WATER P-NOTES ISSUE 8 JUNE 2008 44728 Republic of Yemen Country Water Resources Assistance Strategy Introduction and context Institutional aspects · Centralized governance and fragmentation of This note contains a summary, for practitioners, of responsibility have contributed to lack of ac- the World Bank Report Republic of Yemen Country countability and inefficiency. Water Resources Assistance Strategy (March 2005). The preparation of a Country Water Resources As- · Supply-driven approaches have concentrated sistance Strategy (CWRAS) is timely, given the rising on expansion rather than efficient water use. pressure placed on water resources by the rapidly · Private water markets do exist, but there is no growing population, and the emergence of lessons real enabling or regulatory environment. learned from a recent review of World Bank water projects in Yemen. A decade of reform Since the establishment of the National Water Re- Yemen's water sector: Problems, sources Authority (NWRA) in 1996, and publication goals, and strategies of the influential World Bank report Yemen: Towards a Water Strategy in 1997, a wide range of reform This section looks at the water situation in Yemen measures have been implemented, though with and the recent reforms that have taken place. varying degrees of success. Sector context Key water challenges Factors contributing to the severe water problems in Yemen today faced by Yemen include: This section reviews the current situation in Yemen, Water resources and uses focusing on the five key challenges facing the water · There is no perennial surface water and the sector. country depends entirely on rainfall, groundwa- Challenge 1: Overextraction of groundwa- ter, and flash flooding. ter. Use of groundwater has driven rural growth · Population is growing rapidly and per capita and employment, but has done so unsustainably water availability is declining. and inequitably in a weak policy and regulatory en- vironment. · Market-led irrigation, which accounts for 90 percent of total water use, is drawing ground- Challenge 2: Equitable and efficient valu- water at unsustainable levels. ation and allocation of water. Private water This Note reports key messages and findings from the Republic of Yemen Country Water Resources Assistance Strategy published by the World Bank in March 2005. Readers may download the com- plete paper from www.worldbank.org/water. WATER P-NOTES markets do exist, particularly in urban areas, but are · Integrated management of groundwater, includ- generally informal and unregulated. ing through water markets and a new incentive Challenge 3: Meeting the MDG in potable structure; water and sanitation. Meeting the Millennium · Greater coordination between MWE and MAI; Development Goal (MDG) target of halving, "by 2015, the proportion of people without sustainable · Decentralization of certain NWRA functions to access to safe drinking water and basic sanitation" basin level; will require considerable investment and capacity · Increased investment to attain the MDGs; building, particularly in urban areas. · Encouragement of public-private partnership; Challenge 4: The need to protect water sources and the quality of water. Traditional · More equitable water distribution, including water management techniques have worked well through reform of the tariff system; in Yemen in the past, but a broader approach to · Piloting of integrated packages to assess effi- integrated watershed1 management is now required, ciency of new arrangements; with greater coordination between upstream and downstream demands. · Preparation of strategies for rural water supply and sanitation and watershed management. Challenge 5: Building institutional capacity in the public sector. While Yemen has, impres- sively, created a modern administration in just a few World Bank and Yemen's decades, systems of governance remain weak. water sector Yemen's strategic response Bank involvement to the water crisis In the 1990s, the World Bank's involvement in Ye- men moved away from support for basic infrastruc- Positive climate for change ture to a more integrated, demand management approach. Examples of Bank-supported activity dur- A number of factors have started to create a posi- ing the last decade have included: tive climate for a new strategic focus on Yemen's water sector: · Urban water reform: Sana'a Water Supply and Sanitation Project; · A new Ministry of Water and Environment (MWE), created by the Water Law of 2003, has · Demand-driven approaches: Rural Water Sup- brought most water institutions under one um- ply and Sanitation Project; brella, though irrigation and watershed man- · Basin planning: Support to NWRA; agement remain with the Ministry of Agriculture and Irrigation (MAI). · Improved water use efficiency: Groundwater and Soil Conservation Project; · A national decentralization process will favor participatory and bottom-up approaches. · Macroeconomic level: 1999 and 2002 Country Assistance Strategy processes. · The Poverty Reduction Strategy Paper (PRSP) process has fixed attention on poverty reduction Impact of Bank interventions on and