PSIA (Poverty and Social Impact Analysis)
Report
Background
In 2004, the Government of Yemen’s Ministry of Water and
Environment developed a National Water Sector Strategy and
Investment Program (NWSSIP), a comprehensive 5 year action plan
(2004-2009) and investment program to reform the water sector in
collaboration with a range of in-country stakeholders. To
support a policy dialogue for implementing NWISSP, the
Government, the World Bank and GTZ carried out a Poverty and
Social Impact Analysis (PSIA) in 2005 to assess the impact of
NWSSIP reforms on rural water supply and sanitation, irrigation
and groundwater extraction and the political economy within the
entire water sector.
The PSIA process for Yemen’s water sector reform program was a
joint exercise between Yemen and its external partners and an
interim report was produced in June 2006. The main mission was
undertaken in November and December 2006, during which
stakeholder consultations and a stakeholder workshop were
conducted and fieldwork was undertaken and completed. A draft
report was prepared and circulated in English and Arabic to a
wide audience in Yemen and a second workshop was held in March
2007 to discuss the findings.
Main message of the PSIA
The overall expectations of the Yemeni people regarding NWSSIP
are that if all reforms are implemented effectively aquifers
should stabilize in the long term, returns to agricultural water
should increase, farm incomes should stabilize, rural people
would have access to safe water and the incomes and employment
of the poor would be protected. Although it is early in the
reform process, the conclusions of the PSIA – based on measures
so far, particularly the increases in diesel prices and the
implementation of agricultural water productivity and rural
water supply programs – is that in theory these expectations are
reasonable but in practice the results will be uneven over time
and the impacts will likely to vary across different social
groups and geographical locations.
The effects already observed confirm that positive impacts may
be maximized and negative impacts minimized when a full range of
reforms is applied simultaneously. By contrast, leading with
reform of the incentive structure alone risks having a negative
impact on the poor if diesel price increases are not accompanied
by implementation of other reforms at the same time. This is
exactly what has happened over the last two years – prices have
gone up but most people have had no available response
mechanisms to compensate their additional expenses. As a result,
the NWSSIP reforms to date may be saving water but risk
depressing the rural economy with particular risk to the
employment and subsequent incomes of the poor. Clearly, NWSSIP
is best implemented as a reform package and the sequencing and
dosage of reforms and support are important.
Prices have gone up and some water is being saved: Now there a
need for (massive) support to productivity in order to restore
incomes. This is the most important message of the PSIA.
The final report will be available in the near future on this
web page.
May 2007
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