The Dutch urge ‘World Bank take a lead in driving change’

Published on: 22/06/2015

This blog has been written by Jeske Verhoeven of IRC and Erma Uytewaal associate consultant of IRC.

The required fundamental paradigm shift according to the main Dutch water and sanitation actors involves a process of systemic change that focuses on establishing strong country sector systems. It implies a move away by all actors in the water and sanitation sector from focusing on the construction of water and sanitation infrastructure to service delivery – and service use for all. In this revised way of working all stakeholders work together in a coordinated way, under leadership of the government, towards the achievement of a set of commonly accorded sector goals.

This is the outcomes of a consultation process, led by IRC, with the main Dutch water and sanitation actors on the future of the water and sanitation sector and the role of the World Bank in water and sanitation (1). The Directorate General of International Cooperation of the Netherlands asked IRC to lead this consultation process with the Dutch water and sanitation sector to inform their engagement with the World Bank.

The World Bank is going through a period of fundamental reform to have greater impact. In October 2013 the World Bank adopted a new strategy with two ambitious goals; end extreme poverty by 2030 and promote shared prosperity. The new strategy calls for greater efficiency in operations; more investment in knowledge, technical skills, and information technology; and the breaking down of silos within the institution that currently inhibit collaboration and knowledge-sharing. The strategy includes a new business model, merging operational service delivery with knowledge architecture through 14 Global Practices and 5 Cross-Cutting Solutions Areas. For water and sanitation, the new so-called Water Global Practice brings together irrigation, water resources management, hydropower and water and sanitation service delivery.

In October 2014 the Dutch government and the World Bank signed a strategic partnership agreement. An integral part of this agreement forms the commitment of US$50 million from the Dutch government for the coming five years to the World Bank's new Global Water Practice. The Dutch Ministry of Foreign Affairs wants to spend this contribution to the Global Water Practice in a coordinated manner with input from the Dutch water sector.

This blog is the second part of a series a three blogs (published in June 2015) which share the main outcomes of the consultation process with the main Dutch water and sanitation actors on the future of the sector and the role of the World Bank in water and sanitation. This blog presents the main ideas of the Dutch water and sanitation sector around the role of the World Bank in leading the paradigm shift argued for by the Dutch actors in our first blog 'The future of water and sanitation: a common Dutch vision'. The final third blog encloses the possible Dutch input in implementation of the Global Water Practice new strategy.

Moving towards a service delivery approach

The 'service delivery approach' which is proposed by the main Dutch water and sanitation actors is based on the premise that a drinking water and sanitation service relies on a complex interaction between actors, institutions and physical infrastructure that operates at and across various governance levels. Planning, financing and institutional arrangements, including arrangements for public and private financing, are made for the entire life-cycle of services. Long term financing of the services is guaranteed through a mix of nationally generated public funding, tariffs and external support (transfers/ aid).

'An effective service delivery approach relies on the whole system working effectively together - all the different parts, institutions and actors.'

Water, sanitation and hygiene services also need to be monitored continuously and assessed against criteria such as quality, quantity, accessibility and reliability. All sector actors (governments, private sector, donors and Non-Governmental Organisations) need to collaborate and hold each other accountable for the delivery of equitable and sustainable services for all.

In the opinion of the main Dutch water and sanitation actors the sector needs radical change towards a service delivery approach, breaking away from the current focus on construction of water and sanitation infrastructure. The Dutch believe strongly that the World Bank needs to drive this change. As it is one of the few institutions, if not the only, to have both the political weight and the financial resources to lead the water and sanitation sector through the required transformation process.

The Bank is perfectly placed to lead the transformation process in the water and sanitation sector both internationally and at country level.

Leading change at country level

Driving change towards a service delivery approach will require the World Bank to prioritise its efforts in a catalytic manner in support of establishing strong country sector systems.

The World Bank needs to shift the focus of its resources, particularly grants, towards building capacity at (recipient) country level to plan, finance, deliver and monitor equitable and sustainable service delivery. This includes supporting the creation of the national infrastructure for enhanced domestic resource generation to finance sustainable delivery of water and sanitation, covering all life-cycle costs from construction, to operation, maintenance and rehabilitation.

