Press Home » Press Releases » Mission Press Releases » New Developments » Fact Sheets » Media Advisories » Speeches and Test » Development Calendar » Evidence Summits » Reports to Congress » Photo Gallery » FrontLines » Contact USAID »
	02/06/12: Remarks by Donald Steinberg, Deputy Administrator, US Agency for International Development - Beyond Victimhood: The Crucial Role of Marginalized Groups in Building Peace 02/02/12: Statement of Dr. Sarah E. Mendelson, Deputy Assistant Administrator for Democracy, Conflict, and Humanitarian Assistance, before the House Subcommittee on Africa, Global Health, and Human Rights - U.S. Policy toward Post-Election Democratic Republic of the Congo 01/20/12: Remarks by USAID Administrator Dr. Rajiv Shah at the Environment and Security Conference, Washington, DC 01/19/12: Remarks by USAID Administrator Dr. Rajiv Shah at the Brookings Institution, Washington, DC - U.S. Aid and Transparency for Global Development See all USAID Speeches and Testimony RSS Feed for Recent USAID Speeches and Testimony
	Sign up to receive USAID Press Releases by email Email:     First Name:    Last Name:
	Advanced search... Search USAID Personnel... Search USAID Documents...

This is an archived USAID document retained on this web site as a matter of public record.

Jacqueline E. Schafer, Deputy Assistant Administrator
United States Agency for International Development
Economic Growth, Agriculture, and Trade

Testimony Before the
House International Relations Committee
Washington, D.C.
June 29, 2005

Introduction

I would like to thank you, Mr. Chairman and Members of this Committee, for the opportunity to appear before you today as you consider the U.S. Government's strategies to combat global water challenges, including access to safe water and sanitation in the developing world, and H.R. 1973, the "Water for the Poor Act of 2005." My summary statement, along with the submitted written testimony, responds to the Committee's request for information on each of the topics listed in your letter of invitation to testify.

The global water challenge is indeed large, but we are making progress. USAID's interventions are strategic and focus on creating the enabling environment for sound governance and financing, creating partnerships in the public and private sectors, and leveraging resources.

While it is correct to place emphasis on the delivery of water supply and sanitation services, we recognize that there is demand for reliable sources of clean water across multiple sectors in every country. USAID and other federal agencies involved in the delivery of technical assistance in the water sector remain committed to promoting the efficient management and development of water resources, consistent with the principles of Integrated Water Resources Management (IWRM), tailored to local conditions, and in partnership with government, private sector, and civil society institutions wherever we work.

We are more clearly articulating a shared understanding of the central role that water security plays in virtually all areas of the U.S. international development agenda. All of USAID's major goals and several U.S. national interests are affected by our success in achieving integrated water resources management, including peace and national security, economic and food security, human health, ecological sustainability, humanitarian response, and democracy and human rights (see Box 1).

The U.S. Strategic Framework in International Water

USAID has worked in the water sector since the 1960s. In the early decades of its work, the Agency engaged in a wide range of water-related activities, including dam construction, irrigation works and agricultural practices, water and sanitation infrastructure, and capacity and institution building across the entire spectrum. With lower funding levels in recent decades, as well as an increased emphasis on the human, social, economic and political dimensions of water resources management, interventions moved away from capital infrastructure activities toward the policies, laws, institutions, operational strategies, and financing necessary to build upon and sustain progress over the longer-term. In strategic states such as Egypt, Jordan, West Bank/Gaza, and most recently in Afghanistan and Iraq, USAID continues to invest in capital infrastructure, including public works for water supply and sanitation. USAID also undertakes capital projects in post-emergency humanitarian and reconstruction response, such as hurricanes, earthquakes, or the recent South Asia tsunami. Such capital intensive projects have been the exception. Our strategic approach has been to work with countries that have made clean water and public health a national goal to improve water sector institutions and reform water and sewerage utilities so they are financially sustainable and capable of providing reliable and affordable water to their people.

