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The World Bank's New Water Policy and Its Implementation in India and Sri Lanka

30.09.2004: Does the World Bank Group really have a new water policy? The basic principles of the newly released Water Resources Sector Strategy and the Infrastructure Action Plan are still the same as in the early 1990`s: commercialisation, decentralisation, water as an economic good and cost-recovery by users, the withdrawal of the state as service provider and opening up of the sector to private capital.

There is a long and well-documented history of how the World Bank Groups has been pushing this policy upon recipient countries through Country Assistance Strategies and loan conditionalities since the early 1990's. Today, and a decade later, World Bank officials admit that privatisation has achieved much less than promised and expected. In spite of many failures of privatisation attempts and the policy as a whole, the World Bank Groups is pushing the privatisation policy further. For the rural and peri-urban areas, however, the World Bank is advocating a different approach. Often, privatisation is not an option here because the structural conditions and limited capacity of most consumers to pay hardly make them attractive for private capital. Instead of an outright privatisation, the Bank is advocating the so-called demand-responsive-approach, or community-driven-development, moving away from the supply oriented approach, where services are provided by the government, often at subsidised rates.Water user groups or similar community based organisations shall be responsible for desinging, planning, implementing and running their own water and sanitation systems according to their needs and financial abilities. Although some elements like decentralisation, participation and orientation towards appropriate, affordable technologies seem to be a certain measure of progress compared to earlier approaches, there are serious doubts whether this will work under the conditions of rural social, economic and political inequalities and power relations.

Please find the executive summary of the paper "King Customer: The World Bank's new Water Policy and Its Implementation in India and Sri Lanka" by Uwe Höring and Ann Kathrin Schneider attached, the full working paper can soon be ordered from

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