A view from Pretoria

A view from Pretoria on the world establishment's water agenda 
 
(Pass it on if you like...)

It's that old question again: is Pretoria trying to break or to shine the
chains of global apartheid? The cheeky term, which was banned from the final
communique at the WSSD, is used below to describe the world's water
situation. This paper is something water affairs director-general Mike
Muller is presenting -- e.g., yesterday in Brussels -- with a strong
anti-privatisation message, believe it or not:

"the aggressive push by international water and financial interests for
private engagement has been working to their ultimate detriment. The
pendulum is swinging against too great an involvement of private sector.
Resistance to private engagement is the result, in part, of the obvious
failure of private initiative to address the core challenge of the unserved.
There is a vital role for private expertise and resources in providing water
services. Unfortunately, if that role is literally forced down the throats
of potential beneficiaries, they often choke. If we do not want to give
credibility to those who describe private sector engagement as
neo-imperialist expansion designed to boost profits of the rich world's
service industries, we must demonstrate that it is the product of rational
institutional decisions designed to achieve public objectives."

That's a nice acknowledgment, for those of us anti-imperialists seeking
credibility in Pretoria, Ottawa and Washington, eh. Actually, it's mainly a
tribute to the activists in Accra, Atlanta, Buenos Aires, Cape Town,
Cochabamba, Durban, Johannesburg, Manila and so many places inbetween who
have opposed water privatisation so successfully.

However, the paper is also full of sophistry. After the quotes are my
UPPERCASE interpretations: 

Patrick Bond - pbond@sn.apc.org

...

Sanitation progress has been much slower, reflecting in part the low
perceived priority of sanitation provision which hardly featured in pre-1994
surveys of community aspirations and expectations of government (SURE,
THAT'S IT: BLAME THE VICTIM FOR LOW TAKE-UP ON MULLER'S NEOLIBERAL PIT
LATRINE INSTALLATION POLICY, BASED ON NEOLIBERAL COPAYMENT PREMISES THAT
MEANT VIRTUALLY NO TOILETS WERE BUILT...)

A cholera outbreak in KwaZulu-Natal in 2000 highlighted the importance of
improved sanitation (and hygiene) if the health benefits of water supply are
to be fully realised. Sanitation is now a national political priority. (THIS
SPIN DOCTORING DIVERTS ATTENTION FROM THE FACT THAT WATER CUT-OFFS -- WHICH
IN A JUST SOUTH AFRICA WOULD BE DECLARED UNCONSTITUTIONAL -- WERE AT THE
EPICENTRE OF THE EPIDEMIC.)

The major challenge is to establish social consensus around the idea of free
basic services and the corollary of payment for higher levels of service.
(IN REALITY, THE MAJOR CHALLENGE IS TO STOP SYSTEMIC BUREAUCRATIC SABOTAGE
OF FREE WATER, INCLUDING HALTING THE ONGOING EPIDEMIC OF WATER
DISCONNECTIONS DUE TO UNAFFORDABILITY, AND IN THE PROCESS TO REJIG SA'S
URBAN TARIFF SYSTEM DRAMATICALLY.)

(THEN THERE'S A BIT OF SELF-CRITICISM WHICH IS LONG OVERDUE.)

In this context, South Africa is encouraged by the EU's constructive
approach to funding of the water sector in South Africa and elsewhere.
(HAH. NOT ONLY HAVE THE EU GATS SUBMISSIONS -- LEAKED LAST WEEK -- MADE
CLEAR THEIR 'AID' AGENDA, THE EU DONORS LIKE HOLLAND WERE THE ONES SCREAMING
LOUDEST AGAINST THE FREE BASIC WATER POLICY WHEN IT BECAME THE RULING
PARTY'S POLICY IN SEPTEMBER 2000.)

I GUESS IN THE WHOLE SCHEME OF THINGS, THIS PAPER REPRESENTS PROGRESS...
THOUGH VERY TELLING IS MULLER'S FAILURE TO ADDRESS DISCONNECTIONS, PRE-PAID
METERS, CROSS SUBSIDIES (DEMAND SIDE MANAGEMENT INSTEAD OF EXPENSIVE SUPPLY
ENHANCEMENTS), AND THE CONCRETE IMPLICATIONS OF SUBSIDY SYSTEMS... THESE ARE
FOR FUTURE STRUGGLES, BUT AT LEAST AT KYOTO, PRETORIA'S NORMAL ROLE IN
AMPLIFYING AND LEGITIMISING INTERNATIONAL NEOLIBERAL POLICIES MAY BE
SOMEWHAT LESS APPARENT THAN WE'VE SEEN THESE LAST FEW YEARS, SAY, IN
SEATTLE, DOHA, MONTERREY, OTTAWA, JO'BURG, GENEVA, WASHINGTON, ETC ETC...

