In the current financial crisis, risk-weary investors worry more about keeping their own boats afloat than in pumping money into a sector noted for high upfront costs, long pay back periods and low rates of return.

©Oswaldo Rivas/Reuters

Water, is as essential to human activity as air. When cities or societies neglect water, they face collapse. The discussions and analyses emerging from the current economic crisis focus on what went wrong, how to stop the downward spiral, and how to create a better society in the future. But one thing is missing in all the talk of short-term stimulus packages and developing “green growth” economies and that is water.

A Check-list for Public Action has been developed by the OECD and its partners to assist governments considering engaging with the private sector in the water sector. It is organised around the OECD Principles for Private Sector Participation in Infrastructures–some 24 principles grouped under five points that highlight sector-specific features, government considerations and available tools and practices:

©Reuters/Atef Hassan

Water is a growing challenge for all countries, and a fresh, more coherent approach to tackling it is now needed.

Secretary-General Angel Gurría argues that "advancing on the issue of water will help us move forward on almost all the Millennium Development Goals" (Editorial, in No 256, July 2006). We agree, and would like to draw your attention to the Working for Water programme (WfW) in South Africa.

Click to enlarge. By StiK, especially for the OECD Observer.

The private water sector is larger than many people think, with thousands of businesses working every day, for the most part, to implement government policies. Are those businesses doing enough and how might they do more?

As the ocean covers three quarters of the surface of the earth, little wonder people see it as a possible source of freshwater. That basically means desalinating it to make it at least clean enough for agriculture and even good enough to drink. How does it work? Distillation is the cheap option, responsible for most desalinised water, but a newer filtering process using membranes, called reverse osmosis, now accounts for nearly half the world’s capacity to turn ocean into freshwater.

In Mexico, 80% of the population lives in relatively dry and hot areas and subterranean resources are being slowly exhausted. Access to water is increasingly becoming an issue in some of the most active and industrialised parts of the country. Yet, says the OECD’s 2004 review of regulatory reform in Mexico, rapid demographic growth and industrial development have increased the overall demand for water.

Most public debate about water concerns freshwater. Yet coastal zones are coming under increasing pressure, too. Time for renewed action. 

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Achieving the Millennium Development Goal on water should not only require extension of access, but proper maintenance of existing infrastructure, too. It is a long-term challenge.

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Both consumption and pollution of water by agriculture are becoming serious concerns. Yet, water resources can be used much more efficiently in producing food and fibre, while minimising pollution and supporting ecosystems. How to achieve this depends on mindsets and societal goals, as well as institutional systems and structures. And that means government.

©OECD/Nguyen Tien

This is my last editorial for the OECD Observer before I step down as secretary-general in May 2006. Nevertheless, I will focus on the future, rather than dwell on the past. That is not to say that we should ignore John Maynard Keynes’ advice that we should examine the present, in light of the past, for the purposes of the future. But sometimes the present and the future cannot draw many useful lessons from the past.

Every Thursday at noon the Tribunal de las aguas (water court) meets outside the cathedral in the city of Valencia along Spain’s Mediterranean coast. For more than a thousand years, it is believed, the court has ruled on disputes affecting the irrigation of the arable lands known as huertas, which nourish the lemon trees, the oranges and other crops that give this region its distinctive scents and flavours, and for many, livelihoods as well.

A key Millennium Development Goal agreed at the 2002 Johannesburg summit on sustainable development is to halve the numbers of people in developing countries without access to safe water and basic sanitation.

Putting together a water financing and management strategy requires looking at a range of questions. The most important one is, can we afford it?

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When it comes to water, as with most environmental problems, it is easy to overemphasise the failures.

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Improving access to clean water at all, let alone halving the number of people without access, will not be easy without at least some help from private business. Attracting investment is only part of the challenge. 

Click to enlarge. Image by Rob

Civilisation was born with water. Water is indeed the basis of life. Yet mankind has not been wise enough to live with water. Time has come to act, and that is why Japan will be hosting the 3rd World Water Forum and an International Ministerial Conference in the Kyoto region, cradle of Japanese civilization since more than 2,000 years ago.

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Water pricing is becoming more widespread, with the dual aim of expanding supply and encouraging more responsible use.

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Water aid is an important part of official development assistance, but it has declined. Moreover, the way it is disbursed and targeted leaves room for improvement. 

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To most people, water is a public good, like air. Yet in practice, its proper management and distribution raise inherent challenges of allocation, which is where economic principles can help. Supplying water costs money. Moreover, though a renewable resource, it is fragile and can be spoiled.

Growing enough food to feed the world depends on water supply. The challenge can be met, though there are conditions. 

Microbial pollutants of water are a major source of health and economic problems the world over. Scientific methods are being developed to trace pathogens and make water cleaner, though it is an uphill struggle. 

Cover No 236, March 2003

The OECD might not be thought of as playing a role in water supply and management, but in fact it has a leading role, as it does in all areas of sustainable development.

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