inclusiveness. poverty reduction · A National Water Sector Strategy and Invest- The Yemen PRSP correctly cites efficient and equi- ment Plan (NWSSIP) has been prepared. table water resources management as critical to Key actions in the NWSSIP The NWSSIP is a comprehensive document, and 1The word "watershed" properly denotes the divid- includes detailed proposals on a number of issues, ing line between two river basins, but it is commonly including: applied to a river's upper catchment area. ISSUE 8 · MAY 2008 poverty reduction. The Bank has been more active Proposed Bank program in the urban sector, but could increase the pro-poor impact of its interventions by: The proposed Bank program in Yemen should be · Giving greater emphasis to well-targeted and based on a number of key principles, including efficient rural water supply and sanitation; adoption of a long-term, strategic, sectorwide ap- proach; prioritization of projects that are feasible · Supporting adjustment to a more pro-poor tariff and that further the reform process; and involve- structure in urban water supply; ment of a wide range of governmental and nongov- · Guarding against elite capture in spate irriga- ernmental actors. tion systems and groundwater irrigation effi- Based on these principles, the following is pro- ciency improvements; posed: · Promoting water user associations, especially · A near-term (2006­2008) program for the as a component of integrated approaches to Bank in water, to coincide with the next CAS groundwater management; period; · Investing more broadly in watershed manage- · A longer-term (2008­2015) indicative program ment. to show what long-term issues the Bank should be working on. Changing attitudes to water: The political economy Table 2 summarizes some elements of the pro- gram. Each element would be assessed according of water sector reform to agreed criteria. The chances of the Bank being Stakeholders in the Yemen water sector have a effective are raised by the strategic and selective number of different stances, several of which re- nature of the proposed action plan. quire adjustment to facilitate reform (table 1). Such changes will require time, dialogue, opportunism, incentives, adaptation, and leadership. Table 1. Stakeholder attitudes to water sector reform Stakeholder Traditional stance/interest Change needed Government Subsidized investment in water re- Policy and strategy shift toward cost recovery, sus- source development within unregu- tainability, pro-poor management, decentraliza- lated market economy; supply-side tion; demand-side emphasis emphasis Large farmers Groundwater seen as limitless Recognition of unsustainability of current system bounty, water rights defended Small farmers Increased water rights desired Water user associations, changes in incentives Domestic users Subsidized tap water Accept higher tariffs for improved service Private sector Small-scale provision Facilitating environment for involvement, bringing capital, management skills, entrepreneurship Donors Infrastructure investment, stand- Integrated water resources management, capacity alone projects building, advocacy, pro-poor interventions Nongovernmental Public interest Increased involvement, grass-roots mobilization organizations WATER P-NOTES Table 2. Yemen CWRAS: Summarized elements of Bank program, 2006­2015 Near term Longer term Area of intervention (2006­2008) (2008­2015) Sector governance Agree long-term strategic partner- Agree programmatic economic and sector Continue ship with government work (PESW) Sign memorandum of support for NWSSIP Deliver CWRAS Improve sector governance Capacity building in MWE and MAI, par- Continue ticularly regarding irrigation and watershed management Adjust incentive structure Focus on influencing private investment and Adjustment lending groundwater behavior to support changes in incentive structure Improve resource allocation Public expenditure review of water sector Continue Water resources management Encourage basin management, Continue Sana'a Basin Project Finance watershed integrated pro-poor approach to Support NWRA decentralization management project watershed management Develop community-based model Implement Groundwater and Soil Conserva- Finance project to sup- for groundwater management tion Project port broad community- Support groundwater network for monitoring, based groundwater learning management Develop model for equitable, mar- Support pilot on water markets ket-based intersectoral (rural-urban) water transfer Develop model for self-sustaining Continue Integrated Irrigation Improvement Second phase of proj- spate irrigation management Project ect Water supply and sanitation Urban water supply and sanitation Continue urban Adaptable Program Credit Second phase of APC, (APC) including emphases on Review pro-poor tariff structure private sector involve- ment Rural water supply and sanitation Finalize, implement sector strategy Expand financing through APC with pro- poor focus 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. THE WORLD BANK | 1818 H Street, NW | Washington, DC 20433 www.worldbank.org/water | whelpdesk@worldbank.org