CAF holds the eighth edition of the Water Dialogues at the Casa América in Madrid

Sergio Díaz-Granados, President of CAF: "We must change the paradigm of the economic model of water"

PHOTO/CAF - The Executive President of the Development Bank of Latin America, CAF, Sergio Díaz-Granados, takes part in the eighth edition of the Water Dialogues

Water management is on the agenda of public administrations. Water resources are scarce, among other factors, as a result of climate change. Public authorities must act to reduce inequalities in access and consumption. That is one solution; the alternative is to transfer the supply to private hands. In Spain, for example, more than half of the water reserves already belong to the private sector, according to data from the Public Water Network (RAP) and the Spanish Association of Public Water Supply and Sanitation Operators (AEOPAS). 

On Tuesday afternoon, the Development Bank of Latin America, CAF, organised the eighth edition of the Water Dialogues under the title 'Circular economy in water management' precisely to debate this problem in Latin America. The aim of the discussion was to find effective ways to guarantee access and consumption for citizens. The Gabriela Mistral amphitheatre of the Casa América in Madrid, an emblematic space, hosted an event that coincided with the 30th anniversary of the centre's foundation.


CAF's Executive President, Sergio Díaz-Granados, delivered the opening remarks of the event by videoconference. "The effects of climate change are conditioning the availability of water. Floods and droughts generate considerable economic losses," warned the former Minister of Trade, Industry and Tourism in the Colombian government of Juan Manuel Santos, who insisted on seeking effective solutions. 

According to Díaz-Granados, Latin America and the Caribbean suffer from a "water paradox". The region holds a large part of the planet's reserves, but a large sector of society is experiencing what they call "water stress", that is, their demand for water exceeds the amount of available supply. Scarcity in the midst of plenty. Many do not have access to resources.


"We must change the paradigm of the economic model of water," said the CAF president. The proposal on the table is to replace the linear economy with the circular economy, a "more sustainable" model, according to Díaz-Granados. In the linear economy, water is discarded after use without taking into account the environmental footprint and its consequences; in the circular economy, the water consumed is treated to be reused. With this goal in mind, CAF hopes to "benefit our Latin America" and become the "greenest" investment bank in the region. 

The Secretary of State for the Economy and Business Support, Gonzalo García Andrés, took the baton and set out the lines of action that the Spanish Government is working on, but first he made it clear that "the need to act has increased exponentially" as a result of the effects of climate change, which, according to García Andrés, "are increasingly pronounced on water security".


This equation has also been influenced by the Russian invasion of Ukraine, which has led to "a situation of energy exceptionality". "It seemed easier to undertake the [energy] transition when prices were low, now we are going to spend a few years with high prices," García Andrés predicted. The war on European soil has also affected "input costs, which in turn affect food production". 

The needs of the administration are clear: knowledge, technological innovation and capital. "We also need regulation," the Secretary of State added. Future prosperity will depend on these factors. In this sense, Spain is "ready to act as a bridge between Latin America and Europe", and is working to "give impetus to the agenda between the EU, Latin America and the Caribbean" during the rotating presidency of the European Union, García Andrés said, which is scheduled for the last half of 2023.


CAF's corporate vice-president, Christian Asinelli, emphasised the points made by Díaz-Granados. " 35% of the population is under what we call water stress. We have a lot of water, but it is distributed inequitably in the region," he said. Therefore, we have a moral obligation to take care of this resource through "healthy consumption habits". 

The Water Dialogues were born in 2015 with the aim of finding solutions to a global problem. "Since then we have been evolving," said Asinelli, who recalled that all the editions held to date have been hosted by Casa América.


"We must reconcile the continent because of inequalities," said CAF's Manager of Urban Development, Water and Creative Economies, Ángel Cárdenas. "The intention is to change waste for resources; the linear economy for the circular economy. The short-term challenges are first to recover from the pandemic and then to mitigate the effects of climate change. "The climate crisis is, for us, a water crisis," he explained with data in hand. The frequency of floods has increased by 80% in the last 20 years and droughts are becoming more severe and prolonged. 

In the first panel discussion, Paraguay's Minister of Public Works and Communications, Rodolfo Segovia, highlighted the burden that COVID-19 has placed on the administrations: "The pandemic has hit part of the resources we had allocated for works and sanitation. As a result, we have also made investments to get out of this situation". "We have to work on the basis that water is a human right," he said.


Oriana Romano, head of the OECD Water Programme, explained the concept of the circular economy: "We are talking about an economic project, i.e. how to change an economic system. That is why it is so complex". 

The Secretary of State for International Cooperation, Pilar Cancela, closed the event by highlighting Spain's commitment to sanitation, water quality and wastewater treatment. Also in matters of collaboration with Latin America. In line with the Paraguayan minister, Cancela stressed that water is "a human right" and that this is the basis on which the actions of the institutions should fluctuate. For the Secretary of State, it is also important to work on the circular economy, which is above all "a political decision".

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