a larger share of food needs, Egypt, and Yemen) have begun explicitly addressing countries could release more water into the environ- non-sectoral audiences and presenting analyses that ment, reducing pressure on aquifers and maintain- show the impact of poor water management on the ing basic environmental services and sustainability. economy. Many countries have improved account- (See the figure below for a regional perspective on ability and stakeholder involvement, incorporating availability of renewable water resources.) users in planning and service delivery decisions as The MENA region can meet its water manage- well as by collecting and publishing data on water ment challenges. Coping with scarcity in a context outcomes. of rising populations and economic expansion Water need not constrain economic develop- involves difficult choices and painful changes. Yet, ment and social stability in the MENA region. the steps taken recently in several MENA countries Household, commercial, and industrial water uses demonstrate that the choices can be made and represent only 10 to 15 percent of a country's change can happen. Placing water reform in the water needs, with agriculture and the environment context of political economy and working within the accounting for the rest. Almost every country of multi-sectoral nature of water management makes the region, therefore, has sufficient water to sup- reform possible, and these reforms can generate ply its population with drinking water, even given beneficial economic, human welfare, environmen- burgeoning urban populations. Strong and diversi- tal, and budgetary outcomes. The Water Sector Board Practitioner Notes (P-Notes) series is published by the Water Sector Board of the Sustainable Development Network of the World Bank Group. P-Notes are available online at www.worldbank.org/water. P-Notes are a synopsis of larger World Bank documents in the water sector. 4 THE WORLD BANK | 1818 H Street, NW | Washington, DC 20433 www.worldbank.org/water | whelpdesk@worldbank.org