At country level, the World Bank can lead in strengthening and building government leadership by using their existing instruments as the country diagnostic frameworks, the country assistant strategies and support programmes to:

• do a bottleneck assessment of the sector, get deeper understanding on the critical aspects of service delivery, update the diagnostic regularly and engage sector stakeholders including beneficiaries in this process/ assessment.
• seek leverage and partnerships with bi-lateral donors, UN organisations, other influential organisations (such as WaterAid and IRC) with presence in country and civil society organisations for demand creation, promotion of adoption of a service delivery approach and for public-private investments in sector (institutional) strengthening.
• promote and leverage funding (grants and loans) in support of the implementation of a programmatic framework in countries where those are provided by the national government

With regards to existing and future World Bank lending (loan portfolios) the main Dutch water and sanitation actors advise the World Bank at country level to:

• reach agreements with national governments and other sector partners to draw up a 'compact' with roles and responsibilities for ensuring the sustainability and impact of World Bank supported investments and agree on how the 'compact' will be monitored.
• do a profound assessment of the critical aspects of service delivery and the envisioned sustainability of the project results - engage beneficiaries and other stakeholders in this assessment and project design.
• hold back a minimum percentage of loans (20%) to invest in critical aspects of service delivery beyond the construction of infrastructure and programme management (i.e. to strengthen national monitoring, capacity development of local stakeholders etc.)
• seek leverage and partnerships with bi-lateral donors, and other relevant sector players with presence in country.
• add conditionality clauses which make governments and project implementers accountable for the sustainability of the infrastructure they put in place with World Bank funding
• support the development of national and appropriate financial infrastructure that enables enhanced domestic resource mobilization for the water and sanitation sector by supporting public- private funding and developing alternative forms of financing water and sanitation delivery

Leading change at institutional level

At institutional level, the main Dutch water and sanitation actors recommend the World Bank to drive the adoption of a service delivery approach by:

• changing the way the World Bank monitors its institutional performance, towards monitoring service delivery in a transparent way rather than just counting numbers of water systems/household latrines built.
• adopting a collaborative approach in engaging with other donors and influential organisations based on the recognition of complementary knowledge, experiences and perspectives in organisations external to the World Bank. Partnerships with other influential sector players have the potential to galvanise sector change towards a service delivery approach.
• seeking the involvement or other stakeholders in sharing and assessing progress and bottlenecks in the Global Water Practice's performance. For example by setting up an external advisory or learning group for the Global Water Practice which includes national governments, Non-Governmental Organisations and academia to meet once or twice a year, facilitated by an independent and recognised knowledge institute.

Engaging other global players

The main Dutch water and sanitation actors also ask the World Bank to take a position in the internal arena and drive the adoption of a service delivery approach by:

• taking a stronger role in existing platforms, particularly in the Sanitation and Water For All partnership, the Stockholm World Water Week etc. for championing sector reform and the investments needed for structural changes.

Thematic focus of the Global Water Practice

Based on the IRC analysis of emerging trends and scenarios impacting water, sanitation and hygiene service delivery (discussed in the blog 'the future of water and sanitation: a common Dutch vision), the main Dutch water and sanitation actors suggest that knowledge development in the Global Water Practice should focus on innovation in a number of prioritized thematic areas, underpinning the Banks's leading role in the sector. These should include developing approaches for:

• Targeting the poor, extremely poor and most vulnerable with access to sustainable water and sanitation services
• Service delivery models to reach particularly the "pockets of exclusion" in dispersed rural and peri-urban (slum) settings
• Sanitation including waste water and fecal sludge management and hygiene behavior especially concerning (but not exclusively) users in non-sewered areas
• Addressing water, sanitation and hygiene in an integrated way and within the broader water cycle
• Developing alternative financing models for water, sanitation and hygiene service delivery
• Developing and adopting more stringent instruments to ensure sustainability
• Work with broader governments to address some of the underlying weaknesses in public administration, management, financing and decentralization of water and sanitation service delivery

This blog discusses the opinion of the main Dutch water and sanitation actors on the future role of the World Bank in the water and sanitation sector. The important question now to be asked to the World Bank is whether it has the political will and commitment to take-up this strategic role? Is the World Bank prepared to drive the sector to change and move past safeguarding sacred cows and established institutional interests towards a sector that realizes sustainable services for all by 2030, leaving nobody behind?

Footnote

1. Organisations who participated in the consultation meeting in January 2015 were Simavi, Royal Haskoning DHV, Aqua for All, Waste, Both Ends, Netherlands Water Platform, UNESCO-IHE, Waternet, World Bank, UVW and Directorate General of International Cooperation of The Netherlands.

Further reading

Directorate General of International Cooperation (DGIS), 2014. Netherlands and World Bank join forces on water issues, Clean drinking water and sanitation for 200 million people, Website article. Available at: < http://www.government.nl/news/2014/10/11/netherlands-and-world-bank-join-forces-on-water-issues.html >

World Bank (WB), 2013. World Bank Group Strategy. Available at: < https://openknowledge.worldbank.org/bitstream/handle/10986/16095/32824_ebook.pdf  >