ABSTRACT
Investments in water resources are investments not merely in the water sector, but in socio-economic development and poverty alleviation as well. When compared with investments in sectors such as telecommunications and energy, these investments may appear to produce low yields and slow returns. But viewed from a national or regional perspective, they can be enormously productive (as well as enormously damaging if badly designed).
Today investment levels in water institutions and infrastructure are far too low, and, worse, funding from some sources is declining. And water prices are too low to cover costs, putting at risk the financial and physical sustainability of water systems. National governments need to come rapidly to grips with the challenge of meeting financing needs in the water sector—for investment as well as operation and maintenance—taking advantage of the aid community's increasingly favourable attitude towards putting funding into water.
And governments need to translate political decisions into adequate allocations of resources to water. The Millennium Development Goals, especially the goal of reducing poverty by half by 2015, cannot be achieved at current levels of spending for water.
