Financing water supply and sanitation under Agenda 21

This paper assesses the financing challenges which have to be met by developing countries if water resources are to be managed efficiently, if the quality of the aquatic environment is to be improved and if water related services are to be delivered in a responsive, efficient and equitable way. This paper takes the view that attaching 'price tags' to water supply and sanitation, as was tentatively done in Agenda 21, is a misguided approach and that what is needed is articulation of clear principles which should underpin the financing of water supply and sanitation investments. To illustrate the approach the paper focuses heavily on experiences from World Bank water supply, sanitation and urban development projects over the past 30 years. The challenge is to develop appropriate institutional and financial arrangements. The essence of such arrangements is that they ensure that societies mobilize appropriate levels of resources for providing water related environmental services and that these resources are used in the most efficient and effective way possible .     

Legal aspects of natural resource projects in the CIS

Foreign companies interested in natural resources ventures in republics of the Commonwealth of Independent States must contend with a legal, regulatory and tax environment that is particularly fluid. The approval process for joint ventures, production sharing and export agreements (particularly for natural resources) is complex. Legislation in most CIS countries falls short of adequately addressing investors' concerns or lacks clear guidance on many key issues, such as conditions under which a state enterprise can enter into new business arrangements under current privatization laws. Among other conditions that act as a constraint to investment projects are lack of a sufficiently convertible currency in each CIS country and complex regimes of currency regulation; the absence of financing techniques that are common in market economies (ie secured lending); the need to scrutinize the validity and enforceability of any locally available guarantees and a reluctance by financial institutions to participate in projects in CIS countries (often because they have considerable difficulty assessing the viability of projects). These problems demand an extraordinary commitment in terms of effort and perseverance from potential investors, as compared to projects in other areas of the world. This paper cites the key negotiating issues and transactions that need to be structured with care by a prudent investor.     

The Assessment of Water Resources Projects Involving Economic, Social and Environmental Costs and Benefits: The World Bank's View

In evaluating the costs and benefits of water resources development projects, the World Bank examines the economic, social and environmental aspects of the project. Some of these aspects are more easily quantified than others. The paper reviews some aspects that have been quantified by the Bank and describes others which have not. By way of illustrating the difficulty of quantification, the Bank's efforts to quantify the health hazards resulting from the introduction of irrigation projects is examined. In addition, the Bank's requirements with respect to social and environmental factors as they affect water resources projects are described.     

Sources of funds for developing country petroleum development

The Third World debt crisis has drastically altered the options open to Third World countries to fund petroleum development. Restricted access to international capital markets means that developing countries are having to reconsider alternative financial options to achieve a satisfactory rate of petroleum development. Of these, only foreign direct investmentis capable of compensating for the loss of more traditional sources of funds. To this end, developing countries are revising and harmonizing prior restrictive direct investment rules and tax codes, with recent financial innovations further underwriting the process.     

The new economic order and world mineral production and trade

World mineral production is dominated by the developed countries — the developing countries dominate production of only tin, cobalt, bauxite, and petroleum. This production pattern is largely the result of historical, political, and economic factors, and is not likely to change radically in the next decade. Apart from petroleum, there seems to be little opportunity for the formation of mineral-producer cartels, although there is considerable scope for constructive producer-consumer agreements. Given the pattern of world mineral production and trade, the developed countries would on the whole benefit more than the developing countries from price increases. The most acute present need is for new means of financing exploration and development of mineral deposits in the developing countries, and for means of redressing the worst imbalances between rich and poor nations outside of the commodity arena.     

PETROLEUM IMPORTING DEVELOPING COUNTRIES: A NEW OIL FRONTIER

The majority of developing countries depend on imported petroleum to fulfil most of their energy requirements. Many are not able to do so without substantial assistance from abroad. Meanwhile, various studies indicate the existence of a large undiscovered potential of petroleum resources in these countries. In the following article, the authors review some of the proposals for assistance to petroleum importing developing countries, and, at the same time, launch their own proposal for a modest exploration programme in the least developed countries which could enable them to become self-sufficient in petroleum in the near future.     

