OECD Studies on Water

2224-5081 (online)
2224-5073 (print)
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Water is essential for economic growth, human health, and the environment. Yet governments around the world face significant challenges in managing their water resources effectively. The problems are multiple and complex: billions of people are still without access to safe water and adequate sanitation; competition for water is increasing among the different uses and users; and major investment is required to maintain and improve water infrastructure in OECD and non-OECD countries. This OECD series on water provides policy analysis and guidance on the economic, financial and governance aspects of water resources management. These aspects generally lie at the heart of the water problem and hold the key to unlocking the policy puzzle.

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Ten Years of Water Sector Reform in Eastern Europe, Caucasus and Central Asia

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16 Aug 2011
9789264118430 (PDF) ;9789264118409(print)

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This report evaluates how well EECCA countries have done in ensuring people’s access to adequate water supply and sanitation services since their Economic, Finance, and Environment Ministers adopted the Almaty Guiding Principles to support such efforts in 2000. Besides looking at trends in the technical and financial performance of the water sector, the report analyses the results of institutional reforms at different levels of governance, as well as financing arrangements. Analysis focuses mainly on urban areas, but some of the challenges in rural areas are also examined. The report draws policy recommendations to help countries stem the decline in the sector’s performance that has occurred over the last decade, despite opportunities provided by rapid economic growth in many EECCA countries in this period.

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  • Foreword
    Providing safe water and adequate sanitation to the citizens of Eastern Europe, the Caucasus and Central Asia (EECCA) involves unique challenges. Whereas in many parts of the world the challenge is to construct water infrastructure, in EECCA countries, the challenge has been to maintain over-sized, inefficient infrastructure constructed in the Soviet period. EECCA countries have struggled to face up to this challenge. This has impacted on human health and the environment, and impeded economic development in these countries.
  • Executive Summary
    The countries of Eastern Europe, the Caucasus and Central Asia (EECCA) inherited a well-developed network of water infrastructure from the Soviet period. However, since then, it has seriously deteriorated due to a lack of operation and maintenance, insufficient finance, weak institutions, as well as external factors, such as economic and demographic changes, and rapidly rising energy prices. As a result, people in the region have faced a steady decline in levels and quality of service, as well as significant threats to human health, ecosystems, and economic development.
  • Setting the scene
    This chapter sets the scene for the analysis of the performance of water supply and sanitation systems in countries of Eastern Europe, Caucasus and Central Asia. It evaluates why it is important to invest in water supply and sanitation. It provides background information on the regional context, regarding the resource and macro-economic and social drivers.
  • Recent trends and current status
    This chapter provides comparable data on recent trends and current performance of water supply and sanitation systems in EECCA. It draws on a set of indicators of both the technical and financial performance of water utilities. It discusses the specific challenges in rural areas, given that coverage rates tend to be much lower, with self-provision, rather than piped networks, being an important form of supply. It elaborates on the consequences of inadequate service quality on health and the environment.
  • Institutional reforms
    This chapter starts by reviewing the overall water sector reform performance, assessed against the Almaty Guiding Principles and based on the EBRD transition index. It then examines specific institutional reforms, such as the decentralisation of water and sanitation services (and subsequent regrouping), the definition of regulatory frameworks, the introduction of private sector participation and overall reforms to improve transparency and reduce corruption in the sector.
  • Financial sustainability
    This chapter reviews how the water and sanitation sector in EECCA countries has been financed over the last decade, examining each source of finance in turn. As set out by OECD (2009), there are three main sources of finance to cover the costs of delivering water and sanitation services: tariffs, taxes, and transfers from other countries in the form of official development assistance (ODA). These are referred to collectively as "the 3Ts". In addition, repayable financing, from either public or private sources, may help close the financing gap during an intermediary period although ultimately they need to be repaid from revenues generated by the 3Ts. The chapter then stresses the importance of evaluating where financing is going to come from if the current situation of deteriorating assets and service quality is going to be reversed. Doing so will require conducting strategic financial planning at national level, as some countries in the region have done.
  • Policy recommendations
    This chapter discusses why it is important to act now to reverse deterioration in performance. Recommendations are formulated as to what can be done. Particular attention is paid to pressing with the reform of institutions, strengthening regulation, containing costs and investing wisely. Under these conditions, EECCA countries will be better positioned to attract additional financial resources for water-related investments.
  • Annex: Key statistics by country
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