Speech by Mr. Mutsuyoshi Nishimura
Ambassador for Global Environment

At a Workshop on the Kyoto Third World Water Forum
"Water From Johannesburg to Kyoto and Beyond"

At the Woodrow Wilson International Center for Scholars
February 12, 2003

Speeches on water usually begin by presenting a barrage of tragic realities and forlorn prognostications. Today, I won't adopt such an approach because all of you are so familiar with those things. Instead, I'd like to begin with something that may be new to you.

Many of you have most likely sampled, at least once or twice, the symbol of Japanese cuisine, sushi. But do you know the genesis of sushi?

Aside from the "California Roll", sushi is made from all sorts of raw fish in the palms of bare hands. If you ever peer over the sushi counter, you'll discover that the chefs use water constantly for many purposes. A clean kitchen environment, with good hygienic water management, is a must.

Actually, sushi is not an invention of modern day, pristine Japan. It first appeared in the Edo era, and became popular around 1800. Given the need for clean water, it seems rather extraordinary that the people of Tokyo, one of the world's largest cities even 200 years ago, were able to enjoy sushi. Isn't it rather remarkable when you remember that epidemics of water-related cholera assaulted places like London and Chicago around the 1850s?

My point is that water is an intrinsic part of our culture and that the water culture is our lifeline.

From a national perspective, Japan is very fortunate to be endowed with an abundant supply of top-quality water. But, water transcends all national boundaries. It is truly global. It is recycled worldwide. All of us, from one corner of the planet to the other, depend mutually upon it.

There is another kind of dependency as well. The concept of virtual water, that is, water that goes into production and is traded between countries, is most evident in Japan because it is one of the largest importers of commodities.

Simply, we are dependent upon water in other countries. As goods are produced, water is consumed. For the immense quantities of corn, soybeans and beef that Japan imports from the U.S. every year, tons and tons of American water are used. Beef production requires a particularly high level of water consumption. According to one study, 100 grams of beef, mind you, not 100 kilograms, require a staggering 9.3 tons of water.

As Japan continues to import a huge volume of American corn, soybeans and beef etc., it is increasingly concerned about the declining level of America's water table, just as you are.

To further complicate the situation, the vast global problems of development, equity, inequality, poverty and human dignity, all relate to water.

Throughout the 20th century, population growth, combined with increased urbanization, expanded human activities, escalating production and the need to ensure high-quality ecosystems, contributed to an explosion in the demand for water. The supply of water simply has not kept pace.

As a consequence, the entire world now faces a real crisis. Water tables are declining. Many rivers no longer reach the sea. Deltas and wetlands are disappearing. Aquifer levels are falling. And biodiversity is in peril.

For billions of people, clean water is not available. It is polluted. Lack of safe water and sanitation means poverty, disease, misery, and above all, denial of human dignity. Access to safe drinking water and sanitation is an inalienable human right.

It is no wonder that the Millennium Development Goals established a target to "halve, by 2015, the proportion of people without access to safe drinking water".

To this, the World Summit on Sustainable Development in Johannesburg in 2002 added another critical target to "halve, by the year 2015, the proportion of people who do not have access to basic sanitation".

Achieving these complementary goals, however, requires an enormous amount of investment in water supply and sanitation.

So, how is the report card?

As of 1995, total global investment in water supply and sanitation reached about $30 billion per year. Yet, World Water Vision says that for the two targets to be achieved, something on the order of $75 billion must be invested annually. Roughly speaking, we must double our investment beginning today. And that doesn't even include the cost of renovating the current water infrastructure.

Of the $30 billion presently provided, bilateral ODA accounts for only a tiny fraction, or about $3 billion. Added to this is $1 billion to $1.5 billion a year in concessional lending from the World Bank and other institutions. The balance of almost 90% of the total investment to poorer countries is being funded by the private sector.

Speaking about ODA first, the handout shows that of all the individual donors of official funds, Japan is by far the largest donor in the water sector. It contributes about one-third of such global aid to the developing countries.

While this illustrates the strong commitment of my Government, the rising pressure of spending cuts is gradually challenging the funding level. The same is true for most donors. Generally speaking, the level of official aid is declining, if it is not stagnating.

This trend is inevitable as globalization intensifies. Every country must balance its budget, reduce the role of government, release resources from government control, promote private sector initiative, encourage efficient resource allocation, and even scrap programs such as social security etc. The market signal is the only signal you have watch.

Foreign aid is the first casualty in this new paradigm of a global market economy.

The United States, nonetheless, made a bold turn after September 11, and announced its intention to increase development assistance. Hopefully, this step will ignite a renewed global commitment.

Another development is also worrisome.

According to OECD analysis, aid activities in the water sector have been highly concentrated in a relatively small number of recipient countries.

In 1995 and 1996, for example, nearly two-thirds of total aid to the water sector was provided to only 14 recipients. They are China, Egypt, India, Indonesia, Jordan, Malaysia, Mexico, Morocco, Peru, Sri Lanka, Tunisia, Turkey, Vietnam and the Palestinian administered areas. Apparently, the countries most in need, that is, the African nations, are being sadly overlooked.

Yet another unfortunate trend is that while projects in relatively rich countries may target the poorest regions or groups, projects in poorer countries tend to benefit the better off. In many countries, those with water connections pay a very small fee while those in the poorer areas without water connections must pay a high price for badly treated water delivered by cistern cart.

Clearly, ODA alone is not the solution. Private participation must be encouraged. As we all know, most OECD countries have been moving away from the "fully public" model in recent years.

