International Waters Funding Dialogue
Funding is a decisive issue for any development project, but international water projects face additional hurdles by working multilaterally in an arena dominated by bilateral funding. Funders and fundees (recipients) have different expectations regarding agendas, timelines, goals, and conditions, which can create conflicts that severely endanger projects. Fundees can become overburdened with reporting and program requirements if donors do not coordinate their efforts, and funders often impose their internal priorities on fundees without careful consideration of local needs or conditions. To address the disconnects that often undermine project design and implementation, both sides must establish an open dialogue to jointly develop common means and ends.
From June 9-11, these issues were tackled head-on in a three-day International Waters Funding Dialogue conference hosted by National University of Costa Rica's Mesoamerican Center for Sustainable Development of the Dry Tropics (CEMEDE) in Nicoya, Costa Rica. The meeting featured a facilitated, multi-directional dialogue among 25 experts in international water issues, including representatives from funding agencies, NGOs, and the Universities Partnership for Transboundary Waters, a consortium of ten universities that documents and facilitates activities related to transboundary waters.
The participants sought to identify and understand the differences between funders and fundees in order to improve the implementation of international water projects. They focused on goals, timelines, constraints, and support, which are the major issues subject to miscommunication and lack of coordination. Six questions guided the discussion:
- How do funders define success?
- What are the hurdles to matching long-term financial commitments and long-term water challenges?
- What are the mechanisms for gathering and integrating local methods and local needs assessments? How can they be improved?
- How can the water community share lessons across basins?
- How can the water community share lessons among multilateral and bilateral donors?
- What are the mechanisms for local populations and local expertise to participate in international decisions? What are lessons from past experiences?
One participant, representing a G8 national aid agency, pointed out that donors need short and medium-term successes to sustain long-term commitments. Funders believe fundees and their projects that seek long-term financial support should view donations as seed money to jump-start transboundary efforts; in the long run, national governments and basin institutions should support these efforts without significant external support. Organizations seeking funding for large-scale capital investments may need to find innovative ways to finance their projects, such as through "partial loan guarantees" to local banks, which would provide viable local non-sovereign lending. Domestic politics in donor countries also matter: new political administrations can change funders' priorities, impacting long-term projects and making it difficult to promise extended funding commitments.
Another speaker, representing the views of fundees, assessed Southern African transboundary water issues and lessons for donor-fundee interactions. In addition to familiar power imbalances such as North/South and funder/fundee, transboundary water projects must contend with an upstream/downstream divide that allots nations different degrees of control over water management. Management capacity also plays a role in power imbalances; low capacity states like Zambia, Malawi, and Mozambique have different water management goals than high capacity states like South Africa. Donors should recognize the specific, historical needs of recipients, particularly in post-conflict reconstruction. Critical factors for successful projects include respect for local participants, good leadership, innovative thinking, accountability, long-term relationships, and functional partnerships.
Capacity is a key issue. One participant stated that we should move from building capacity to enhanced capacity sharing, while others argued that capacity building was necessary to improve access to resources. Funders do not want to fund staff, one attendee pointed out; they want to fund programs. The group agreed that many funders need to move beyond a persistent paternalism and stop relying so heavily on outside consultants.
How can organizations build sustainable partnerships? The typical funding timeline presents a serious problem: trust building and recruiting regional capacity are long-term activities that are undermined by short-lived grants. One solution could be to develop a critical mass of local technicians so that capacity is retained even after the consulting company leaves or the project's goals are met.
The participants—academics and practitioners representing all the major regions in the world—plan to advance these ideas from the conference with their respective river basins. The Universities Partnership, founded by Aaron Wolf at Oregon State University and now chaired by Anthony Turton of the University of Pretoria, will also integrate the lessons learned into its advisory and pedagogical work.
The meeting supplemented the work of the Environmental Change and Security's Navigating Peace Initiative, which brings together diverse sets of individuals to generate new ways of thinking about conflict and water policy. Conference participants Aaron Wolf and Anthony Turton are members of Navigating Peace's Water Working Group II, which seeks to identify trends in water conflict and cooperation, with the aim of developing paradigms, methods, and tools for analyzing water's role in human security.
This conference was a joint effort of the National University of Costa Rica's CEMEDE; the Pacific Institute for Studies in Development, Environment, and Security; Oregon State University's Universities Partnership for Transboundary Waters; and the Woodrow Wilson Center's Environmental Change and Security Project. It was held with generous support from the Carnegie Corporation of New York and the United Nations Office of Project Services.