MDGs - the first 7.5 years

from Development Cooperation to International Cooperation

In 2000 the Millennium Development Goals were formulated - 8 different goals for a better world by 2015. Goal 7 called for the world to halve the proportion of people without access to safe drinking water as well as the proportion of people who do not have access to basic sanitation by 2015.

Policy developments

In 2003 the International Year of Freshwater was declared by the General Assembly and UN-Water is established, followed by the “Water for Life" decade from 2005 to 2015. The focus in all these initiatives was on low income countries.

In The Netherlands the official UN norm (0,7%) became more and more connected with issues related to International Collaboration with a high(er) economic motif and with migration-refugees-emergency aside a more Aid to Trade policy development from about 2000 onward.

The year 2008 marked the start of the financial global crisis. In 2006, after the report ‘Beyond scarcity: power, poverty and global water crisis', which largely influenced a common felt urgency to revise the MDGs programs for the second half period, the SWA (Sanitation and Water for All) platform was created, a global partnership of governments, donors, civil society organizations and other development partners to galvanize political action by putting water and sanitation in a more central position on the development agenda. In 2008 the International Year of Sanitation was declared.

Despite all these developments, the MDGs programs reach their halfway mark but are still far behind schedule.

Financing

Blending schemes between donor money and investors are practiced in the MDG-period 2000-2008. CSR (Corporate social responsibility) by corporations, private business and western utilities promote  public-private  arrangements in management, operations, building and even ownership structures. Privatisation of WASH is partially practiced, by concession politics for larg(er) utilities. Aid driven donor money was blended with low -interest investments from development IFIs (Institutional Finance by development banks and the World Bank) but still requiring (even today) the sovereign guaranties from national finance ministries (which limits the investments). However, an interesting contradiction remains, in the fact that privatisation of water in developing countries has been actively promoted by developed countries such as The Netherlands and Sweden, while these countries' own water supply is publicly managed - a comparison can be found here.

The PPP thinking with outsourcing services to private players under PPP-acts and/or concession contracts opens the floor to private investors and commercial banks/pension funds although the risk perception and linked risk mitigation activities are still largely dependent on donor and aid-philanthropy money.

Actors and instruments

Official Development Aid turns into International Cooperation (reflected in the name DGIS) giving a position to private sector initiatives and encouraging public-private partnerships between financing parties (DGIS-private sector) and public private partnerships in receiving countries (P3SW program). More on Dutch developments can be found here.

Developments and lessons learned

During this period the awareness around sustainability started growing, when being confronted with the extreme short life cycle of donated infrastructural aid. Donors, DFI’s and philanthropic players increasingly wished to see a long term sustainability, whether addressing decentral small scale equipment/facilities (like handpumps, toilets, decentral treatment systems) or addressing large infrastructure (like boreholes, piping systems, treatment -and pumping stations). Cost recovery of OPEX (operational expenditures) including money for maintenance and repair/replacement was not established. IRC ao started the triple S approach (Sustainable Supply of Services) which affected the VLOM concept (Village Led Operation and Maintenance) substantially. 

A key turning point came, when the Dutch Ministry of Foreign Affiars (MoFA or DGIS) proclaimed the set-up of a sustainability clause in 2007, insisting a 10 (later 15) years guaranty on sustaining the services (by sustaining the infrastructure that was financed with ODA money). The first 3 programs that were confronted with this sustainability clause were UN Habitat Lake Victoria Water and Sanitation Program, UNICEF and Aqua for all-WASH program. WASH became a more business wise oriented service sector. A product oriented investment approach building facilities focused on access to water (and sanitation) is changing into a more service oriented approach where sustainability, cost recovery, quality and service performance is becoming leading. Viability of investments stay uncertain, the business ecosystem bound risks are acknowledged but difficult to address. Blending finance is upcoming.