THE WORLD BANK APPROACH AND EXPERIENCEWITH INTEGRATED WATER RESOURCES

MANAGEMENTWate rscape s' 9 1 P roceedi ngs

ls I rri gatio n Sustai nable ?

Ulrich Kuffnerl

AbstractSince the beginning of its operations, the World Bank has supported major waterresources projects. lt was also directly involved in country-wide water planningefforts in countries such as Bangladesh, Egypt, Mexico and Pakistan.

World Bank rules and regulations determine internal operations and pro-cesses and specify how Bank funded projects have to be prepared and im-plemented. These rules and regulations deal, inter alia, with international waterrights, dam construction and environmental issues. Specific procedures havebeen developed for the preparation and appraisal of irrigation, hydropower, andwater supply projects.

During the 1980s increasing attention has been focused on the sustainability ofwater development projects, with special regard to technical, economic and institu-tional aspects. Recently, efforts have been initiated to formulate a comprehensivewater resources management policy, integrating the various activities in the watersector.

World Bank Assistance toWater ResourcesDevelopmentSince the beginning of its operations, theWorld Bank supported major water re-sources projects which have always beenseen as imoortant instruments to orovideeconomic and social development. Largewater development projects are usuallybuilt for multi-purpose uses - hydropowergeneration, irrigation, flood control, etc.The Tennessee Valley development in theU.S.A., the Aswan Dam in Egypt, and thelarge dams in Pakistan - Mangla and Tar-bela - are typical examples. They allowedthe generation of hydropower, preventedflood damages and, in the case of thedams in Egypt and Pakistan, provided thewater for large irrigation schemes.

The support of large multipurpose pro-

jects led the World Bank to the support ofriver basin plans, integrating the variouswater sub-sectors and development aspects,that the World Bank traditionally reviewedand analyzed through separate studies ofthe various economic sectors: agriculture,energy, industry and the like.

The next logical step was the promo-tion and support of integrated nationalwater plans, which began in the 1960s andfound wide acceptance in the 'l 970s. TheWorld Bank supported such plans, oftentogether with other donor agencies incountries facing serious water problemssuch as Bangladesh, Egypt, Mexico andPakistan. While these planning efforts con-tributed greatly to the development of gov-ernment and donor investment strategiesand to a better understanding of waterdevelopment issues, critics argue that

1. Principal Water Resources Engineer, The World BankThe views expressed in this paper are those of the author and should not beinterpreted as policy of the World Bank Group

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these ambitious plans which take years toprepare, are often outdated when they arecompleted; they advocate water assess-ments that should be carried out morequickly and more frequently as conditionscnange.

Through its support for and long-terminvolvement in water development plan-ning and investments, the World Bank hasaccumulated considerable exoerience inplanning, financing and implementingwater resources projects. Such experi-ences are reflected in World Bank rulesand regulations, called "OperationalDirectives" that govern the work of its staffand the use of World Bank funds bv bor-rowers.

World Bank Rules andRegulationsVery early, the World Bank realized that inits role as an international develoomentbank, it had to consider international waterrights, so that the interest of all ripariancountries, sharing an international riverbasin are adequately dealt with. The rulesadopted by the World Bank have beenformulated in view of generally acceptedinternational water rights principles. TheWorld Bank recognizes that the cooper-ation and goodwill of all riparian states isessential to the most efficient utilizationand exoloitation of international rivers. Asearly as possible during the preparation ofa project the World Bank advises the stateproposing the project on an internationalriver that it should formally notify the otherriparian countries of the proposed project.The notification has to contain sufficienttechnical and other necessary specifica-tions, information and data to enable theother rioarian states to determine if theproposed project can cause appreciableharm. In case the state which proposes aproject does not wish to give notificationand objects to a notification by the WorldBank, the Bank will discontinue further pro-cessing of the project.

lf other rioarian states have raised ob-jections to the proposed project, the WorldBank staff will have to assess the objec-tions raised, whether the proposed project

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will cause appreciable harm to the interestsof other riparian states or if the projectcould be harmed by the use of water thatother riparian states might make; andwhether the objections are of such a naturethat the World Bank should obtain an addi-tional opinion from independent experts. In

view of the recommendations of the staff andindependent experts the Senior Vice Presi-dent of the World Bank will then decidewhether or how to oroceed. Should the Bankdecide to proceed with the project, despitethe objections of other riparian owners, theWorld Bank must inform those riparianowners of its decision

The World Bank also recognized thatthe design and construction of damsneeded special considerations, and there-fore requires that experienced and compe-tent engineers should be responsible forthe design of the dams and the supervisionof their construction. Because a failure ofa dam can have disastrous consequences,the World Bank is concerned for the safetyand is taking two specific precautions, inadditions to those normally required.

