§ The Secretary of State for International Development (Clare Short)The UN has designated 2003 as the International Year of Freshwater, acknowledging that global water issues need to be placed high on the international agenda. They will be discussed at the Global Water Conference in Kyoto in March and we expect that there will also be discussion at the G8 Summit in Evian in June. This statement sets out briefly the Government's view of the key issues and our approach to addressing them.
The provision, use and management of water are central to both sustainable development and poverty reduction. Nearly two thirds of the world's population will be living in countries of significant water stress by the year 2025. 1.2 billion people lack access to safe drinking water and 2.4 billion people lack access to basic sanitation. Environmental needs for water are vital. Some 1.3 billion people continue to earn less than US$1/day and 800 million of them regularly go hungry. Hunger and poverty are closely linked. Agricultural water management can and does play a significant role in reducing hunger and poverty in the developing world.
Meeting the water supply and sanitation targets within the Millennium Development Goals is estimated to require an additional US$9 billion to US$30 billion per year. Meeting funding needs for water resources and integrated water resources management would increases this amount to around $180 billion per year. The largest share of investment will need to be met from public and private resources in each country. Development assistance has a role to play through direct or indirect support of Government and civil society programmes, through helping to build the capacity of national institutions, and, in poorer countries, through providing a lever for other forms of finance, thus helping bridge the funding gap.
Our overall strategy, set out in the DFID Target Strategy Paper on Water published in 2001, is to seek to focus international policy making in water resources, irrigation, water supply and sanitation on the reduction 39WS of poverty. We have concentrated our efforts in improving the management and allocation of water resources and in increasing access to water and sanitation to achieve improved health and sustainable livelihoods for the poor. The UK played a leading role at the 2002 World Summit on Sustainable Development (WSSD) in the agreement of a new target on sanitation as one of the Millennium Development Goals. We are equally committed to supporting implementation of this and the existing MDG on access to safe water, and to the commitments made at WSSD for better management of water resources.
Our emphasis in addressing issues in the water sector has changed over the years. More effective use of development assistance means moving away from funding a proliferation of isolated and uncoordinated donor-led projects to providing support to build sustainable improvements in local capacity in a way that is consistent with poverty reduction strategies drawn up by developing countries themselves. We have moved from bilateral assistance towards providing greater input into global efforts at addressing these issues. In the last three years this process has accelerated.
In March 2000 at the World Water Forum in The Hague I announced that we planned to double our bilateral contribution to the sector over the next three years. At that time we estimated our expenditure in the sector (based on 1998–99 figures, which were the latest available) at £50 million a year. Our expenditure bilaterally on water and related activities is estimated at £82 million in 1999–00, £91 million in 2000–01 and £87 million in 2001–02. Our new commitments to the water sector totalled £86 million in 2001–02. Some of our spending, for example, direct budget support, is not easily attributable to particular sectors but will 40WS nevertheless contribute to sectoral goals. A small proportion of our budget support is likely to help finance activities in the water sector.
In our work in the water sector we aim to strengthen governance, build institutional capacity, raise awareness and promote sharing of knowledge.
We are therefore supporting global programmes and processes that reach down to the poorest through international agencies, through new forms of partnerships between the public sector, civil society and the private sector, such as the EU Water Initiative and Partners for Water & Sanitation. We continue to be open to good opportunities to invest in the water sector, consistent with our broader approach of supporting country-owned poverty reduction strategies through which developing countries establish their own priorities. Multilateral institutions which we support, such as the World Bank, the Regional Development Banks, UNICEF and the European Community, also make very significant investments in water-related projects and programmes.
We are seeking more effective ways of mobilising financing at a global level that are linked to the development of effective water sector strategies and policies. We work with other donors to develop new financing facilities, to address the complex of market and government failures that deter private financing in water infrastructure.
We are supporting global resource centres for water resource management and for environmental health, which, for the first time, bring together a network of developed and developing country based technical and social institutions. These resource centres seek to develop best practice and to share international expertise so as to ensure that the best knowledge finds its way down to national and local levels.