Since 1998, USAID has become increasingly engaged in the international dialogue on water, sharing the Agency's technical experience and promoting policy initiatives and development models at globally recognized events, including the World Water Forums (2000; 2003), the World Summit on Sustainable Development (WSSD, 2002), and the Commission on Sustainable Development (CSD, 2004; 2005). USAID has supported the USG commitment to the internationally agreed goals contained within the Millennium Declaration and the Johannesburg Plan of Implementation related to water, sanitation, and water resources management (see Box 2).¹

Water: A G-8 Plan of Action (2003)

Building on the outcomes of these international events and declarations, the G8 countries agreed to a "Water Action Plan" at the G8 Summit at Evian, France in 2003.² This Plan lays out principles that reflect USAID's strategic direction in the international water sector, and provides a useful framework to understand the Agency's programming priorities for water supply, sanitation, and water resources management.

The Plan lays out five major areas in which USAID is currently taking a significant leadership role in its international water programs:

• Promoting good governance;
• Utilizing all financial resources;
• Building infrastructure by empowering local authorities and communities;
• Strengthening monitoring, assessment, and research; and
• Reinforcing engagement of international organizations

While each of these areas will be discussed separately, USAID's water sector activities individually and collectively incorporate and integrate all of these core strategic principles to maximize the effectiveness of the Agency's investments.

Promoting good governance is at the very heart of the U.S. international water sector strategy. USAID actively promotes an integrated water resources management approach, emphasizing transparent and capable institutional and legal frameworks from the local to the river basin, watershed, or coastal landscape scale. The Agency's interventions furthermore work to build the political will and commitment of countries to ensure both adequate delivery of water, sanitation, and hygiene services and the sustainability and protection of the water and watershed resources and ecosystems upon which these services depend, including lakes, reservoirs, rivers, groundwater, and coastal/estuarine zones (see Box 3).

Utilizing all financial resources from the public and private sectors is absolutely necessary to address the enormous water challenges facing the developing world. Access to clean drinking water and adequate sanitation in particular will only become a reality through substantial private sector investment and public-private investments in the protection of water source areas. Mobilizing these resources is a formidable challenge and will require significant legal and regulatory reforms and interventions, credit enhancements, commercial advisors and managers, an enabling public sector, and a public willing to pay market-based rates for water. USAID is a global leader in promoting innovative models to leverage capital for water and wastewater infrastructure through loan guarantees and other credit enhancements, revolving funds, private sector partnerships, payments for environmental services, and enhanced donor coordination (see Box 4).

USAID programs are likewise committed to building infrastructure by empowering local authorities and communities through programs that promote community ownership and participation; decentralized and transparent governance; household level technologies for basic sanitation and safe drinking water; and the vital role that women play in meeting community water, sanitation, and hygiene goals. USAID is especially committed to improving the reach of our foreign assistance mandate by increased involvement in public-private alliances, and created the Global Development Alliance (GDA) to support the development and consolidation of such partnerships. By forging and supporting alliances in the water sector, USAID is helping to mobilize the ideas, efforts, and resources of governments, businesses, and civil society to address the need for water supply, sanitation, and sustainable financing (see Box 5).

Sound water resources management requires strengthening monitoring, assessment, and research in order to support water resources management decision-making with sound science and information. USAID is supporting data-collection and information management in most of its country-level programs. For example, in the Okavango River Basin in southern Africa and the Kura-Aras Basin of the South Caucasus, transboundary information collection, management, and data-sharing protocols are fundamental to the larger tasks of river basin management. Other examples include the installation of automated meteorological stations to improve the regional network for weather and snowmelt data collection in the five Central Asian Republics; remote sensing and GIS analysis applied to drought forecasting in Africa and lake basin management in Kyrgyzstan and Armenia; and participatory water quality monitoring in the Pastaza River in Peru. The Agency also supports sector-level applied research through its core support to international research networks and universities (see Box 6).

Finally, USAID collaborates with other donors and international actors to reinforce engagement of international organizations in the common goal to avert a world water crisis and meet the global challenges to provide water supply, sanitation, and sustainable water resources and watershed management for all. USAID works with national governments, financial institutions, and others to leverage capital from private domestic markets through sub-sovereign lending, guarantee and insurance schemes for risk mitigation, and sovereign and foreign exchange risk coverage. The Agency also engages at the highest levels with major international organizations (including the UN agencies, International Financial Institutions (IFIs), other bilateral donors, international public-private networks, non-governmental organizations) to advance collaboration on integrated water resources management (see Box 7).