1. A review of the concept and designof dams and associated structuresby a separate panel of experts at anearly stage of design and during finalengineering and construction; and

2. Periodic inspections of dams afterconstruction by qualified inde-pendent experts. To this end, theWorld Bank reouires a covenant in

the Loan Agreement that specifies amaintenance and inspection pro-gram.

Since large water development pro-jects often lead to the inundation of largetracts of land and therefore to involuntaryresettlement of people, the OperationalDirectives of the World Bank describe thepolicy and procedures on this subject andthe conditions borrowers are to meet inWorld Bank financed projects involving in-voluntary resettlement. The objective ofthe World Bank's resettlement policy is toensure that the population displaced by a

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project receives benefits from it. Involun-tary resettlement should be avoided orminimized, exploring all viable alternativeproject designs.

Resettlement olans should be builtaround a development strategy and invest-ment package aimed at improving or atleast restoring the economic base of thoserelocated.

Other Operational Directives of theWorld Bank are dealing with environmen-tal issues, the preservation of soils, faunaand flora, and the preservation of culturalproperties which may be endangered bylarge water development projects. TheseOperational Directives specify the stepswhich have to be taken so that environ-mental damage will be avoided or kept ata minimum. For those working on develop-ment projects, it is often a very difficult taskto balance the demands for rapid socialand economic develooment with environ-mental demands. The environmentalmovement has to be credited that it height-ened the awareness of the imoortance ofpreserving nature, of avoiding drasticchanges with possible ciamages to theexisting conditions.

The World Bank has also developedprocedures for the preparation of irrig-ation, water supply and hydropower pro-jects. These procedures require basicallythat irrigation projects be tested as to theireconomic rate of return which at presentshould be at least 10 oercent: for watersupply projects the projected water de-mand should be satisfied through least-cost project solutions, while hydropowerprojects have to be tested against projectsusing alternative energy sources such asoil and coal, to prove that they representthe more economic solution. While theseprocedures are generally accepted, theydo not provide for an integrated approachto water develooment.

The Question otSustainabilityIn recent years, the World Bank and otheragencies have stressed the importance ofthe sustainability of development projects.Can irrigation schemes be sustainable? Of

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course, they can be sustainable, althoughthere are many examples of irrigation pro-jects that failed. Historically, technicalproblems, especially the lack of drainage,have led to the loss of inigated land due torising groundwater tables and salinity, asin the lower Euphrates Valley in lraq. Butdrainage systems, open drains, tile drainsand lowering the groundwater tablethrough deep wells have been successfulin restoring the productivity of irrigationaffected by drainage problems. Othertechnical problems which more recentlyhave threatened the functioning of irrig-ation schemes are poor or inadequateooeration and maintenance, inadequatewater deliveries, lack of canal clearanceand weeding.

These problems have usually beencaused by insufficient funds, staff andequipment, available to the operating en-tities. Therefore, the question of water ta-riffs and cost recovery has often beenraised. Who establishes water tariffs andwill they be available for operation andmaintenance? Or are they transferred -- asit happens in many countries -- to thetreasury or ministry of finance? These in-

stitutional and legal issues are very difficultand are probably a main reason for sustai-nability problems.

While solutions to these problems varyfrom country to country, increasing em-phasis is today placed on the active partici-pation of project beneficiaries, on their rolein operating and maintaining parts of theprojects, and on reducing the responsi-bility of government agencies to an overallregulation and technical assistance func-tion. Naturally, the complexity of large irrig-ation schemes covering 100 000 ha ormore requires well-functioning agencies --

a complete handover to the farmers maylead to chaos. But a stronger involvementof the farmers has usually been success-ful. Best-suited to be handed over thefarmers themselves are small projects.Not surprisingly the poorest performanceof irrigation schemes has been wherestate agencies were in charge of amultitude of small projects.

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The Need for an Inteqrated.Comprehensive AppYoach'

While the World Bank issued OoerationalDirectives for water related investmentsand established procedures for processingirrigation, water supply and hydropowerprojects, it has not yet adopted an inte-grated comprehensive approach to waterresources management. World Bank lend-ing for water projects is still characterizedby the traditional division or separation ofthe water sector into irrigation, domes-tic/municipal water supply, andhydropower. This fragmentation of WorldBank lending activities mirrors the institu-tional arrangements in most countrieswhere specialized agencies are respon-sible for the various sub-sectors.

