Financing water for the world: an alternative to guaranteed profits
2003
D. Hall
This paper assesses the initiatives of the Global Water Partnership and World Water Council, and the European Union to address the question of financing the development and extension of water supply and sanitation in developing countries.The paper argues that both of them give a central role to using donor aid to leverage further funds for investment from private sector water companies. It points out that the latest EUWI paper on financing aims to “use official development assistance as a lever for other forms of finance, including user finance and private finance”, and that the Camdessus Panel recommends stronger guarantee systems for reducing private sector risks, so that the private sector can continue to play a leading role in their development model. Both also give a central role to restructuring water sectors along the French model, to facilitate privatisation; and to full cost recovery.The paper concludes that both EUWI and the Camdessus Panel:overestimate the capacity of the private sectorignore the risks for countries in providing guarantees for private concessions or BOTsfail to address the central role of public sector operation and financeprefer top-down conditionalities to local political decisions on governance issuesThe paper recommends that any global initiative should:respond to plans which have been developed within the countries themselvesprovide mechanisms to make finance both easier and cheaper for public sector providerssupport redistribution of resources, both nationally and internationally, through public finance mechanisms
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