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The elephant in the room

“The 2030 Sustainable Development Goal of true WASH service delivery is entirely within our reach,” argues CEO of IRC Patrick Moriarty in this second of three blog posts. “We’re ready. What’s to stop us? Two big scary words: Government and Money.”

This blog was originally published on www.ircwash.org on 8 July 2014.

The heart of the keynote that I gave at the 2014 WASH Sustainability Forum (as explained in the first blog of this series) revolved around the twin issues of government leadership and government money – which I defined as an elephant in the room – and Harold Lockwood translated into an 800 pound gorilla – for the benefit of transatlantic guests.

I think we can say that the water, sanitation and hygiene sector is ready – possibly for the first time ever – to seriously engage with its aim of achieving universal coverage with services that last for more than 2 billion people. We’re fired up about service delivery, we’ve got the tools and attitudes we need. What’s to stop us? In two words: government leadership and money – or the lack of both.

Six years after we started our ground-breaking WASHCost work, finance – and particularly the part of finance that should come from government, remains our sector’s elephant in the room. Seen but not acknowledged – too big – too scary to engage with.

Take the US $ 1/ person-served/year that our WASHCost work suggests is the minimum benchmark level of investment needed for local government to effectively provide direct support. A figure that is routinely surpassed in Central America – but that we’ve never seen met in Africa. US $ 1/ person/year in a district of 250,000 people means a budget of US $ 250,000 / year. See what I mean about elephants?

Nowhere in the world are water and sanitation services delivered without public investment/public finance. And it’s not just subsidies to capital development – and let’s be honest with ourselves – our sector is almost 100% subsidised for capital expenditure – certainly for everything beyond the household level – the pumps, pipes, drains and sewage treatment plants are all built with soft money.

But it’s also there for the recurrent costs, the post-construction costs: the direct and indirect costs (in the jargon of WASHCost) – the salaries of the sector technocrats who (should) develop policy; the costs of the local government units who (should) develop plans; of the regulators who we all accept should be there.

Let’s be clear – every aspect of WASH service provision in the USA, in the Netherlands, in France, directly or indirectly involves public money and of course this is true in the South as well. It’s just that, in the South, the amounts provided are often wholly inadequate.

The questions that we need to ask, and for which we need to find answers, therefore, is not IF public finance but HOW public finance: how to apply it, how much is necessary (with the clear desire to minimise it)?  Where should the state intervene; what aspects of service delivery should it pay for – and what should it not? Where should user fees come in?  How do we flow money effectively to – and through – local government?  Where is cross-subsidy within a business unit (a utility or city) better than direct subsidy through taxation?  How do we find the balance between the different elements of life-cycle costing (the capital expenditure, capital maintenance expenditure and  operating expenditure, the direct and indirect support costs) and the different sources of finance – the famous three Ts of OECD: the tariffs that users pay – and must and should pay; the taxes that governments provide and the transfers of international development cooperation.

Most of all, the question is how to motivate governments to prioritise WASH enough to start investing in it seriously.

These are the questions with which IRC is starting to grapple – together with partners including Water For People and Water and Sanitation for the Urban Poor.  We don’t have all the answers – but we’re convinced that these answers are critical to getting to Everyone Forever.

In the third and final blog – why we have to stop telling each other fairy-tales about service sustainability.

* Want to know more? Follow this link to the Life-cycle costs approach: glossary and cost components. 

 

One comment on “The elephant in the room

  1. […] Want to know more? Follow the links below to Patrick’s first and second blog in this series: “Tools for life” and “The elephant in the room“. […]

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