This development can be seen in developing countries as well. The private sector and non-governmental organizations are becoming more active in providing water supply and sanitation services.

The advantages are obvious, particularly in:

However, some downsides need to be addressed.

Equity is the primary concern. In most cases, low-income people cannot pay for water service. Providing a clean, affordable water supply for the poorest citizens requires separate treatment.

Then there are the fundamental challenges. How can private investment be encouraged in the most needy countries where investment appears least likely? How can risk be mitigated in countries where there is high risk and low return? And, how can the proper regulatory framework be established and implemented with scarce human resources? The list of challenges goes on and on.

Because of these and other challenges, water service is not reaching to the people most in need.

According to one study, private sector water service is effectively not available in South Asia. In Middle East and Africa only 3% have private service, whilst in central and South America, 16% receive private sector services.

Let's look at the breakdown for the world's 6 billion people is:

There is no question that a new mechanism must be introduced

With these requirements in mind, The International Panel on Financing Water Infrastructure has been commissioned to define new strategies and present them at the Kyoto Forum. This is going to be one of the key discussion topics at Kyoto.

Kyoto will also emphasize the value of good governance, ownership, and capacity building.

The donor community is now providing increasing resources, both financial and technical, so that developing countries can:

By the way, I recently ran into a European expert. And we discussed the water issue in the developing countries.

I mentioned that I'm quite pessimistic about the future because of the huge financial gap.

He replied, "Don't despair, there is hope. If only they incorporated all of these things such as good governance, capacity building, and integrated water management into their national poverty reduction strategy...."

I'd like to believe him because of his extensive experience. But I'm a bit skeptical.

Before concluding, let me outline what the Government of Japan intends to do in the water sector in the near future.

First of all, as I have mentioned earlier, we have long been the largest donor in the area of water in general by contributing 33 % of the total official aid of water supply and sanitation.

In so doing, our aid program has 4 pillars.

The first is our continued emphasis on grant aid, which targets safe drinking water and sanitation. This is our main policy tool to join the global struggle to help poorest countries.

The second tool is the provision for a very concessional loan (0.75%) for infrastructure construction.

This has long been our largest aid program in terms of volume. We will continue to provide loans for constructing infrastructures to supply drinking water and sewage service in the poorer countries.

This loan program is significant on its own merits but more importantly, the infrastructures thus constructed will serve as a catalyst for private sector participation.

In most developing countries, the lack of infrastructure is in itself an impediment for the private sector participation. Infrastructure construction funded by official assistance from donors governments decreases investment risks and facilitates wider private participation, which can serve the poorer segment of the population.

The third pillar is our strong emphasis on capacity building.

The fourth pillar is forging international partnerships. The US-Japan Water Initiative, which began last year, is one such partnership.

The basic idea of the US-Japan Initiative is to focus jointly certain African countries and mobilize our resources intensively. This is a top-notch program, and we truly look forward to pressing ahead. We will be fostering similar partnership with other countries.

Today, I have deliberately focused on water and sanitation, which constitute just part of an enormous problem. And I'm certain that Kyoto will address all aspects of the water problem.

We need to discuss energy and water. Irrigation is a huge problem since it accounts for 70 percent of water usage. Trans-boundary issues are also important. Water pollution must be addressed. Hygiene practices in households should be emphasized. More focus on integrated river basin management is needed. And drought and desertification remain issues of life and death in many countries.

Kyoto must also emphasize a holistic approach. Water is essential for poverty reduction and economic growth. It relates directly to development. Therefore, integrated water resources management is crucial, and must be incorporated into national plans for development and poverty eradication.

A holistic approach must place hydropower in the right context. Despite many discussions, hydropower remains a key factor in ensuring a sustainable supply of water and energy in many developing countries.

Our endeavor is moving forward. Nonetheless, even if a titanic action was taken and targets met, one out of two people in the world would still be without clean water and sanitation.

It is such a shame. No water and no sanitation may result in disease and inconvenience for 10-year-old boys and girls, and that is unacceptable.

But, for 20-year-old young men and women, for 45-year-old middle-aged men and women, and for 75-year-old seniors, it means humiliation, anger and despair.

The Kyoto Water Forum and the Ministerial Conference are important occasions to recognize this reality and to move ahead once again with a renewed commitment.

Yet, the Kyoto Forum and Ministerial, by themselves, are not the entire solution. They are only part of a long battle, a battle that we will one day win.

The winning strategy remains elusive, though. I personally cannot help but wonder whether victory can only be achieved if the world population declines. Such a thought underscores the gravity and the immensity of the challenge before us. Such a thought gives me great pause, as I am sure it does you as well.

Therefore, the road ahead is by no means bright.

Yet, individual efforts by donors, international agencies, NGOs, and above all, by developing countries, their communities and their leaders are yielding tangible results. Thailand, for instance, is succeeding in implementing the crucial integrated water management.

Moreover, a massive capacity building process is now underway. Some African countries are beginning to achieve a degree of ownership. They are starting to gain ground by themselves. Technological innovation and transfer are being realized. A network of information is spreading globally. Solidarity is growing.

So, we should not despair. Kyoto is the hope for billions of people. We must be steadfast in our mission and we must go forward in this long battle.

This is not an exaggeration. Water offers an extraordinary opportunity for the world community to achieve;

As the two largest donors of global aid, particularly in the water area, Japan and the US share a special responsibility to fight this fight. Few cases are as compelling as this for our two countries to join hands, and to work together for the benefit of all others.

(End)

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