Setting the Scene Knowledge and Capacity – Boundary Conditions to Reality Guy Alaerts 29 May 2013

1. Setting the Scene • Knowledge and Capacity – • Boundary Conditions to Reality • Guy Alaerts • 29 May 2013

2. Contents • Our areas of interest • Four arenas of work • Can we measure impact? • Are we making progress? • This Symposium’s questions

3. 1. Our areas of interest

4. Triggers Poor effectiveness of aid—in nearly all sectors and especially in water After Mar del Plata (1976) and the International Water Supply and Sanitation Decade (1981-1990) … What is going wrong? • It must be … the “capacity” … ! • “staff are not trained or educated properly, • obsolete or “handbook” knowledge, • universities are too academic, • ministries, organizations are unable to use knowledge, • households are not informed about water value, • society unaware of big decisions on climate change”

5. Knowledge and capacity to change institutions PHYSICAL WORLD AND EVENTS = “RESULTS” BEHAVIOR AND INSTITUTIONS Change processes $ KNOWLEDGE AND CAPACITY DEVELOPMENT X Y Area of interest

6. The Water Sector is complex, is knowledge-intensive Technically complex • every 15 years new technologies, science • new concepts – Integrated Water Resources Management, aquatic ecology, dam construction, flood mgmt, land-and-water interaction, agronomy, climate change, etc. • It’s the experts’ business Socially complex • highly distributed stakeholders – everybody makes daily decisions • taxpayers must agree to large investments • many ministries, water boards, municipalities decide on water allocation and investments • very expensive sector because of infrastructure and O&M  It’s the peoples’ business

7. The Water Sector is institutionally complex Our challenge: finding an effective partnership between the experts and the people, between vision and reality. Henry Ford: “If I had asked people what they wanted, they had asked me, make the horses run faster.”

8. Capacity as the new constraining factor Since mid-90s capacity, not financing, is key impediment to sector development: • High observable need, but constrained internal demand • General lack of readiness of projects • World Bank, ADB, AfDB: often cannot achieve lending targets • EU: cannot disburse Cohesion grants to member countries; about 30% or €35 billion does not get absorbed • Forest Carbon Partnership cannot disburse US$600M, other CC funds face similar lack of absorption • US, UK do not have sufficient “pipeline” of investments  Needs major leap in efficiency of institutions and “absorption” capacity within next decade

9. 2. Four arenas of work

10. Arena 1 : Education, research, innovation • Basic education (primary and secondary) • BSc and Post-graduate studies and specializations (expertise) • Relation between curricula , career opportunities and professional demands – quality and quantity • Knowledge institutes and research (Hydromets, …) • Vocational training and Meisterschaften(internships) • Training: professional, task- or skill-oriented • Professional and social networks • Management of teaching institutions • Who will take conceptual and inspirational leadership?

11. Arena 2 : Organizational improvement • Improve the managerial performance of utilities • Human resources management • “Results-oriented” management • Strategic management • Knowledge management • Networks • For • municipal water supply and wastewater utilities; • irrigation organizations and Water User Assocociations; • Ministeries and technical agencies; • Who will be the Leaders for organizational reform?

12. Arena 3 : Communities and civil society • Creating awareness and understanding of water use and value at the local level • Building local governance and accountability • Role of women • Equitability • Identifying and strengthening local, indigenous knowledge • Locality-specific techniques • Who will be the local leaders?

13. Arena 4 : Sector-wide development • Sector-wide policies and strategies • Legal, regulatory, administrative and fiscal regimes • Financial flows and sustainability • National and sub-national networks and communities of practice • International arrangements and cooperation • Global public goods • Forecasting new changes, challenges and opportunities • Taking the leadership of the whole sector– among the water-related institutions

14. 3. Can we measure impact?