Coordination and Implementation of Water Activities at USAID

Consistent with all of USAID's work, the Agency's portfolio of water activities is largely (but not exclusively) comprised of activities led by more than 100 Regional and Bilateral Missions and their implementing partners. Guided by our belief that water resource management problems and development challenges are best addressed by locally driven solutions, in locally appropriate ways, our worldwide portfolio of activities in 78 countries is designed and implemented in direct consultation with local and national partners and in the context of USAID country strategic planning. All activities emphasize and track measurable outcomes.

The Agency targets and tracks progress in 13 categories of water-related activities, including those related to: (1) water supply, sanitation, and wastewater management; (2) natural resources management; (3) economic development and food security; and (4) disaster preparedness. As for technical and sectoral areas of focus, an analysis of USAID's portfolio and expenditures reveals that Regional Bureaus and Missions are engaged in a broad spectrum of water activities across all sectors. For example, we have activities focused on the health and welfare of rural households (water supply, point of use water treatment and safe storage of water in the household, sanitation, and hygiene promotion), on the needs of urban areas (infrastructure and improved utility operations), on economic growth (often with emphasis on energy and industry), on food security (irrigated agriculture and soil/water quality), and on disaster management and humanitarian response.

To complement these targeted, locally demand-driven efforts, we strive to ensure that lessons learned are shared across the Agency's portfolio, and that an IWRM approach increasingly informs strategic plans and activity designs. In this way we continually endeavor to capture the best of USAID's local experience while sharing knowledge about the best of the world's experience with our Mission program staff. Our Agency Water Team is a good example of how we are working to coordinate across sectors, across Bureaus and Missions, and across agencies. We have several units at USAID/Washington that work on various parts of the integrated water resources management challenge, and these include our Urban Programs Team, our new Engineering and Infrastructure Office, our Office of Development Credit, our Global Health Bureau, our Office of Foreign Disaster Assistance, and each of our four Regional Bureaus. All of these units and more participate on our extended Agency Water Team which provides Mission support, knowledge management, and technical leadership in interagency processes and international fora. In this fashion, we coordinate internally, while contributing to and keeping abreast of the latest developments and best practices in the field of IWRM.

Beyond this considerable pool of technical expertise within the Agency, our implementation partners bring a wealth of experience and knowledge to our collective efforts. Our partners include universities, NGOs, faith-based organizations, international institutions (including the CGIAR centers), and a number of highly experienced private firms involved in the delivery of water services for decades. USAID's long-term presence in target countries provides a particular advantage in such collaborations, by establishing continuity with foreign governments and other partners, and providing necessary contextual perspective to achieve the aims of IWRM.

USAID Investment and Impact in the Water Sector

Water for the Poor Initiative

In 2002, Secretary of State Colin Powell announced the $970 million U.S. Government "Water for the Poor" Signature Initiative at the World Summit for Sustainable Development in Johannesburg. The three-year initiative has provided substantial resources to improve sustainable management of water resources and address needs for increased access to water and sanitation.

Over the two and a half years since WSSD, USAID has made major progress in addressing the serious water resource management concerns facing developing countries around the world in each of the three component areas of the Initiative:

• access to clean water and sanitation services;
• improved watershed management; and
• increased water productivity.

