Improve Management

Finally, improved water management strategies and structures from the local to the international level will go a long way in providing safe drinking water to the world’s poor while also ensuring enough water for industry, agriculture, and the environment. Many experts and policymakers have pointed to privatization as a way to improve efficiencies and service at the local level. However, good governance, firm regulatory frameworks, and strong institutions are a necessary foundation for privatization to work and sustainable management practices to be achieved.

Of the $75 billion spent annually on water services, about 70 percent comes from government, 20 percent from the private sector ranging from small water vendors to private municipal and metropolitan utilities, 13 percent from international donors, and the remainder from the international private sector. Estimates show that current spending will need to double in order to meet current and future demand. With this magnitude of need, the private sector will have to be involved in the expansion of water services through financial backing and expanding technical capacity. Recent attempts to privatize utilities in the developing world have failed due to significant public backlash or unfulfilled contract obligations by the local municipalities. Gordon Binder of Aqua International Partners stated at a conference at CSIS in February 2005, “The business model hasn’t worked for international operators in developing countries. Cost recovery is a laudable yet elusive goal.”

Enforceable regulatory frameworks, stronger institutions, and more participatory processes will provide the necessary environment for corporations, nongovernmental organizations, and governments to capitalize on their core competencies and maximize positive results. Such frameworks and structures are also necessary to improve management of water supplies that cross international boundaries.

Augment Supply

Reduce Demand

Improve Management