presence of considerable poverty. Third, past neglect of water service infrastructure may lead to high water charges to recoup rehabilitation costs, putting a significant burden on a particular generation even if the country income distribution is relatively flat and the numbers living in poverty are relatively few. Table 2.1 brings together the most recent available consistent indicators of relative poverty for 21 OECD countries and some judgements about ater plenty�and ast infrastructure neglect� The 21 countries �all outside the area labelled nknown�in Figure 2.1 �are here divided into two groups, according to whether measures and structures are in place. The relative poverty indicators date from the mid-1990s (1992-97), and it is assumed that they have not changed significantly since. The results are striking. In the lower half of the table, only Canada shows indicators of the population proportion in relative poverty that are above the 21-country average. That country is known to have abundant supplies of relatively unpolluted water, and, due to significant subsidies for infrastructure investments, water prices in the mid-1990s were determined to be the second lowest in the OECD (OECD, 1999b; Table 13). So it can be surmised that the sheer cheapness of water (even after allowing for the probably considerable hidden subsidies), combined with supplementary welfare payments that cover water bills, has vercome�the relatively large size of the population proportion in relative poverty, thereby explaining the perception of o affordability problem� For all other countries without measures or structures, the proportions in poverty were less than the 21-country average; three revealed a higher than average intensity of poverty, but umbers living in poverty�is generally the indicator that is publicised, and is most appropriate for use here. In the upper half of Table 2.1, of the 12 countries listed as having water affordability measures and structures directly applied to water bills, nine had at least two poverty indicators of the four with values higher than the 21-country average. Japan and Belgium, however, had just one indicator in the higher-than-average category. In both cases, it is the less-used income-gap ratio. And while Japan is in the group claiming no significant affordability problems, Belgium is firmly in the other camp, according to a written submission from the Flemish Environment Agency). None of the French indicators were higher than the 21-country average. Non-poverty factors play a role here as well, with the US relatively cheap water, high average standard of living and array of locally based affordability measures (see Chapter 3) seemingly outweighing the effects of the high numbers in relative poverty. In Hungary, an opposite effect appears to have occurred. Here, despite relatively low values of the poverty indicators, and still-sizable central government subsidies for water services, the dominant factor is the large real price increases for redressing past infrastructure neglect. This fairly rough and ready analysis, combined with the possible differences in effectiveness of affordability measures and structures directed at water bills of vulnerable households in various countries, permits construction of some feasible33