Patrick...

***

Water 2003 : What should be done

Lessons from Johannesburg and pointers for the future

Mike Muller

Director General

Department of Water Affairs and Forestry

South Africa


Summary

The Johannesburg Summit has given us a clear mandate to achieve certain
goals. We need to understand the challenge and move rapidly to outline and
implement our strategy to achieve them. We should start by acknowledging key
lessons from Johannesburg.

The first lesson is that basic water and sanitation goals can be met and
that there can be a role for all partners, public and private, domestic and
foreign, government and civil society.

The second lesson is that business as usual will not achieve the goals. We
need to acknowledge the constraints and review the paradigms within which we
work..

The final lesson is that, as with sustainable development in general, we
will not achieve the water goals in isolation but as part of a broader
development process. We have a responsibility as water sector to understand
the issues and identify the opportunities to address them.

These key areas are:

- governance and institutions at all levels

- the financial framework

- the trade and investment environment

When we present our programmes of action in Kyoto, aside from the sector
specific interventions, we must highlight the areas outside the water sector
in which we will require progress to be made and outline the actions to be
taken to resolve them.

***

The Johannesburg Summit provided a clear mandate for today's meeting. And in
this presentation, I am going to use the word "we" a lot, to include all
those who are committed to achieving the very basic goals which were
underwritten by our Heads of State at the Millennium Meeting of the United
Nations and expanded at the World Summit on Sustainable Development in
Johannesburg earlier this year.

We need to understand the challenges with which we have been presented and
move rapidly to outline and implement strategies to address them. And, to do
this, we should start by acknowledging a few key lessons from Johannesburg
for which it may be useful to draw on what my compatriots and I sometimes
refer to as South Africa's "world in one country" experience.

The Water and Sanitation Goals can be met

The first lesson is that basic water and sanitation goals can be met and
that there is a role for all partners, public and private, domestic and
foreign, government and civil society in the process.

South Africa provides a useful example, on water supply at least. The South
African government has provided infrastructure to ensure a basic water
supply for over ten million people since 1994 and is on track to realise the
goal of water for all by 2008. Putting infrastructure in the ground is of
course only the first step. There must be an adequate budget to operate it.
In this context, South Africa's "free basic water policy" is one of the
first systematic efforts in the developing world to give effect to the idea
of a "right to water" in a sustainable way. Central to this, institutional
arrangements are being put in place to operate and expand the infrastructure
through new local governments which were elected in December 2000 and are
still in their infancy.

Sanitation progress has been much slower, reflecting in part the low
perceived priority of sanitation provision which hardly featured in pre-1994
surveys of community aspirations and expectations of government. A cholera
outbreak in KwaZulu-Natal in 2000 highlighted the importance of improved
sanitation (and hygiene) if the health benefits of water supply are to be
fully realised. Sanitation is now a national political priority. This is
critical for the successful implementation of a household based programme.
It is assisted by government's general policy of maximising the social
impact of infrastructure investment which is encouraging the kind of
community based approach that has been shown to be successful at a smaller
scale.

South Africa's programmes are led by national government and implemented by
local government but involve the private sector in various guises, as well
as NGOs and the beneficiary communities themselves. The legal framework
gives communities, through their local governments, the flexibility to
implement the service provision option of their choice. So there are a few
full private sector concessions (which have met with mixed success) as well
as engagement with the private sector in the more traditional fields of
design, construction and outsourced management of specific elements of the
water services such as billing and collection and plant management. There is
a range of interesting "public-public" partnerships and attention is
currently being given to ways in which Community Based Organisations can
formally undertake service management, particularly in small, relatively
isolated rural communities.

The capital programme for which I am responsible focuses on the situation in
the rural areas with a relatively static population. Service expansion to
address population growth focuses on the urban areas where the major
metropolitan areas are able to fund most of the infrastructure as well as
the water resource development required to supply it. Service provision here
is associated with broader housing programmes and the development of
"township" infrastructure. The major challenge is to establish social
consensus around the idea of free basic services and the corollary of
payment for higher levels of service.

Business As Usual Will Not Achieve Our Goals.

If the South African experience highlights that with motivation, management
and money, the goals can be met, the second lesson from Johannesburg is that
business as usual will not achieve our goals. Specifically, some current
accepted wisdom needs to be challenged, notably, the requirement that users
must pay the costs of their services.

In the international development debate, this position has been backed by
evidence that

- people are willing to pay for their services; and

- people are paying (often to formal or informal private providers).