Summary of Investments to Date

• Included in the "Access to Clean Water and Sanitation Services" category are projects involving construction and rehabilitation of water treatment plants, water and sewer networks, wells, and sewage treatment plants, as well as health and hygiene promotion programs that will vastly increase the health impact of infrastructure investments. Over the three years of the Initiative, USAID originally committed to providing $510 million in programs worldwide for water supply, sanitation and health projects. In the first two years of the Initiative, and excluding expenditures in Iraq, USAID actually invested about $400 million in over 60 countries to improve water services, sanitation, and wastewater treatment services to underserved populations. Estimates for the third year of the Initiative indicate an additional $392 million to be spent, bringing the three-year total for the category (not counting Iraq) to $792 million. Water supply, sanitation, and wastewater obligations in Iraq from FY03-05 add another $562 million to this amount, for a grand total of $1.31 billion over three years. In addition, USAID's Development Credit Authority has helped secure loan portfolio guarantees in South Africa, The Philippines, Morocco, India, Bosnia, Kyrgyzstan, Egypt, Honduras, and Ukraine, all expected to leverage over $228 million in private funds for water supply and wastewater services to supplement direct assistance.
• The second principal component of the Water for the Poor Initiative is "Improved Watershed Management." USAID committed to investing nearly $400 million over the three-year Initiative to integrate surface water, aquifer, and coastal zone issues to protect watersheds and better manage water and coastal resources. Activities include the development of policies, institutions, and management strategies at the regional, national, and local scales for improved watershed management and interventions to reduce water pollution. In the first two years of the Initiative, USAID invested $189 million on integrated watershed and coastal area management in over 50 countries, excluding Iraq. An additional $103 million is estimated to be spent in 2005, bringing the three-year total for the category (less Iraq) to $292 million. Iraq expenditures from FY03-05 add about $5 million more, for a grand total to $297 million over three years. The original target of $400 million was based on straight-line projections from prior year obligations, and the shortfall during this recent three-year period is explained by shifting priorities and programs, including greater investments in the other two components of the Water for the Poor Initiative.
• The final component of the Water for the Poor Initiative is "Increased Water Productivity". In many parts of the world, water is becoming a constraint to economic growth and food production. Increasing diversions of surface water, over-abstraction of groundwater, and water quality deterioration threaten the sustainability of the resource and, in turn, the food production systems and economies. The productivity of water use can be improved in the agricultural, industrial, and commercial sectors. However, at the global level, agriculture consumes more than 70 percent of the freshwater used, and some of the most significant savings can be made by improving the efficiency of water use in that sector. In some countries, such as many in sub-Saharan Africa, there is potential to couple conservation and demand management with further development of water resources for agriculture and aquaculture. As part of the Water for the Poor Initiative, the United States committed to investing $60 million over three years to ensure that agricultural and industrial water use is as productive as possible. In the first two years of the Initiative, USAID invested $184 million in water productivity activities in 40 countries. In 2005, $43 million additional is expected to be spent, bringing the three-year total for the category (less Iraq) to $227 million. An additional $23 million has been spent in Iraq from FY03-05, making the grand total invested in this category $249 million over three years.

The Water for the Poor Initiative commitment and actual obligated amounts for the three years of the Initiative are summarized in Table 1.

Table 1

Summary of Estimated USAID Obligations
Water for the Poor Initiative - FY 2003-2005
(millions of dollars)

Summary of Impacts to Date

Among the major results achieved since the onset of the Initiative in the 78 countries where the Agency has implemented water programs, USAID can report that:

• Over 12,163,000 people in developing countries have received improved access to clean water supply;
• Over 21,395,000 people have received improved access to adequate sanitation;
• Over 2,400 watershed governance groups were convened and supported to undertake ongoing basin-scale, integrated water resources decision-making to address a diversity of water uses and needs; and
• Over 203 watershed management plans have been developed and approved by stakeholders at the watershed or basin scale.

Beyond these raw numbers, the types of interventions funded by USAID have contributed to a permanent shift in the way in which water resources management and water supply and sanitation service delivery are approached in the countries served, including:

• Improved institutions and enabling policies to permit mobilization of domestic capital from public and private sources to meet the needs of unserved populations in water supply and sanitation;
• Enhanced capacity of communities, governments, civil society, and the private sector to manage water resources and provide services in an efficient and effective manner;
• Strengthened structures for transparent, democratic governance, decision-making, and conflict resolution about water resources shared among many users;
• Increased opportunities for constructive partnerships between the public and private sectors, and among donors and international institutions;
• Increased sustainability of the natural resource base required to provide water services and process waste products;
• A more integrated vision and technical approach that links benefits from water resources management to other development goals including health, economic growth, education, and democracy and governance.

Looking Ahead: Water in the USAID Strategic Framework

The Agency is presently revising its approach to strategic planning, in general, moving beyond individual country strategies towards a core set of shared Agency Program Components, coupled with regional strategic frameworks that more comprehensively and strategically identify needs and priorities. Water-related activities are directly addressed in 3 of the 40 program components that will be explicitly targeted and tracked in the new Agency framework, and indirectly addressed in many others. One of USAID's new program components and associated common indicators deals directly with improving access to clean water and sanitation.

