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New currents in water resources management

When Latin America's population was smaller, when few of its cities numbered more than a million people, and when its industries were in their infancy, conflicts over water were relatively infrequent. There was generally plenty to go around. When more water was needed, be it for agriculture, energy, residential or other uses, the solution was fairly simple: build more infrastructure to increase supplies.But Latin America has changed. Its rapidly growing population, burgeoning cities, fast-paced industrialization, and advances in agricultural technology are now straining water resources. The available annual volume per capita is dropping in many cities and in some countries. In Peru, for example, available water has decreased from about 4,800 cubic meters per person in 1955 to about 2,100 in 1990, and is expected to fall to about 1,050 cubic meters by the year 2025.

In South America, estimated infrastructure investments of $100 billion between 1990 and 2025 are expected to increase water withdrawals some 70 percent. The biggest consumer will continue to be agriculture, followed by municipal use and industry.

As different users vie for the same scarce resource, efforts to supply more water to some will mean less for others. As such, investments to increase water supplies cannot on their own solve the region's long-term water problems. Nor can isolated conservation efforts or measures to increase efficiency, though both can help.

A consensus is growing that Latin America and the Caribbean must make a fundamental change in how water is managed, a paradigm shift that has political, economic, social and environmental implications. The countries must replace their fragmented and piecemeal approach to dealing with water resource issues with an integrated management framework. Only in this way can increasingly scarce resources be allocated among groups of users and natural ecosystems so that the region can avoid future conflicts and environmental degradation.

Policy confluence------------------

Change is now the order of the day in Latin America. Countries are redefining what government does and giving more power to the private sector and civil society.

This spirit of reform has given the region's water managers opportunities to test new approaches. Responding to these changes, the IDB is now developing an integrated water resources management strategy that aims to change the way the Bank supports its member countries. Instead of focusing on individual projects to increase water supply, the strategy recognizes that new investments should only be made as part of a comprehensive examination of the social, economic and environmental values of the resource. Moreover, affected communities and the private sector need to participate in making decisions on water resource management.

The process of developing the strategy has included internal and external consultations as a basis for a background document that will provide elements for a strategy proposal to be considered by the Policy Committee of the IDB's Board.

In adapting and promoting new thinking in the area of water resources, the IDB reaffirms its traditional role as a major player in this field in Latin America. The Bank's very first project was for potable water in Arequipa, Peru, and the Bank is now investing nearly $1 billion annually in water-related projects. IDB financing has helped the region's countries to make impressive gains in water supply and sanitation, energy and food production. But the unmet needs remain enormous: only an estimated 78 percent of the region's population has access to safe water, and only 69 percent have sewerage services.

A new strategy must rest not only on dams and aqueducts, but on changes in policies and legislation as well. Many countries currently lack the institutions they need to make integrated water resources management work. Or if institutions do exist, they are ineffective. Hence the aim is not to produce a plan based only on hydrological, engineering and economic analyses, but rather to examine ways of removing institutional bottlenecks as well. The challenge is to change existing institutions so that they can plan and apportion water resources among various user groups in an efficient and equitable manner.

For a number of practical and sometimes political reasons, that is more easily said than done. Existing public entities with expertise in the field are precisely those that have a vested interest in preserving the water use priorities of large and powerful constituencies. It would be unreasonable to expect these institutions to take a neutral approach to allocating resources among the different user groups. IDB technical specialists must consequently deal with the reality that water is first and foremost a political issue.

Independent watchdogs-------------------------------

To help reduce potential conflicts, the IDB strategy advocates the creation of decentralized, autonomous entities that will regulate the application of previously agreed-upon resource allocation policies and mechanisms. Because they act as designated "referees" on previously defined rules, such entities are in a better position to withstand pressures from special interests who could distort the resource allocation process.

For obvious regions, government agencies with a stake in the water sector will not be eager to cede some of their power to the new regulatory bodies. As the IDB background strategy paper observes, "custom, habit, bureaucratic inertia, organization structure, professional specialization and political advantage all weigh on the side of business as usual."

Nevertheless, the new approach has received a good reception from water specialists at recent meetings organized by the IDB in Costa Rica and Trinidad and Tobago. Another is set for later this year in Brazil.

Even as the new strategy is completed, the IDB is helping regional countries to revitalize water management. In El Salvador the Bank is providing technical and financial support to a government program to create water regulatory agencies. A small, densely populated country, El Salvador faces severe environmental pressures exacerbated by serious water shortages. As part of a broad government modernization program that has already lead to a significant restructuring of the energy and telecommunications sectors, El Salvador is now seeking to rationalize water management.

IDB project team members working with Salvadoran officials say the government has a clear idea of what needs to be done to make sure the solution to water management issues is not hindered by natural political turf battles. After water regulatory agencies are up and running, the government will use the IDB financing to strengthen their capacity and to draw up a set of water resource policies that will form the basis for its long-term strategy. IDB loans will also finance the rehabilitation of water supply and sanitation systems.

The IDB's efforts complement a number of other water management initiatives in the region. The World Meteorological Organization is coordinating a feasibility study in 13 regional countries to improve water forecasting. Officials in Argentina and Paraguay are talking about water resource master plans. Costa Rica, Jamaica and Brazil are interested in creating river basin commissions. Peru and Ecuador are discussing the option of privatizing water management. And in Central America, countries are making detailed assessments of the status of water resources and management.

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