The first issue is that peoples' stated intent often reflects neither their
ability to pay nor their subsequent intentions. I have personally been in
many meetings where communities have undertaken to pay for the ongoing
operation and maintenance of the water scheme we are offering to finance.
The subtext to the dialogue runs, "we understand that we will not get the
infrastructure unless we agree to this condition. Fine. We want the
infrastructure and will sign on the dotted line. But we will come back to
discuss the operational financing once the infrastructure is in the ground."
And they do, and so would you in the circumstances. Quite often, where they
can, they pick up the responsibilities. But too often, it was found that if
the "no payment, no access" line is held, people resort to other,
unacceptable water sources because they simply cannot afford to pay; it was
such cases that led the South African government to introduce its "free
basic water policy".

Secondly, while we know that in many urban areas in particular, people are
paying informal private providers for their water, and often paying a very
high price per litre, we also know that they are usually not getting what we
would consider as an acceptable minimum service for health and dignity.
Further, what they are paying is in many cases not enough to enable such a
minimum service to be provided.

This is hardly surprising. The costs and complexities of providing a water
service are usually greater in poor third world cities than in their first
world counterparts. Construction and maintenance is more difficult and
therefore expensive in poorly defined and maintained housing areas. Cost
recovery and credit control is a greater challenge in poorer communities.
Needless to say, the cost of capital is higher. The sourcing of adequately
protected raw water is often a greater challenge. Only labour is cheaper and
labour costs are usually a relatively small proportion of the total cost of
delivering water services. Meanwhile, household incomes may be as much as
100 times lower than developed world households while per capita consumption
is only 10 times less.

This is why South Africa has said - and we are pleased that it is beginning
to be reflected in the international discourse - that while cost-recovery is
a vital element of water supply financing, affordability must not bar access
to basic services. Certainly, if we are to achieve the Millennium goals -
which by definition means targeting the poor - we cannot accept as an iron
rule that the poor must pay for their services. Now this is heresy and many
will point out that the principles which I have just torn up have been
internationally agreed in places such as Dublin. Here we need to be a little
self-critical and this sets the scene for the final lesson from
Johannesburg. The fact is that, to date, the international water debate has
been largely driven outside the formal multi-lateral system and the key
conclusions reflect largely the views of the donor community.

This is not to say that there has been any malicious process at work. On the
contrary, many people have engaged with the substantial challenge of
improving water supply and sanitation globally with the best of intentions.
One of the reasons that the policy diktats have not been challenged more
strongly is that they have indeed reflected the best that can be achieved in
the current circumstances. But, if we are to be successful, we have to
change the context and that leads us to the third lesson from Johannesburg.

Public finance to end Global Apartheid

The final lesson is that we will not achieve the water goals in isolation
but as part of a broader global development process. We have a
responsibility as water sector to understand and engage the broader issues
and identify the opportunities to address them. To start with, we need to
acknowledge the constraints and frameworks within which we work in the very
different societies to which the global goals direct us.

Again, the South African experience is explicit and useful. While the
apartheid policy was in place, huge populations remained unserved. With
apartheid overthrown, it has not been difficult to address the consequent
backlogs. South Africa's inequalities are justifiably famed and well
documented but the advantage of being a relatively well-off, albeit horribly
unequal, middle-income country is that, when the balance of power changes in
their favour, the needs of the poor can be met.

But what does this mean for the broader global community ? Most of the
global backlog does not occur in middle income countries which are able to
redistribute between rich and poor.

It is trite that there is more than enough money to meet basic minimum needs
in water and sanitation. We must not be distracted by that mind-boggling
US$60 - 160 billion annual additional financing which was claimed to be
needed by the water sector. That wrong number was deliberately introduced to
misdirect the debate. It includes the funding needed for the far higher
levels of service required by successful Third World cities and was used to
highlight and promote the potential role of the private sector, a vitally
important but separate discussion.

Unfortunately, that number has distracted us from the critical issue of
addressing the basic needs of the poor which is what we are mandated to do
here, by WSSD and more generally by the Millennium Declaration.

The additional cost of meeting the basic needs of the poor by 2015 is
actually a more feasible amount, perhaps US$10 billion annually. This is
eminently do-able. But how do we mobilise the funds? In public finance
terms, what South Africa does is straightforward. Given the inherited
inequalities, the redistributive use of national tax revenues to fund
investment in basic needs infrastructure and its operation is appropriate
and efficient. The Constitution provides a framework in which local
government has the duty to provide basic services and national government to
provide the financial and other support and to monitor progress.

But what is the framework and what are the options at a global scale ? It is
at this point that the lessons from Johannesburg become most challenging.
President Thabo Mbeki repeatedly referred to "global apartheid" during WSSD
and we need to ask, what is the global equivalent of ending apartheid in
South Africa ? This goes well beyond the scope of today's meeting. The
Finance for Development process and related proposals for the reform of
international financial governance are central; so too are the WTO's Doha
and GATS negotiations; even the financial framework for enlarging Europe is
relevant since it will impact on agricultural trade and rural incomes;
underlying all this is the ongoing review of global governance.

