8 December 2008
A recent meeting between the World Bank and the Yemeni Planning Minister focused on preliminary negotiations on a proposed water sector project. However, the central question remains whether the Bank is ensuring water access for the poor.
In October, the Yemeni news agency Saba reported on a meeting between the World Bank and the Government of Yemen that focused on discussions around a proposed $90 million grant to support Yemen’s national water strategy. Last week, the Bank disclosed documents that indicate new estimates on project approval and anticipated donor financing commitments, though they offer little in terms of substantive plans for the project.
Despite the large volume of money that is being committed for the project – with expected Dutch, British and German government contributions, the total is expected to surpass $380 million – it remains unclear what specifically will be financed. There is only scant information available from the World Bank, and the five-year national strategy on which the aid is based is not publicly accessible. According to World Bank documents, the Yemen Water Sector Support Project is expected to go to the Board for approval in February 2009.
At the same time, while the decision to finance Yemen’s water strategy as a Sector-Wide Approach (SWAp) lends to better donor coordination, it raises the possibility that the process is driven by and tailored to donors, whose expected contributions together account for nearly two-thirds of the cost of the project.
Yemen is the least developed country in the region, and one of the world’s most water poor countries in the world, where per capita availability of water is only 2% of the world average, according to the World Bank. Yemen’s water crisis has not only hindered the efforts to reduce poverty and stimulate economic growth but has also resulted in social disputes over water wells and land ownership, as demand for water outstrips supply.
Rainfall represents the main source of water needed for agriculture and households, and nearly all of the rainfall evaporates. Reports show that about 90% of the ground water in Yemen is used for irrigation, mostly to grow qat, which accounts for roughly 40% of cultivated land. Meanwhile, in order to keep up with the increasing demand on water, landlords and private companies have been drilling unauthorized wells that have depleted Yemen’s groundwater.
Considering the depth of Yemen’s water crisis, the World Bank has rightfully emphasized water provision in its portfolio, as well as in its Country Assistance Strategy (CAS). Since 2000, the Bank has committed $303 million for the water sector, or 27% of approvals.
However, while preliminary project documents indicate that the bulk of the proposed Bank grant will support irrigation infrastructure and urban water systems, the nature of the investment remains unclear, including what if any policy changes in the water sector will accompany the grant. Typically, World Bank grants entail much more stringent conditions than loans that need to be repaid. To date, the Bank’s support for the water sector in Yemen has been predicated on fostering private sector involvement, particularly in urban water services, and in granting private companies the responsibility to assess water and demand levels and to determine prices. The Bank has also advised the government to lift subsidies on diesel, a major expense in qat cultivation
Some observers have raised concerns about how effective the World Bank’s interventions have been in addressing Yemen’s water problems, and questioned the impact and rationale of the Bank-supported strategies such as introducing water tariffs, encouraging public-private partnerships, pushing for a greater private sector role, and lifting subsidies on maintenance, spate irrigation, and diesel. These advocates have suggested that the Bank’s approach to date has placed a disproportionate emphasis on private sector solutions to Yemen’s pressing water needs, and that these efforts have not been accompanied by adequate measures to mitigate adverse impacts on the poor and ensure equitable access.
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