An examination of the compatibility of World Bank policies towards population, development and biodiversity in the Third World

This paper addresses the compatibility of World Bank policies towards population growth, development and biodiversity in the Third World. The World Bank has been central to the design and implementation of the Global Environment Facility (GEF), the remit of which includes the conservation of global biodiversity. However, the Bank's influence over the facility has in itself created controversy which may undermine its effectiveness. More significantly, the Bank's commitment to the GEF is subverted by its policies in other social and economic sectors. The World Bank, together with the International Monetary Fund (IMF), directs the structural adjustment of Third World economies through economic deregulation and privatization. This approach exacerbates inequalities and further empowers large landowners who may then displace tenant farmers and claim exclusive rights to former common land. Thus, biodiversity loss occurs as large landowners reorientate the land use towards the production of export goods and dispossessed farmers invade marginal land. Population growth influences biodiversity loss through its contribution to agricultural intensification and the settlement of marginal land. The World Bank encourages this trend through its non-committal approach to population control, but more especially through structural adjustment's positive effect on fertility.     

Integrating fisheries into the national development plans of Small Island Developing States (SIDS): Ten years on from Barbados

The development and effective introduction of strategies designed to ensure the ecologically and economically sustainable utilization of coastal and marine resources is perhaps the major challenge for Small Island Developing States (SIDS). In response, the 1994 Barbados Programme of Action (BPoA) called upon the SIDS to implement appropriate coastal and marine strategies and, crucially, ensure that such strategies were integrated into sustainable national development plans (NDPs). This article examines the extent to which contemporary NDPs and donor support programmes have incorporated the fisheries sector — arguably the most important coastal/marine resource for many SIDS — into such documents. Applying an assessment methodology, originally developed to identify levels of environmental mainstreaming within World Bank country assistance strategies to NDPs and donor support programmes, we are able to identify those SIDS who have most effectively integrated the fisheries sector into such documents. Comparison with data indicating the importance of the sector to the national economy (in terms of generating foreign exchange, employment generation and/or supporting domestic protein consumption levels) enables us to pinpoint those countries with substantial fisheries sectors, but a correspondingly lower than expected degree of sectoral mainstreaming. We suggest that the January 2005 review of the BPoA offers an opportune moment for such countries to redress these omissions.     

Oil Funding and International Financial Arrangements

The traditional source of funds for exploration and development of petroleum resources has been privately-owned petroleum companies. However, many of these same companies have recently borrowed heavily to finance their acquisitions of other petroleum companies. This may limit the ability of those companies to finance future exploration and development efforts, particularly in developing countries. Special financial arrangements may be needed if the funds required are to be available. The form of such arrangements is discussed, and emphasis is placed on the need to reconcile the differing needs of borrowers and lenders.     

Making private capital flows to developing countries environmentally sustainable: the policy challenge

The 1990s have seen a dramatic shift in capital flows into the developing world. Despite pledges made at the 1992 UNCED Conference in Rio de Janeiro, official development aid has declined in real terms. At the same time, private direct investment and lending to developing countries has risen from $44 billion at the beginning of this decade to $256 billion in 1997, supporting a record economic boom in the developing world. Developing countries have become significant sources of capital, as well as hosts to transnational corporations.
Cases illustrating the negative impacts of large investments under environmentally lax conditions are contrasted with the rise of environmental screening of funds by commercial entities, such as banks, insurance companies and investors. Although the new inflows of foreign capital may have brought the spread of Western consumerism, this new economic potential has also contributed cutting-edge environmental technologies, that may assist developing countries leapfrog over the most damaging phases of industrialization.
The article discusses the role of public lending agencies, international organizations and NGOs in setting the investment climate that determines the effects of foreign capital on the natural resources base, communities and the environment. Various mechanisms for defining environmental standards are discussed, and a more active role for governments and the United Nations is advocated.     