It is at this point that the bizarre WSSD debate on whether we should have a
global sanitation target begins to make sense. Aside from the fact that it
was a useful negotiating chip, it appeared that the US government feared
being led into a set of global financial obligations. It has been suggested,
by organisations such as the Canadian-based Centre for International
Sustainable Law, that acceptance of such targets might bring with it certain
obligations. And I believe that the truly shameful debate about sanitation
targets was really a reflection of the bigger development debate about the
principle that with international rights go international responsibilities.

In this context, South Africa is encouraged by the EU's constructive
approach to funding of the water sector in South Africa and elsewhere. By
agreeing to budget support approaches, the right mechanisms are being
applied. In the language of regional public policy, the asymmetry of
subsidiarity must go both ways. So, yes, decentralisation may be the best
option for the operational management of water services (and aid budgets).
But, to finance basic water supplies in poor communities, greater
centralisation is required to achieve reliable funding flows. That means
centralisation of funding to the appropriate level which, in a world deeply
divided between rich and poor, means to regional and global institutions.

For a more formal global public finance system to emerge, recipient
countries will also have to change the way they do business. They will have
to put in place management structures and the usual boring checks and
balances of accountability, external as well as internal. In Africa at
least, the framework for this is emerging through the NEPAD process and the
establishment of the African Union.

Conclusion : Choices, GATS and Ways Forward

The Johannesburg Summit has reconfirmed the challenge of the Millennium
Declaration and put us on the path of action. To go forward, we need to know
where the people we want to reach are, and also to ensure that, in each
case, region by region, nation by nation, state by state, we know the
policies and strategies adopted to address their needs. We will have to
identify the gaps and propose interventions to close them but, most
importantly, we will have to support effective programmes in the many places
where these have already started.

Recognising that local implementation is key to success, we must recognise
that providing reliable financial resources from the global level will be
equally important. But there are other challenges.

One is the vexed role of the private sector in water service provision. This
important issue is separate but linked to the Millennium challenge since
substantial funding flows, which should go to the poor, are intercepted in
favour of the less poor. Meanwhile, the aggressive push by international
water and financial interests for private engagement has been working to
their ultimate detriment. The pendulum is swinging against too great an
involvement of private sector. Resistance to private engagement is the
result, in part, of the obvious failure of private initiative to address the
core challenge of the unserved.

There is a vital role for private expertise and resources in providing water
services. Unfortunately, if that role is literally forced down the throats
of potential beneficiaries, they often choke. If we do not want to give
credibility to those who describe private sector engagement as
neo-imperialist expansion designed to boost profits of the rich world's
service industries, we must demonstrate that it is the product of rational
institutional decisions designed to achieve public objectives.

I would suggest two initiatives that might help. The first would be for
donors and lending agencies to cease making private sector involvement a
pre-condition for water sector support. Respect the fact that most
governments and communities are seeking to meet their water service needs
and help them to make sound choices, their own choices. In particular, we
should allow them to make their own decisions on service provision options.
Given a strong focus on basic water and sanitation needs, we may well create
conditions in which more appropriate - and more successful - private
intervention can be developed.

Related to this, the second initiative would be for the OECD countries,
their companies, preferably both, to call for water services to be taken off
the table in the GATS and related trade negotiations. This would help to
make the point that we are serious about achieving the global objectives and
not just pursuing our trade objectives under a benevolent guise.

This relates to the final point. We will not solve the water services
challenges within the current development funding framework and should not
be shy about stating the obvious. So we need to acknowledge - and
communicate forcefully - that if progress is not made on reforming this big
framework, or appropriate mechanisms established for the water sector at
least, we will not achieve our water service goals.

We must design programmes of action that will achieve our goals not
programmes that are doomed to fail before they start. We must assume we will
receive the support we need and plan accordingly. This is not irrational
optimism. There are good reasons to believe that we are at a juncture at
which new approaches are possible.

At the outset, I defined "we" as all those who are committed to achieving
the very modest water goals underwritten by our Heads of State during the UN
's Millennium Meeting as expanded at WSSD. I will go further now and say
that it is those who are prepared to stand up in their individual
communities, governments and societies and take a stand for these goals,
take a stand for the resources and reforms necessary to achieve them, even
where that stand may not be a popular one. If we do this, we can go to
Kyoto, with some semblance of confidence, we can present programmes of
action that have a reasonable chance of success. That, at the least, is what
we should be aiming for.