June 18, 2004
Reform of institutions in poor developing countries is needed if infrastructure projects to provide water and waste disposal are to work, the World Bank has warned in a report called: "Responsible growth for the new millennium," reports Agence France Presse.
The report said that an increase in investment in projects to supply clean water and provide sewers and treatment plants would not have any beneficial effect if it were not accompanied by institutional reforms in the countries receiving aid. In the world today 1.5 billion people do not have piped drinking water and 2.5 billion people do not have the use of lavatories or sewer systems, the report, published late on Wednesday, said.
On the pricing of water supplied, the report commented: "Tariff-setting must include subsidies to the poor. But advocating free water for all means no water for many ... Water pricing is an essential instrument to enhance financing sustainability. A rural water program in China had been effective in connecting about six million households to supply and sanitation infrastructure. "Users pay operating costs and debt service, effectively raising their overall contribution (to the total cost) to 75 percent. Households are metered and a strong incentive system ties the salaries of operations staff to monthly bill collections."
However, the report also said that some past methods of designing infrastructures in poor countries by experts without taking account of local practices often no lasting benefits. "Spending money on infrastructure without investing in social marketing and support will not achieve the desired health or environmental gains. Why? Because behavioral change is essential. So, sanitation and hygiene programs require long-term commitment -- not just investment. Ultimately, the benefits of improved sanitation and hygiene depend largely on decisions taken at household level," the report said.
Development aid, to be effective, should be planned more than 10 years before projects went into operation, the bank said. Therefore it was necessary to plan now for the infrastructures that would be in use in poor countries in 2050. But far more than finance for infrastructure was needed to pull these countries out of deprivation: institutions had to be reformed. The report said: "Massive infrastructure will have to be financed and built, with investment expenditures in developing countries rising from today's $200 billion a year to nearly $1.5 trillion in 2050."
La Tribune (France) further writes that in order to make "the dream of a world free of poverty" come true, the international community has to make the right choices. According to World Bank President James Wolfensohn, wrong choices would mean that "2050 could be an era stained by social conflict and environmental degradation", especially if 80 percent of the world population does not own more than 20 percent of the world's wealth. And because most of the poor live in rural areas working in agriculture, rural development and the increase of agricultural productivity should be the starting point of an anti-poverty policy, the report notes. Trade can be considered a "powerful mainspring for economic growth and poverty reduction, even if the link between trade and growth is complex and is not automatic" the World Bank argues.
The organization has calculated that a reduction of tariffs and trade barriers in developed and developing countries, associated with a cancellation of agricultural subsidies, would increase the income of developing countries by $350 billion by 2015, that is seven times the amount of public development aid. And 61 million people living on less than $1 a day would get out of poverty by 2015, while the number of people living on less than $2 a day would drop by 140 million.
At the same, the planet will have to bear such economic effect, the business daily notes. According to World Bank projections, developing countries will account for twice the economic weight of developed countries in 2050. The environmental consequences of this evolution are considerable: the number of vehicles would be multiplied by 4 in developing countries. And every growth point increase generates a one percent increase of greenhouse gas.
