By Harold Lockwood
Well, here we go again. Next week – 11th and 12th of March – there will be another gathering in Washington DC of a range of (primarily) US based Water, Sanitation and Hygiene (WASH) sector practitioners, experts, policy makers and funders to discuss the issue of the day: how to make services more sustainable? This is one in a number of such meetings, but this time we have managed to bring representation and voices from Southern governments to the table which will no doubt help to ground some of these discussions.
The question for me, not for the first time, is will this just be another talking shop with platitudes and nice words but little real change? And if it’s not to be, then what are the key messages people should be thinking about when they take time out from their day jobs to attend such a meeting? As one of those responsible for organising and hosting these two days, preparing for this meeting has got me thinking long and hard about who does what and how these various actors relate to one another, to governments of Southern countries, and to the core business of getting sustainable WASH services to everyone.
Picking up on the theme of my last blog, I’m hoping that we’ll be able to encourage all those attending to really think about the nature of ‘development aid’ and how they and their organisations relate to broader processes of development of the national WASH sectors in the countries in which they operate.
There’s such a wide range of organisations all working under the broad umbrella of improving the WASH sector; first and foremost national governments in the South and users. Then we have the huge development banks, bi-and multi-lateral government aid orgnisations, through to the large International NGOs and foundations with a global reach to smaller (sometimes tiny) foundations, NGOs, charities and private sector contractors. And of course there’s the newer breed of charity which sees the free market as a solution in the form of patient capital.
These organisations and the people in them (including me) are driven by a range of incentives, from professional ambition, to religious or ideological interests to viewing the development or charity business as just that, another business.
However we see it, we all have a role to play in what we call aid – but which the public in many of our countries often calls ‘charity’. Many of us are coming to Washington DC next week. But with so many players and so many angles to aid or charity in providing sustainable WASH services, what are the relative strengths of our different types of organisations and what should our roles be in this question of supporting sustainable WASH services?
Who supports what?
In the words of the great — and recently ‘re-discovered’ — Sixto Rodriguez, let’s take a look at the cold facts. This should be easy, but as many of us know, facts and evidence are often relatively thin on the ground in our sector. One stream of evidence that is instructive, and relatively easy to get a handle on, is finance: who is paying for what in WASH?
Firstly, as many of us may be aware, governments are the biggest funder (other than users themselves). Data from a recent World Bank – AFD report from 2010 indicates that over one half of all (7.6 billion US$/year) expenditure for water and sanitation is financed through the public sector. However, that is total expenditure on the whole sector. Further analysis by the Public Services International Research Unit, looking just at capital expenditure (paying for new infrastructure) found that official development assistance (money from development banks, bi- and multi-lateral donors) is more significant than public spending (by about 15%).
So, governments pay for more of recurrent and donors for more of capital investment. And it is the recurrent costs that really matter here – for example, we know from recent WASHCost research findings that the recurrent costs for small scale, or ‘basic’ water supply systems, over a twenty-year life span are in the order of two to three times that of capital investment.
However, it’s important to understand that buried in these macro figures are important differences. Most important of which, is that for low-income countries, the contribution of aid to capital investment is even greater — much greater in fact, about three times as much per year as the public sector. The top ten country donor contributors over a five year average period are shown in the graph below, using data from the OECD
These are figures for official development aid and are relatively easy to access. Figures for spending by NGOs are much more difficult to find and can be confusing as a lot of bi-lateral aid can be sometimes channelled through NGOs and others. OECD figures do not include funding from charitable foundations.
The USA-based WASHfunders.org collects information about charitable foundations (grant-making institutions) in the USA and gives us an idea of the relative order of magnitude financing per year. The data from their research brief shows the following:
|Year||Total all US Foundations|
|2003||US$ 5 million|
|2004||US$ 6 million|
|2005||US$ 11 million|
|2006||US$ 81 million|
|2007||US$ 122 million|
|2008||US$ 97 million|
|2009||US$ 73 million|
|2010||US$ 72 million|
(Source: Foundation Funding for Water, Sanitation, and Hygiene, March 2012, Foundation Center)
This figure from WASHfunders.org shows relative financing with yellow bubbles representing bi- and multi-lateral funding, while the purple ones are foundation funding (relative size of the bubbles are not to scale in terms of funding levels)
What is the point being made by this muddle of different data and various references to financing? Of course, it’s often tricky at the best of times to get these figures right, to avoid double counting and follow the thread, especially as funding is channelled through different organisations such as INGOs or private sector companies – but there is no avoiding these order of magnitude differences. The irrefutable cold fact here is that it is national government and user tariffs that provide the lion’s share of financing over the long term, followed by the major lending banks and bi-laterals. Even non-OECD funding (China and the other BRICS) is relatively small for WASH, except in (resource) rich countries where there are obvious geo-political interests.
