1. Decentralization of Water Supply and Sanitation Services in Latin America Role of USAID Morris Israel Fred Rosensweig

2. Objective Share findings of current USAID activities on decentralization of water supply and sanitation in Latin America

3. Overview of Session  Definition of decentralization  Objectives of decentralization  Context  Key issues  Problem  Description of activity  Key findings  The future

4. Definition of Decentralization Devolution Deconcentration Delegation

5. Possible Objectives of Decentralization Improve service delivery Strengthen local government Improve health and the environment

6. Context Decentralization of WS&S is not separate from the overall reform of the State Reform of the WS&S sector is underway throughout the region Different philosophies on sector reform exist within countries and among donors

7. Increased attention to water and environment issues Inadequate attention is being paid to effect of reform on the less advantaged populations – rural areas, small towns, and peri-urban areas. Increasingly municipalities are asked to assume responsibility for service delivery

8. Key Issues Cost recovery Cost effectiveness: economies of scale and scope Regulation Sector planning Environmental management Health promotion

9. Problem Small and medium size towns (5,000-30,000) have been largely neglected Infrastructure is inadequate and funds don’t exist to finance new investment or adequate O&M. Inadequate institutional structure to provide support to rural communities. Represents a significant percentage of the population.

10. Small towns and rural communities have fewer resources and less capability. Sanitation is almost completely neglected. Most countries lack an effective regulatory framework Central governments do not adequately involve key stakeholders in the discussion.

11. USAID Regional Activity Developed case studies around three themes: Management models for small town San Julian, El Salvador Itagua, Paraguay Marinilla, Colombia

12. Institutional arrangements for providing backup support to rural communities TOM Program, Honduras Municipal Promoter, Nicaragua Regulation of municipal services

13. Findings Overall Findings Reinforced key lessons learned over the past 20 years Importance of autonomy Role of legal and regulatory reform Role of external assistance in technical assistance and financing Sanitation lags behind water supply Health and environment largely secondary concerns

14. Specific Findings Management models for small towns Enlightened local leadership Importance of accountability Role of private sector Scale-up linked to sector reform and support for decentralization

15. Institutional arrangements for RWSS Cost of programmatic infrastructure Need for a clearly defined system Presence of a capable institution with clear responsibility Role of local government

16. Regulation No country surveyed provides a good example Proceed slowly Role of municipal regulation

17. Overall observations Decentralization is a slow process and not a panacea for all problems Success of decentralization is context and situation specific Key issue is who is involved and how decisions about decentralization are made

18. The Future Track experimentation that is going on Impact of paying more attention to sanitation Innovative solutions to lack of financing for capital investments Ways to address health and environment concerns