15. How to measure? Two options can be considered: • Focus on short-term tangible results, within set time frames and budgets, and with clear accountability / measurability … E.g. World Bank “Tools for Results”  Results Framework (only measures against original project objectives) 2. Focus on longer-term capacity development and service delivery, recognizing endogenous capacity growth, lower plannability…  Thus far, No effort to measure

16. Approaches in measuring capacity • OECD, UNDP, EuropeAid – • stress the complexity nature of capacity and the adaptive management approach • Manuals with laborious capacity assessment • More geared for macro tasks • Capacity measured from Development Results • UNDP (2007): Capacity Assessment Methodology: • starting from Capacity assessment, • then Desired future capacities, • Capacity gap assessment, • Work plan • Mostly for sector-wide or governance areas

17. ADB -- Capacity Development

18. Yet it is possible to measure results and capacity Conventional: budget-driven DESIGN, WORKS, … RESULTS INPUTS CAPACITY DEV But Operational research in Utilities shows capacity is part Tool, part Result; can also be measured DESIGN, WORKS, … RESULTS INPUTS CAPACITY DEV : PROF. CONFIDENCE BETTER PROCEDURES OPENNESS INSTITUTION, SERVICES

19. Does investment in Knowledge and Capacity pay off? • Very few efforts to quantify ERR • Education: • Long-run effect of 1 additional year of education in OECD area == 3 – 6% increment in GDP/cap. • Each university degree contributes an incremental net US$119,000 in income taxes and social contributions (over lifetime). Degrees secure jobs (OECD 2010) • Netherlands Central Planning: Investment in education and innovation is treated as “without return”. • Sector capacity: (WBIndonesia Irrigation Improvement): • Physical rehabilitation  ERR = 10 - 18 % • Capacity development only  ERR = 20 – 30 % • Rehab + enhanced capacity  ERR = 30 – 40 %

20. Innovation spurring decline in labor price of light Industrial revolution

22. 4. Are we making progress ?

23. Greater understanding: Principles of KCD “Capacity is the capability of individual, institution or society to • identify and • understand its development issues, • act to address these, and • learn from experience and accumulate knowledge for the future.” Alaerts, ECDPM

24. Greater understanding: Four levels, four competence sets

25. Greater understanding: Principles of KCD Two basic approaches in KCD: 1. Capacity is developed through inputs, leading to better results positivist approach, assuming causal relations between input and output 2. Capacity emerges from complex interactions, partly endogenous, partly exogenous  non-plannable, prioritizes capacity, not results, stresses need for adaptive management “What works” can be either, or a combination …

28. Growing investment • World Bank invested over US$1 billion in African CD since 2000 • ADB, KfW, GIZ, DGIS … • Growing number of dedicated networks: Cap-Net (2002), Indonesian Network, ICID, GWP, …

29. WBI – Knowledge Economy Index and Knowledge Indexmany regions score low

30. WBI Knowledge &Economy Indexes

31. BUT: KI across most of the world is stagnating or declining

32. African government capacity has seen decline WB review of Africa capacity development(2006): • TA and training ineffective to build sustainable public sector capacity. • While some countries do well, average SSA govt capacity has stagnated …

33. Structural challenge: staff capacity erosion Case: Indonesia DG Water Resources – 2005 – 2020 serious erosion of skills, tacit knowledge Case: Netherlands – • 2012: across all sectors 150,000 technical jobs vacant, of which 35,500 at BSc/MSc level • Greying of personnel in water agencies, structural shortages emerging since 2000 • Rijkswaterstaat reform 2004-2007  loss of 20% of skilled staff due to early retirement, shift from substantive to process knowledge

34. Erosion of professional staff and senior staff:Change of Age Structure, Indonesian DG Water Resources

35. Erosion of professional staff and senior staff:Netherlands, all technical sectors, and water sector

36. This decade: progressing greying in OECD –will be followed by quick staff loss

37. 4. This Symposium’s Questions

38. Conclusions • Knowledge and capacity are key to sustainable development, and increasingly so • Progress has been made on some counts, esp. water supply • But generally, we are observing deterioration of capacity, not improvement • We stand to gain a lot from improving the effectiveness of capacity development • We can increasingly measure impact, assess capacity levels, and monitor progress

39. Our agenda for this Symposium • Who’s taking the lead in Capacity Development? • How can countries strengthen their institutions for the water sector? • What types of Capacity Development activities are required (and who should do this)? • Propose: • Two concrete and realistic follow-up actions, • Initiatives to foster and strengthen water leaders, • Three significant policy or action recommendations to upcoming related events: • the Budapest Water Summit (8-11 October 2013), • the IWA Development Congress (14-17 October 2013), • the seventh World Water Forum (2015), and • the formulation of the new water-related Sustainable Development Goals (SDGs).

40. Purpose of 5th Symposium • I wish you wisdom! Thank you for your attention Guy Alaerts Unesco-IHE g.alaerts@unesco-ihe.org