Statement by Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs on Financing Water and Sanitation: The Way Forward
Istanbul, Turkey, 17 March 2009

Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,

It is a pleasure to be here and participate in this important panel discussion on water and finance. My remarks will focus on some of the main challenges we face today in financing the development of water and sanitation.

Although the financing of water and sanitation activities is much like the financing of any other activity, it is also different. Water and sanitation are basic human needs, but access to these services is extremely unequal. Given the high level of poverty in the world, these services cannot be provided through the market in an equitable fashion.

Almost one billion people today lack access to clean water and 2.4 billion to basic sanitation services. Every year, an estimated 1.8 million people die from diahoerreal diseases; 90 percent of them are children under five. Providing access to adequate water and sanitation is a moral imperative.

In keeping with the spirit of the Doha Declaration on Financing for Development of 2008, addressing this challenge will require a blend of domestic resource mobilization, both private and public investment, and international support in the form of official development assistance.

Luckily, thanks to the good background work, especially by the Camdessus Panel on Financing Water for All, we have an indication of the amount of resources needed to meet the MDG Target 7c, namely cutting in half the percentage of people in the world without sustainable access to safe drinking water and basic sanitation by 2015, as compared to 1990.

In particular, we know that total annual investment – domestic plus foreign – in water and sanitation in developing countries, which currently lies between $14-16 billion, would have to rise dramatically. And the level of official development assistance to the water and sanitation sector would have to double, if the MDG target for water and sanitation is to be met.

Regrettably, the data tell a different story. Water and sanitation is not always a top priority for donors or even for public investment programmes. Between 1996 and 2004, the ODA for this sector has actually declined in constant 2004 US dollars from $4.2 billion to $4.0 billion annually. Our advocacy efforts must seek to turn this trend around.

In this regard, we must never fail to remind authorities that this sector provides some of the highest economic and social benefits of any type of investment. Depending on the country, one dollar invested in water and sanitation can yield as much as 34 dollars in economic and social benefits such as health related costs avoided and adult work/days gained from avoided illnesses. Finally, sanitation remains the poor cousin of water, and our advocacy must also seek to redress that balance.

As we address the financing challenge, it is important that we keep in mind the overall policy guidance on water and sanitation already provided by governments and expert panels. I recall here the outcomes on water and sanitation finance of the 13th Session of the Commission on Sustainable Development, which were reaffirmed at the Sixteenth CSD Session. I also recall the 87 valuable recommendations of the Camdessus Panel on Financing Water for All.

CSD-13 recommended, among other things, that countries should resort to the full range of policy instruments in meeting the water and sanitation gap, including regulation, voluntary measures, market and information-based and cost-recovery, provided it does not become a burden to access by poor people. CSD-13 also recommended targeting subsidies to the poor, including for water connection costs.

The Camdessus Panel of Experts made 87 recommendations on water finance, including enhancing sub-sovereign access to finance, decentralizing water services and fiscal relationships, promoting public private partnerships, and adapting financial policies to the needs of the water and sanitation sector. Most importantly, the Camdessus Panel called for the doubling of official aid flows to the water and sanitation sector.

I encourage the Secretary-General’s Advisory Board on Water and Sanitation to reiterate the judicious balance between efficiency and equity, which is highlighted in these agreements and reports, in recommending financing policies and a wise mix of public and private sector involvement.

Ladies and gentlemen, we do know what is needed. We need to find ways to make it happen.

An important way of moving from policy towards action is to ensure water and sanitation issues are mainstreamed in the discussions on financing for development. There is certainly greater room for linking the work of the CSD on water and sanitation, with the follow-up process to the Monterrey Consensus on Financing for Development. Since within the UN Secretariat both processes are located within the Department of Economic and Social Affairs, I look forward to doing my part to help realize the potential synergies between them.

Thank you.