Innovative Approach to Financing Energy Conservation Investments in Developing Countries

A common barrier to undertaking conservation measures in developing countries is the limited ability or the reluctance of energy users to acquire and deploy the capital needed to develop these opportunities. Industrial firms, for example, have had frequent opportunities in recent years to benefit from the use of new, more energy-efficient production technologies, but insufficient internal cash, combined with an ability to raise debt or equity capital under favourable terms, have often prevented firms from funding these investments.
Confronted with such impediments to mobilizing capital for conservation investments, some financiers and entrepreneurs in industrialized countries have recently implemented five innovative arrangements for financing conservation and other energy-related investments. These five financing arrangements are discussed. For each arrangement, the structure and operation, the distribution of risk between the energy user and the creditors/external investors, and the financial benefits that accrue to the energy user are described.     

Permanent Sovereignty Over Natural Resources

In the 1960s and 1970s, the principle of permanent sovereignty over natural resources was vigorously expressed by oil-producing developing countries, through a series of measures to increase revenue from, ownership of, and effective control over the petroleum sector. Such recent significant developments as OPEC's crude oil price reduction, favorable tax treatment of transnational oil companies in the industrialized countries, the entry of the World Bank onto the international pertroleum scene and increasing competition among developing countries for scarce company exploration funds have combined to create a new, more difficult environment, in which further progress toward full sovereignty over petroleum resources will be achieved more by countries' own efforts, and less in the context of host country-oil company negotiations. Le principe de souveraineté permanente en matière de ressources naturelles a été exprimé avec vigueur par les pays producteurs de pétrole en voie de développement au cours des decenics de 1960 et 1970 par une série de mesures visant à augmenter les revenus, les droits de proprieté et le contrôle effectif afférents au secteur pétrolier. Des éléments nouveux importants, tels que la baisse des prix du brut OPEP, les structures de l'ompót qui favorissent les sociétés pétrolieres transnationales des pays industrialisés, l'entrée en scène de la Banque mondiale en ce qui concerne le pétrole sur le plan international, et la concurrence croissante des pays en voie de développement pour les rares financements d'exploration par les sociétés privécs ont contribué à la création d'un milieu nouveau et plus ardu au sein duquel un nouveau progrès vers une souveraineté totale en matière de ressources pétrolieres se fera de plus en plus par les initiatives propres des pays et de moins en moins dans le contexte de négociacions entre les pays et les sociétés pétrolieres. En las décadas del 60 y 70, el principio de soberanía permanente sobre recursos naturales fue expresado vigorosamente por los países en desarrollo productores de petróleo, a través de diversas medidas con el objeto de aumentos el ingreso del sector petrolero y reafirmar el control y propriedad sobre éste. Nuevos hechos tales como la reducción del prccios acordados por la OPEP, impuestos favorables para las compañías transnacionales, la participatión del Banco Mundial en el sector del petróleo y la creciente competencia entre países en desarrollo por escasos fondos para exploración petrolera han creado un ambiente diffícil en el que la total soberanía sobre los recursos petroleros se obtendrán más por esfuerzo propio de los países y menos dentro del contexto de negociaciones entre país y las compañías de petróleo.     

Energy policies and collective self-reliance of the Third World

This paper reviews the broad pattern of energy use, output and consumption. The voracious consumption of non-renewable energy resources by the developed countries could exhaust this asset just when the accelerated development of the Third World would begin to gather momentum, thus denying them for their own use what is primarily their major resource. The paper underlines the critical importance of cooperative policies aimed at collective self-reliance of the Third World to ensure adequate availability of energy for its development.     