Even allowing for data collection errors and gaps in the information, it is clear that charitable foundations taken together represent a relatively insignificant level of investment, and certainly do not have the kind of mandate or leverage of some of the other players. The same would be true I am sure for Europe – we are talking tens, possibly a hundred million dollars per year at most as oppose to the billions invested by others.
Back to Washington D.C.
So coming back to thinking about what this means for the various groups that will attend the sustainability forum next week: what are the implications of this and what are the messages that I’ll be bringing with me? Big spending power doesn’t automatically equate to better interventions, but there are differences between what these actors can and can’t do in practice.
For the likes of the World Bank, other development banks and major bi- and multi-lateral donors to the WASH sector, I will be challenging them to use their unique positioning, official mandate and ‘big bucks’ to make a much stronger push for sector reform, institution building and a focus on the delivery of permanent services, particularly for rural areas. There have been a lot of valuable lessons from the urban sector around improving formal utility performance over the last two decades that can apply here.
It is time to be much bolder. Why should poor rural and peri-urban people have to live with shambolic and sub-standard services? Several times in the last few years my colleagues from the Triple-S initiative and I have gone to argue this case at the World Bank, the African Development Bank and other centres of sector influence. And of course, the people we meet there, being good sector professionals, recognise the problem well. However, some – but by no means all – simply shrug their shoulders saying: ‘well, it’s our government clients who ask for these type of loans for the rural sector and at the end of the day, we don’t really have any power beyond the end of the loan agreement period’. In essence, justifying or explaining lending programmes that are still based on the ‘build it, run away and hope’ model. This is akin to a retail bank manager agreeing over and over again to a loan for someone with a half-baked business plan, that he knows won’t work; this would not be tolerated on the high street (main street that is), so why for rural water and sanitation?
The Banks and the major bi-lateral donors have a seat at the sector high table, they have influence and leverage over governments and sector change processes; they are core partners and share a mutual accountability with them. So the ask here is to push harder on the issues that we know matter most such as sound maintenance regimes, proper asset management, funding for long-term capital maintenance and replacement; and to push governments to improve their own monitoring and regulation. We know that a number of these big players are already working on these issues, but they must do more to improve investments in the sector, particularly for the rural sub-sector.
For the smaller foundations and NGOs attending the forum, it is time to reconsider. They need to ask themselves whether their work as currently implemented is sustainable, or indeed taking place at a scale to make a difference? What happens when the systems they’ve created fall into disrepair? What are the implications of working directly with communities and by-passing local governments who are struggling and under-resourced – and that are often undermined by the ‘gifts’ that suddenly appear with entirely different tariff schedules, management arrangements and so on? Acknowledging the admirable desire to help, and the right of people to spend their money as they see fit, I will at least be lobbying these organisations to be more aware of other ongoing efforts in the areas where they intervene – especially of sovereign governments – and to align themselves as best they can with these.
The larger international NGOs should, in turn, also take a long hard look at themselves and where they sit in this equation. Unless the country in question really is a failed state or has completely ineffective government, should they really be laying a role in direct provision of services? Or should they rather be working with mandated service providers to work through problems, find innovative solutions, and test models that work?
All of us should think ahead and look to the future. As Robert Picciotto (King’s College, and former Director General, Evaluation, World Bank) implies in his excellent talk on the country led paradox to M&E: many of us are missing the point – it is ultimately public sector investments and improved public administration systems that will make the difference for support to and regulation of services such as water and sanitation, especially at the level of decentralised or local government. As low-income countries grow economically and develop, this will increasingly be the case.
So for all of us, but especially NGOs, we need to re-evaluate our roles, particularly our relations to government (local and national). My feeling is that the best approach in the medium term will be to stop building stuff as a direct service provider and rather, where we continue to build at all, to do so as an innovator and builder of capacity. Another excellent way to influence the WASH sector of the future is to support emergent civil society watchdogs and pressure groups who can monitor and advocate to government from the outside, as well as to strengthen government itself (through parliamentary audit or oversight groups for example). A case in point is the work of WASH Advocates, an organisation that advocates towards the US government and increasingly is seeking to raise the capacity of similar advocacy groups in developing countries too.
Another alternative role for the smaller foundations and NGOs – and one that we are actively seeking to fill ourselves through our work in Triple-S – is to provide the space and conditions for innovation and learning, but in cooperation with government and other sector stakeholders by creating in-country ‘innovation labs’. These could focus on rigorous testing of new innovations and solutions, from the adoption of technology and telemetry, to novel financing instruments such as insurance schemes for financing of capital replacement.
I am sure we will have plenty of good debates and discussions next week – and change never happens on the basis of just one meeting – but I do hope those attending will think hard about what they are doing, why they do it and what they can do differently to make sustainable water and sanitation services a reality in the countries that need it most.