When there was little oressure onwater resources, a project-by-project ap-oroach to water resources develoomentwas usually adequate and logical. How-ever, with increasing competition overlimited water resources, the traditional,fragmented approach has become inap-propriate. The competition over scarcewater resources which always existed inarid regions has become widespread be-cause of rapid population growth, urbaniz-ation and industrialization with heavilyconcentrated water demand, and becauseof environmental oroblems. in oarticularprogressing pollution of surface andgroundwater.

The most decisive element is, ofcourse, the population growth, particularlyin the developing countries, which are themain borrowers of the World Bank. Theworld population will rise from the present5 billion to at least 8 billion by the year2025. This growth will not only increasethe water demand of cities and towns, butalso lead to a growing demand for foodsupplies and thus to an increasing demandfor irrigated agricultural production, espe-cially in arid and semi-arid regions that arealready facing water shortages.

The projected population growth willtake place mostly in developing countries,with about 90 percent of the growth takingolace in urban areas where the demand for

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potable and industrial water will be con-centrated. By the year 2000, seventeen ofthe world's cities with more than 10 millioninhabitants will be in developing countries,compared to 1960 when Shanghai was theonly city in the developing world which hadreached that size. This rapidly growingurban population will need a large volumeof water of acceptable quality. Unfortu-nately, the existing water supply systemsoften do not orovide adequate services.

The pollution of water, through un-treated domestic/industrial sewage andrunoff from agricultural areas, is often un-controlled because of a lack of concern orlack of legislation or lack of enforcement ofpollution control legislation, and will thusorevent the use of this water, or requirecostly treatment facilities. Water-bornediseases, the main cause of death of child-ren in developing countries, are still wide-spread, even in urban areas.

In many developing countries, the fin-ancial resources available for investmentsin water resources development are larfrom adeouate. The funds needed forinvestments and operation and mainten-ance in the water sector need up to 20percent of public expenditures in manycountries. In view of the overall slow econ-omic growth and sometimes declining realper capita income, particularly in poor Afri-can countries, many developing countriesdepend on large financial and technicalassistance to improve water management.

Many of the same developing countriesprovide large subsidies to water users,particularly in irrigation, which they can illafford. Furthermore, the debt burden insome countries favours investments withquick and high rates of return and thesework against investments in waterresources with their long gestationperiods. To deal with these problems, it willbe necessary to reduce subsidies and in-crease efficiencies in the water sector. Theintegrated approach to water managementcan play an important role in this respect.Experience in industrialized countries, in

the U.S.A., in France and the U.K., hasshown that comprehensive water resourcesmanagement can, through the cooperation

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of sub-regional water entities, joint plan-ning and water management, risk poolingand combined water quanity and qualitymanagement, lead to substantial reductionof investments, operation and mainten-ance costs.

Recent World Bank EffortsDuring the past year, the World Bank hasinitiated work on multisectoral asoects ofwater resources management to develop acomprehensive approach to water devel-opment. Since there are alreadywell-defined procedures for the varioussubsectors -- irrigation, water supply, sani-tation and hydropower --the work isfocussing on intersectoral issues:

- water allocation between the varioussubsectors;

- institutional arrangements: organiza-tional forms of governmental and pri-vate agencies, legal and regulatoryarrangements; and education andtraining;

- environmental and health asoects:ano

- technological issues, such as hydro-logical data--often def icient in develop-ing countries--; monitoring of waterqualiV; and systems to manage quan-titative and qualitative water aspectscomprehensively.

The World Bank management has alsotaken the first steps to overcome the tradi-tional fragmented approach within its ownorganization by appointing a senior waterresources adviser who is leading thestudies to develop a comprehensive ap-proach, and groups have been formed inseveral departments to work on this task.

Other United Nations agencies havealso been working on integrated waterplanning and management, and efforts areunderway to organize joint water assess-ments in developing countries, assessingcomprehensively the main aspects of thewater sector, to determine issues,strategies for improvements and programsfor:

- technical assistance in water planningand management; and

- investments.

The efforts are, of course, most urgentlyneeded in water-scarce arid countries andregions where some progress has alreadybeen achieved. But all projections indicatethat water shortages will become moreand more acute in many parts of the world,requiring the adoption of integrated com-prehensive policies and actions to preventthe reoetition of water crises which havebeen exoerienced all too often.

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