Environmental and habitat management: the case of Ethiopia and Ghana

This article examines the environment and habitat management experiences of Ethiopia and Ghana in the postindependence period (1960–2000). Based on extensive archival research, semistructured focused interviews of environment and habitat officers of the World Bank, the United Nations System and the International Union for the Conservation of Nature (IUCN) and personal professional field experiences, the paper argues that the uncritical adoption of externally generated discourses, narratives, policy guidelines, and strategies of environmental and habitat management has structured thought and action in both countries. The experience of both countries in defining and responding to environmental and human settlement management is explored from a political ecology perspective. The analysis indicates that both countries have essentially adopted a technocratic, state-centered, and unsustainable management strategy framework based on population control, poverty reduction, sustainable development, and capacity-building. It also suggests that international organizations such as the World Bank, INCN, and the United Nations system have been important sources of thought and action in both countries. Conversely, regional international organizations such as the Economic Commission for Africa, the Organization of African Unity and the African Development Bank have largely served as conduits for the diffusion of global discourses, narratives, policies and strategies. The need for adopting management policies and strategies that are based on principles of multiple engagement, decentralization, incentives, public education, and participation is underscored.     

SOVEREIGNTY OVER NATURAL RESOURCES AND THE SEARCH FOR A NEW INTERNATIONAL ECONOMIC ORDER

The norms embodied in the United Nations resolutions on permanent sovereignty over natural resources are held to be an adequate general framework for equitable international co-operation in the field of natural resources. While some developing countries, notably the petroleum exporters, have recently managed to translate these norms into a living reality, for many others, notably the least developed countries (LDCs), they still represent little more than an abstract ideal. Lacking the necessary means to locate and develop their own natural resources, the problem of the LDCs is not only how to obtain outside assistance, but also how to ensure that the conditions for such assistance conform to the letter and spirit of the above-mentioned resolutions. Since the international public sector has been very reluctant to provide the LDCs with effective financial assistance in the field of mineral and petroleum exploration, their main source of assistance has so far been the foreign private sector. The new policy announced by the World Bank in this regard, although commendable, nevertheless falls short of meeting the real needs of these countries. The international public sector is called upon to assume a more decisive role in assisting the LDCs to develop their potential natural resources. One of the main goals of this expanded role is to enable them to obtain from the transnational companies contractual terms which are more in conformity with the United Nations resolutions on permanent sovereignty. Les normes que renferment les résolutions des Nations Unies sur la souveraineté permanente en matière de ressources naturelles sont considérées comme un cadre général adéquat pour une coopération internationale équitable dans le domaine des ressources naturelles. Tandis que certains pays en développement, notamment les pays exportateurs de pétrole, ont réussi récemment à appliquer ces normes à la réalité, pour d'autres, et en particulier les pays les moins avancés (PMA), ces normes constituent un peu plus qu'un idéal abstrait. Dépourvus des moyens nécessaires pour localiser et mettre en valeur leurs ressources naturelles, ces PMA doivent faire face à un double problème: d'une part, obtenir une assitance extérieure et de l'autre, s'assurer que les conditions d'une telle aide soient conformes à la lettre et l'esprit des résolutions mentionnées ci-dessus. Depuis que le secteur public international s'est montré réticent à l'égard de ces pays en matière d'assistance financière effective dans le domaine de l'exploration minière et pétrolière, leur principale source d'assistance a été jusqu'à cette date et secteur privé étranger. La nouvelle politique annoncée par la Banque mondiale à cet égard, bien que louable, ne répond cependant pas entièrement aux besoins réels de ces pays. Le secteur public international devrait jouer un rôle plus décisif en matière d'assistance aux PMA en ce qui concerne la mise en valeur de leurs ressources naturelles éventuelles. Un des buts principaux de ce rôle plus actif consiste à permettre à ces pays d'obtenir des sociétés transnationales des termes de contrats plus en accord avec les résolutions des Nations Unies sur la souveraineté permanente. Las normas comprendidas en las Resoluciones de las Naciones Unidas a cerca de la soveranía permanente sobre recursos naturales se consideran un marco general adecuado para una cooperación internacional equitativa en el campo de los recursos naturales. Mientras que algunos paises en desarrollo, especialmente los exportatores de petróleo, han logrado recientemente trasladar estas normas en realidad viviente, para muchos otros, especialmente para los paises menos desarrollados, esta normas representan un poco mas que un ideal abstracto. Debido a que carecen de los medios necesarios para ubicar y desarrollar sus recursos naturales, el problema de los paises menos desarrollados no consiste solamente en cómo obtener ayuda externa sino tambien en cómo asegurar que esta ayuda se ajuste a la letra y espiritu de las Resoluciones arriba mencionadas. Puesto que el sector público internacional ha estado muy renuente a proveer a los paises menos desarrollados asistencia financiera efectiva en el campo de la exploración petrolera y de minerales, su fuente de asistencia ha sido hasta el momento el sector privado extranjero. La nueva política anunciada por el Banco Mundial a este respecto, aunque laudable, está lejos de satisfacer las necesidades reales de estos paises. Se hace un llamado al sector público internacional a asumir un rol más decisivo en la asistencia de los paises menos desarrollados para desarrollar el potencial de recursos naturales de estos paises. Uno de los mayores objetivos de este mayor rol es el de posibilitar que estos paises obtengan de las compañias transnacionales condiciones contractuales que esten en conformidad con las Resoluciones de las Naciones Unidas sobre soveran ía permanente.     