Our Regional Bureaus are now developing their own strategic frameworks consistent with the overall USAID program components, while remaining focused on the comparative advantage that USAID has within their region, and the mix of international interests and factors that must be considered in designing development assistance activities. Those regional frameworks are just emerging, but some can be expected to focus on the central role that successful water resources management plays in achieving and sustaining development objectives, including the reduction of conflict.

Financing water infrastructure is another major development challenge. For the Middle East alone, for example, to raise region-wide coverage to 90 per cent for water supply and 80 per cent for sewerage and sanitation, the World Bank estimates that additional water investment requirements are on the order of $5 billion annually. Funds from the international donor community are expected to meet less than 5 per cent of the financing needs. Access to clean drinking water and sanitation for much of the world will only become a reality through substantial municipal and private sector investment. USAID believes that regional solutions will play an important role in resolving serious water shortages, and our emerging Regional Bureau strategic frameworks will support the establishment of enabling environments and pooled financing mechanisms needed to attract municipal and private sector investment for water infrastructure.

All regions where USAID works are committed to addressing water resources management and water supply and sanitation service delivery in the most strategic and appropriate ways possible within the context of other national priorities, as well as Agency and U.S. government commitments and funding realities for each region.

Donor Coordination

To achieve the drinking water target in the Millennium Declaration for 2015, an additional 1.2 billion people will need access from 2002 to 2015. This number translates into providing new services for 260,000 people every day until 2015. The situation for sanitation is even more dramatic, and at least 1.8 billion will require sanitation from 2002 to 2015, or 350,000 new people per day.³

The total costs of meeting these 2015 targets depend on the type and level of service that will be provided, and the strategies employed to reduce the service deficit. The choice of countries, the urban-rural balance of the target group, the specific sub-populations targeted, and the technologies and service standards applied will all have a significant bearing on actual costs to meet these goals. Using the most basic standards of service and technology, it is estimated that the 2015 goals could be attained at an extra annual investment cost of about $10-12 billion.⁴ However, providing full water and sewerage connections and primary wastewater treatment to unserved urban populations would raise the annual cost of the 2015 goal to $17 billion for water and $32 billion for sanitation and sewerage, or a total of $49 billion annually.⁵

Going beyond water supply and sanitation alone, in 2000 the World Water Commission estimated that to meet the full range of water needs by 2025 -including agriculture, environment, energy, and industry, as well as water supply and sanitation-about $180 billion would be required each year in new investments, not including operations, maintenance, or repairs (or $4.5 trillion dollars over the full 25 year period).⁶

The global water community is confronting this reality by taking a closer look at where resources are currently coming from, and where they must be increased in the future. Current estimates are that financing to address all water investment needs in developing countries is drawn from a mix of several sources including:⁷

• domestic public sector financing at the national or local level (from taxes, user fees, public debt, etc.) [64% of total expenditures];
• direct investments from domestic private sources [19% of total expenditures];
• direct investments from international private sources [5% of total expenditures]; and
• international sources of support and cooperation (including multilateral and bilateral Official Development Assistance (ODA)) [12% of total expenditures]. (see Box 8)⁸

What is clear from these figures is that diverse financing sources have, and will continue to have, an important and distinct role to play in ensuring a sustainable and secure water future for the world. Each aspect of water resources management will require a unique combination of funding that may depend more heavily on some of these sources than on others. In all subsectors, however, it is certain that the majority of future investments must increasingly derive from an appropriate balance of self-regenerating domestic public as well as domestic and international private capital sources. This reality will more than ever require collaboration and cooperation among multiple actors from the public and private sectors within countries and throughout the international community.

The responsibility for forging the enabling environment necessary for sustainable financing as part of overall better water governance throughout the world is ultimately the responsibility of local actors. These processes are unlikely to take hold in many places, however, without increasingly coordinated partnerships among external donors, domestic public bodies, the private sector, and civil society. Technical assistance plays a catalytic role. Targeted and strategic expenditures of development assistance funds can and do help promote advances in the sustainable management of water resources through good governance.

