*Making Water Reform Happen in Mexico*

 

"The OECD Report “Making Water Reform Happen in Mexico” will be officially launched next 8 January 2013 in Mexico City in a public event with Angel Gurria (Secretary-General of the OECD), Juan Jose Guerra Abud (Minister of the Environment of Mexico) and David Korenfeld (Director-General of the National Water Commission of Mexico)."

Remarks by Angel Gurría, OECD Secretary-General

Mexico City, Tuesday 6 November 2012

(As prepared for delivery)

"Director-General of the National Water Commission, Senator Ernesto Cordero Arroyo, Senator Emilio Gamboa Patrón, Senator Aarón Irizar López, Congressman Gerardo Gaudiano Rovirosa, Licenciado Raúl Rodríguez Márquez, Senators, Ladies and Gentlemen:

It gives me great pleasure to be in our country’s Senate of the Republic to share with you the diagnostic study and recommendations contained in the OECD report on "Making Water Reform Happen in Mexico." Managing water resources is one of Mexico’s greatest challenges.

The OECD has often lauded Mexico’s “Water Agenda 2030” as a clear political commitment to develop a long-term strategy and lay sound foundations for a more integrating form of growth that respects the environment. This effort has generated a new momentum for change — an impetus to take firm steps in designing and implementing a more effective, integrated, and coherent water resource policy.

Our country can no longer afford the luxury of “more of the same”. With over 110 million inhabitants, several river basins are under severe water stress, the quality of rivers, lakes and aquifers is at stake and safe drinking and adequate sanitation will need to be provided to an additional 40 million inhabitants by 2030; all  at a time when we are increasingly vulnerable to flooding, droughts, and hurricanes.

Addressing these problems effectively and in time requires a clear identification of the factors that could help in making water reform happen, and also of the factors that could obstruct it, and measures to overcome these obstacles.

For that reason, over the past nine months, the OECD has been working closely with the National Water Commission (CONAGUA) and a group of important stakeholders, to analyse four fundamental dimensions for water reform in Mexico: (1) the coordination of multiple programmes and institutions at different government levels; (2) water governance at the basin level; (3) the economic efficiency and financial sustainability of water policies; and (4) the regulation of service provision.

Drawing on the OECD’s public policy tools and experience, we have formulated recommendations on water reform in Mexico. While we realise there is no universal formula that suits all cases, we have chosen a set of good practices from within Mexico and elsewhere that could be applied and reproduced.

We also make several comparisons with other countries, especially Australia, Brazil, Italy and the United Kingdom — which not only have undertaken deep reforms of their own water sectors at home, but have also shown strong support dialogue on water policies in Mexico as peer-reviewers.

The key findings show that Mexico has a well-developed policy framework for water management. It has various federal and state level institutions, and applies various economic tools — ranging from taxes on water abstraction to water markets. Nonetheless, despite a substantial increase in public investment, Mexico continues to face major challenges in this sector.

First, policy implementation remains uneven; second, the sector lacks co-ordination mechanisms to mitigate territorial and institutional fragmentation; third, twenty years after their creation, river basin councils are not fully operational; fourth, the regulatory framework for drinking water and sanitation is scattered across multiple entities and regulations; fifth, Mexico continues to grant subsidies to other sectors, such as energy and agriculture, which make it difficult to fulfil water resource goals.

Mexico needs to renew its efforts to raise productivity in water supply and improve the cost-benefit of public policies in this sector. This will require addressing multi-level governance challenges to align priorities, expenditures and incentives across federal, state, basin and local water plans and programmes.

Mexico also needs an investment promotion strategy, targeting various low-cost options (such as the construction of green infrastructures or community management), which enhances cohesion among policies that have repercussions on the availability of water and demand for it. A global regulatory framework is also needed to jointly govern water supply and sanitation.  

Next January, I will hand over to the new President elect the OECD final report “Making Water Reform Happen in Mexico”, which is the first OECD country report on water. The study makes a number of specific recommendations, which are summarised in the leaflet we have prepared for this event.

Let me conclude by highlighting some of its main messages:

• First, Mexico has an opportunity to design its own water governance model. As a federal state with huge disparities in terms of water availability and demand, Mexico would benefit hugely from a “tailor-made” policy package, based on empirical analysis. For instance, the responsibilities devolved to one particular state or basin organisation need to match the specific water challenge in this territory and capacities in terms of funding, know-how and reform intentions.

• Second, Mexico needs more flexible water management policies to adapt to the changes that are unfolding in the country. In addition to the repercussions of climate change, there is major uncertainty as to the availability of water and demand for it in the future. Economic instruments, green and smart infrastructures, can help address current challenges while avoiding becoming locked into specific  structures.

• Third, it is time to pay more attention to the cost-benefit of public spending and investment decisions in the water sector. Mexico has significantly increased water-related public expenditures and investment levels. But, in the future, these efforts will benefit users much more if the initiatives are properly co-ordinated between institutions and the different government levels, if additional financing sources are found, and if the incentives for efficient water use are properly designed and aligned. 

• Fourth, access to safe efficient and sustainable water and sanitation services is a key driver of social inclusion and local development. OECD has inventoried a number of regulatory functions which need to be properly designed and allocated in Mexico. Although there are various ways to fulfil these functions in the different states and municipalities, regulatory loopholes need to be addressed, to guarantee sustainable water supply to the population.

Ladies and Gentlemen:

In a country whose population is forecast to be nearly 150 million by 2050, which displays one of the highest levels of inequality in the world in territorial and socio-economic terms, which is highly exposed to the effects of global warming, and where population and economic growth is generated mainly in water-scarce zones — water management in Mexico is becoming a national security issue.

We are therefore very pleased to note that the Mexican government has given prime importance to the issue of water. We are also enthused by the fact that Mexico has laid itself open to international scrutiny and co-operation, and has become one of the countries with which the OECD collaborates most on water management. Working with Mexico has enriched the OECD with new experiences and knowledge. We hope that the diagnostic and conclusions presented today, as well as the final report to be presented to the new government, will also help Mexico design and implement a successful water management policy and become an international example of good governance. The OECD stands ready to continue supporting Mexico in the design, promotion and implementation of better water policies for better lives.

Thank you very much."

*Making Water Reform Happen in Mexico*
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