Third world debt must grow

Summary Approximately 60 percent of the debt owed by the World's Developing Countries is to the international banks. The author gives an economic analysis of the situation and concludes that real growth for the less developed countries (LDCs) will justify further increased borrowing.Malcolm Crawford is Senior Economist (Finance) with Business International UK Limited. This paper is based on an article which first appeared inLloyds Bank Review, January, 1985. The updating preceded the Baker Initiative in October 1985, in which the US Treasury Secretary announced proposals for increased lending by banks and international organisations to 15 selected debtor countries.     

The relationship between resources and living standards

Available estimates of potentially recoverable world mineral and fuel resources are examined with a view to determining whether everyone likely to be living on earth next century could be raised to the material living standards people in developed countries now have. It is concluded that this goal is impossible. A number of fundamentally important implications follow, especially regarding the inappropriateness of growth strategies in general, goals for Third World development, and the need for ‘de-development’ of developed countries to much more frugal, self-sufficient and cooperative social systems.     

Seabed resources and international law

This article outlines the problems related to the exploitation and allocation of undersea resources. The nature and accessibility of undersea petroleum supplies and metalliferous nodules are described in terms of the existing and prospective future economic constraints. Since the majority of such resources lie outside national jurisdictions, their ownership has recently become a major source of international conflict. The character of that conflict is explained, and the prospective solutions under international law are identified. Unilateral action on the part of countries possessing the requisite technologies to exploit these resources is viewed as the most probable near-term outlook, even though it may not satisfy very many aspects of international equity.     

Political Risks of Transnational Petroleum Investment: the Mitigating Role of National and International Insurance Programmes

As in the case of all foreign investments in general, political risk has been one of the more serious inhibiting factors in petroleum operations by transnational companies. In practice, however, these risks can be significantly mitigated or eliminated altogether, through the insurance programmes which are normally available to all foreign investors. This article reviews the petroleum activities of some of such programmes, notably those sponsored by the US Federal Government under the Overseas Private Investment Corporation (OPIC) and, more recently, by the World Bank under its newly created Multilateral Investment Corporation Agency (MIGA).     

The agricultural development of sub-Saharan Africa

A study prepared by FAO on the irrigation potential of sub-Saharan Africa is compared with the results of a similar study by the World Bank. The FAO study estimates that there are approximately 33 million hectares potentially suitable for irrigation. The World Bank study indicates that the actual number may be closer to 20 million. Reasons are offered to explain the difference in the conclusions of the two studies. This paper also examines the cost of developing irrigation in the sub-Sahara as well as the food-producing potential from irrigation. Costs are found to be in line with irrigation schemes of similar size in other regions. Nevertheless, because much of the irrigation potential is located in only six countries, irrigation does not appear to be a viable means of agricultural development in the sub-Sahara.