USAID's comprehensive strategy for integrated water resources management, as reflected in the five principles of the Evian G8 Water Action Plan, directly confronts this reality with catalytic and effective approaches to change. By "promoting good governance;" "utilizing all financial resources;" "building infrastructure by empowering local authorities and communities;" "strengthening monitoring, assessment, and research;" and "reinforcing engagement of international organizations," the conditions are created to encourage public and private sector investment, and maximize the impact, sustainability, and replicability of USAID interventions. Such support is most effective when directed to locally owned strategies that encourage innovative processes and approaches, broaden the menu of tools and options available, leverage internal and external support and investments, and build capacity in civil society and the public and private sectors alike.

USAID views on H.R. 1973 and Conclusion

Mr. Chairman, as you have now heard, USAID is making solid progress on our water resources management and development programs worldwide, and we are doing so with the same goals and approaches as are outlined in H.R. 1973. We are highly committed to contributing to the Millennium Declaration and the WSSD Plan of Implementation, and to influence the direction of others similarly committed. The scope of the challenge and the limited resources available to address it argue that we must be highly strategic and catalytic at every opportunity.

And I believe we are. We are placing strong emphasis on innovative financing, partnerships (both public-public and public-private), building the right enabling environment that will attract new private capital, and enhancing the capacity of governments and their institutions responsible for all aspects of water resources management - protecting sources, delivering services, and promoting public health. We are promoting community-based approaches while simultaneously advancing the practice of river basin and transboundary river basin management in many areas of the globe. Although much of our emphasis is on the delivery of water supply and sanitation services, we are also focused on the broader development objectives that are intimately connected to successful water resources management. The U.S. has considerable experience and expertise to share in all of these areas and more, but progress will hinge on our ability to foster the political commitment to provide safe drinking water and basic sanitation for people in countries that have multiple, pressing needs on their development agendas. This most emphatically includes reforming water sector governance, and establishing financially sustainable water sector institutions, including water and sanitation service providers, and establishing clear objectives and performance indicators.

H.R. 1973 describes well the key challenges and gives due emphasis to the human health and economic impacts. USAID is already in full support of the bill's intent to achieve improved international coordination, new and innovative financing, and community-based approaches that involve civil society in helping to achieve equitable access to safe water and sanitation.

I think that we can be proud of the leadership that the United States has demonstrated in recent years on these issues, and that we have positioned ourselves well to maximize further U.S. contribution and impact on the challenges of global water security. Thank you very much once again for the opportunity to testify before this Committee. I would be happy to answer any questions the Committee Members may have.

¹ See United Nations General Assembly Resolution 55/2 of 8 September 2000 and the Johannesburg Plan of Implementation 2002

² http://www.g8.fr/evian/english/navigation/2003_g8_summit/summit_documents/water_-_a_g8_action_plan.html

³ WHO/UNICEF Joint Monitoring Programme. Meeting the MDG Drinking Water and Sanitation Target: A Mid-Term Assessment of Progress. 2004.

⁴ WHO/UNICEF Joint Monitoring Programme. Meeting the MDG Drinking Water and Sanitation Target: A Mid-Term Assessment of Progress. 2004.

⁵ World Panel on Financing Infrastructure, Michel Camdessus Chair. Financing Water for All. March 2003.

⁶ World Water Commission. World Water Vision: A Water Secure World. The Hague. 2000. and Global Water Partnership. Towards Water Security: A Framework for Action. The Hague. 2000.

⁷ Global Water Partnership. Towards Water Security: A Framework for Action. The Hague. 2000. Alternative estimates for the water supply and sanitation subsector only were provided by the World Panel on Financing Infrastructure (2003) based on analysis in the mid-1990s, where financing sources were assessed to be domestic public sector 65-70%, domestic private sector 5%, international donors 10-15%, and international private companies 10-15%.

⁸ Overall donor estimates in Box 8 uses the DAC definition of water supply and sanitation which includes activities related to water resource policy, planning and programs, water legislation and management, water resource development and protection, water supply and use, sanitation, and education and training when associated with an activity that is primarily water supply and sanitation. Dams and reservoirs used for irrigation and hydropower, aid to the water sector extended within multi-sectoral programs, direct budgetary support, and loans are not included in this estimate. Source for Box 8: Tearfund, 2004. Making Every Drop Count: An Assessment of Donor Progress Towards the Water and Sanitation Target. Middlesex, UK.

Back to Top ^