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Water articles are written by ADB staff and external contributors on various water issues, reforms, and good practices.

Fund's Flow-On Effect

ADB Review [ December 2006 - January 2007 ]

After almost 5 years and $20 million in grants, has ADB's Water Fund been well spent? By Ma. Christina Dueñas
Knowledge Management Officer

Why does Baguio City in the Philippines, a water cradle with reliable water wells, face water scarcity on a daily basis? There is an easy explanation: just look at the city's thriving tourism industry, rapid urbanization encroaching on forestland, dilapidated infrastructure, fragmented water management, and weak regulation. Taking the bull by its horns, the "The Fund has definitely City government decided to added value for ADB and its integrate water resource developing member management and service delivery. countries" —Fund Reviewers With support from ADB's Bert van Woersem and Jetse Cooperation Fund for the Water Heun Sector (CFWS), the city improved coordination among its water agencies, formulated a water investment agenda, and enacted a water code. Then, this year, it won an international award for outstanding achievement in promoting socially equitable and sustainable development. The success of Baguio City's program makes CFWS's $50,000 investment in the city money well spent. However, can the same be said for the rest of the Fund's $20 million investments? LOOMING WATER CRISIS CFWS evolved after the widespread realization that a water crisis was looming. In 2001, one in three people in Asia had no access to a safe water supply, and half the population had no sanitation facilities. Asia is home to nearly two thirds of the world's poor, and they are the hardest hit by floods, drought, scarcity, pollution, disease, and other water-related challenges. Clearly, there was an urgent need for actions that responded to these challenges. ADB established the Fund to jump-start water reforms in the AsiaPacific region. With a variety of interventions, CFWS aimed to address the differing needs of stakeholders—women trudging 12 kilometers a day to fetch water, water utilities needing to recover their costs to survive in the business, national governments needing to decide on water rights, regional water networks needing to teach their members to benchmark their performance. UNDER THE MICROSCOPE In late 2005, the Government of the Netherlands—the CFWS's major donor—tasked expert evaluators Bert van Woersem and Jetse Heun to review the Fund's operations. "The Fund has definitely added value for ADB and its developing member countries (DMCs)," said Mr. van Woersem and Mr. Heun in their report that highlighted, among others, the Fund's specific contributions. These included: improving water policies, reforms, and strategies through innovative products and approaches; developing the capacity of critical water organizations; and opening up dialogue between stakeholders in DMCs, such as governments, development agencies, and civil society.
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Although Mr. van Woersem and Mr. Heun say that some of the results of the Fund's interventions will be long term, they acknowledged that during the Fund's first 4 years of operation, there had already been some positive results. For example, the Fund has commissioned studies that provide new knowledge on performance benchmarking for water utilities, river basin organizations, and national water sector apex bodies. Responding to complex stakeholder needs also means using different techniques, media, and approaches, many of which were untried by ADB in the past. In this, Mr. van Woersem and Mr. Heun found the CFWS to also be successful. One previously untried approach was a series of water media workshops—in which more than 400 journalists participated—to increase journalists' understanding of water issues. "Influencing one Chinese journalist can lead to hundreds of thousands of readers having a better understanding of water," said Wang Yao, editor of Chinese newspaper Quingnian Cankao. The Fund's Pilot and Demonstration Activities (PDAs) are another innovation. These grants to nongovernment organizations, governments, and ADB project staff support local initiatives with significant potential for replication or scaling up. Demand-driven and operating within 12-month timeframe, PDAs enable communities to solve their water problems faster. From cleaning up coastlines through wastewater treatment facilities, to providing livelihood opportunities through drip irrigation, the Dutch review found that PDAs allow people, especially the poor, to manage better their water resources. WHAT'S NEXT "The Fund should intensify its efforts to focus on activities in a three-fold manner," says Mr. van Woersem and Mr. Heun. The CFWS should work on a number of strategic themes, on a selected number of countries, and on issues directly related to ADB's comparative advantages, such as the technical expertise that project staff offer countries along with loan money.

The lessons from CFWS's implementation and the Dutch review are especially helpful as ADB begins work on the Fund's successor, the Water Financing Partnership Facility. This facility will raise and invest $100 million to support ADB's new Water Financing Program 2006– 2010, which will deliver substantial investment, reforms, and capacity development in rural and -urban water services, and river basin management. If the $20 million from CFWS can already do so much, imagine how much more good the new $100 million financing facility can do. The challenge will be to keep pushing for more reforms and innovations. RELATED TOPICS Cooperation Fund for the Water Sector (CFWS)

BETTER UNDERSTANDING Wang Ning, a participant in ADB's media workshops and correspondent from China Economic Times in Beijing, interviews Dhaka residents during an exchange assignment with Bangladesh’s Forum of Environmental Journalists

*This article was first published online at ADB's Water for All website in 2007: http://www.adb.org/Documents/Periodicals/ADB_Review/2006/vol38-4/funds-flow-effect.asp.

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