Executive summary

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The Expert Consultation on Water Policy Review and Reform (Rome, 25-27 January 1995), concluded, with some exceptions, that methodology for water policy development do not generally exist at the country level, but that there is a need for individual countries to formulate, debate and adopt appropriate, national, provincial and basin-wide policies for rational water resources management.

The general framework presented in this document is based on elaboration of the strategic planning process outlined below, focusing on policy review and strategy formulation for water resources management. Policy review is intended to re-assess objectives, existing policy and status of the water sector, and to provide new goals and policies on which a detailed strategy can be based. The process of strategy formulation is concerned with the detail of how to put policy into practice at successively national, regional (basin) and local levels. It is, in one sense, between policies and programmes or projects, although it may indicate projects without formulating their details.

Water policy review and strategy formulation have many overlapping elements and are closely related, and the intent is to offer the different elements that together make up a review or strategy formulation process. It is for the countries to choose those elements that are applicable and most likely to develop a unique process that matches their unique needs. Hence the framework concentrates on elements.

Strategic planning is a continuous process and involves feedback and cross-over between monitoring and assessment (according to established criteria) of the results of implementation of strategy and the resulting programmes and projects. Reality is far more complex and is complicated by simultaneous strategic and shorter-term horizons and the strong likelihood of changing circumstances, plus changing interactions with other aspects of public policy and economic development. Thus the process of policy review and strategy formulation is also modified by political processes and human behaviour and has strong long-term evolutionary characteristics, as demonstrated in the ongoing reforms in water resources management in such countries as the United States of America, Spain and Australia.

The importance of capacity building is stressed when addressing the differences between the ideal and reality, and in particular the somewhat artificial phasing of activities of any framework. Capacity building involves:

• Creating an enabling environment with appropriate policy and legal frameworks.
• Institutional development, including community participation.
• Human resources development and strengthening of managerial systems.

The background, problems and principles of water resources management are discussed and provide a breakdown of sectorial activities, the social and economic characteristics of water and explain the reasons for extensive public intervention in the development, allocation, regulation and management of water resources. International meetings (ICWE, Dublin, and UNCED, Rio di Janiero, both in 1992) on water and the environment have focused popular attention on the increasingly limited availability of water resources and the need for improved management and conservation as a corollary to development. Rising population and the rapid rate of urbanization continue to increase demand for the basic services of potable water and sanitation and the need for secure food supplies. Irrigation is the dominant water user in many developing countries and faces increasing competition from other sectors, raising severe localized problems of re-allocation in some cases.

Counter-balancing these basic needs is the increasingly more expensive cost of developing new water supply infrastructure; consideration of the environmental needs for water and mitigation of the impact of water development; and the recovery of part or all of the operational costs of supply. Public expenditure by governments is increasingly burdensome and the worldwide pressure to minimize recurrent expenditure, recover costs and balance budgets is strongly evident in the water sector. The need for massive levels of new investment has also prompted renewed interest in attracting private sector finance to augment or relieve state commitments.

Component parts of the policy review include determining the importance of water in specific national and regional contexts, conducting a comprehensive water resources assessment and thereby generating a matrix of problems and critical issues, set against old and emerging objectives for water policy. Broad options, based on defined principles, are evaluated and set the scene for detailed strategy formulation, which establishes critical elements such as oversight bodies and expert teams and identifies all the interested parties (stakeholders). Extensive use of public consultation and participation is envisaged, although realistic assessments of the time, effort, cost and logistical feasibility of appropriate stakeholder participation is called for. The end point of the strategy formulation exercise is the definition of an action programme and implementation schedule.

The principle elements and key issues in strategy formulation are introduced with consideration of the need for a holistic and integrated approach to assessment, development and management of freshwater resources. Categories of actions determined in the policy analysis matrix are elaborated with consideration of data requirements and information management and the role of modelling in assessing options. Institutional and legal reforms are a major part of strategy formulation, encompassing specification, allocation and recognition of water rights, changes in organizational and ownership arrangements, and decentralization and devolution of responsibility in public sector management. The role of economic tools and incentives and technological innovation are also introduced before more detailed consideration of the following key issues:

• institutions and human resources;
• stakeholder participation;
• information systems and management;
• the role of economics;
• environmental and health considerations; and
• international issues.

The final section draws together recent experience in water resources reform in Yemen, France, Mexico, England and Wales (United Kingdom), Victoria (Australia), Chile, Indonesia and Turkey, and attempts to emphasise the process of policy review and strategy formulation in practice. It highlights the outcomes of policy reform under the headings of water rights; privatization and corporatization; the promotion of price and market mechanisms; and reforms in planning and management.

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