United Nations ESCAP ENVIRONMENTALLY SUSTAINABLE ECONOMIC GROWTH FOR THE WELLBEING OF ALL Challenges and Prospects in Financing Access to Water and Sanitation

United Nations ESCAP

ENVIRONMENTALLY SUSTAINABLE ECONOMIC GROWTH FOR THE WELLBEING OF ALL

Challenges and Prospects in Financing Access to Water and Sanitation in the Asia-

Pacific Region Ti Le-HuuTi Le-HuuSustainable Development and Water Sustainable Development and Water

Resources SectionResources SectionUNESCAPUNESCAP



Main Main sources of sources of reference:reference:1. Asia Water 1. Asia Water WatchWatch

2. WHO/UNICEF 2. WHO/UNICEF JMPJMP

3. World Bank 3. World Bank WSPWSP

4. EASAN4. EASAN



Points of Points of DiscussionDiscussionCoverage of water supply & Coverage of water supply &

sanitation in Asia and the Pacificsanitation in Asia and the PacificInvestment to meet MDGs in water Investment to meet MDGs in water

supply and sanitationsupply and sanitationTrends and challenges in water Trends and challenges in water

supply and sanitationsupply and sanitationInvestment in water infrastructureInvestment in water infrastructureEmerging opportunitiesEmerging opportunities



Source: Seetharam, ADB, 2005











Water: Urban Water: Urban and rural and rural

disparities disparities 2004: 84% 2004: 84%

without access without access live in rural live in rural

areas areas

Source: WHO/UNICEF Source: WHO/UNICEF JMP, 2006JMP, 2006



The world is The world is not on track to not on track to meet the MDG meet the MDG

sanitation sanitation targettarget

Progress for Children: A report card on water and sanitation, Progress for Children: A report card on water and sanitation, UNICEF, 2006; UNICEF, 2006; Data: WHO/UNICEF JMP, 2006Data: WHO/UNICEF JMP, 2006



Infrastructure for Water-related Services:Infrastructure for Water-related Services:Population Coverage with Water Supply and Population Coverage with Water Supply and Sanitation in Asia and the Pacific as of 2002Sanitation in Asia and the Pacific as of 2002

Water supplyWater supply

Served populationServed population Unserved populationUnserved population

mln.mln. %% mln.mln. %%

3,1473,147 8282 691691 1818

SanitationSanitation

Served populationServed population Unserved populationUnserved population

mln.mln. %% mln.mln. %%

1,8811,881 4949 1,9571,957 5151

Source: WHO and UNICEF Global Water Supply and Sanitation Assessment





The estimated annual water and The estimated annual water and sanitation expenditure need is US$12 sanitation expenditure need is US$12

billion in the regionbillion in the region

Water

Sanitation &

Wastewater

East Asia and the Pacific 0.10% 0.34% 0.20% 0.64%

Europe and Central Asia 0.05% 0.18% 0.07% 0.30%

Latin America and the Carribean 0.05% 0.14% 0.03% 0.23%

Middle East and North Africa 0.08% 0.19% 0.18% 0.45%

South Asia 0.16% 0.34% 0.87% 1.36%

Sub-Saharan Africa 0.25% 0.44% 0.93% 1.63%

Developing Regions 0.09% 0.26% 0.25% 0.61%

Annual Investment Needs (2006-2010) as percent of GDP

Rural Water

and

Sanitation

Urban

TotalRegion

Source: J. Saghir, World Bank, EASAN, 2007Source: J. Saghir, World Bank, EASAN, 2007



Why is the sector under invested?Why is the sector under invested?

Low overall spending in Asia (1990-2000 Low overall spending in Asia (1990-2000 annual)annual)– 3.6% of investment for W&S3.6% of investment for W&S– Water: Water: US$ 6 billionUS$ 6 billion (rural/urban 50/50)(rural/urban 50/50)– Sanitation: Sanitation: US$1.1 billionUS$1.1 billion (rural/urban (rural/urban

10/90)10/90)

Local governments need strong Local governments need strong direction from national leadersdirection from national leadersSpending has lifted only marginally Spending has lifted only marginally since thensince then




Public Expenditure Reviews: IndonesiaPublic Expenditure Reviews: IndonesiaSector financing is still limited: from 0.40% of Sector financing is still limited: from 0.40% of GDP in 1998 to 0.64% of GDP in 2002GDP in 1998 to 0.64% of GDP in 2002Local governments are now primary funders Local governments are now primary funders of WSS, but sector allocations appear of WSS, but sector allocations appear unrelated to GRDP and ‘ad hoc’unrelated to GRDP and ‘ad hoc’90% of investment is for capital investment, 90% of investment is for capital investment, little to nothing for ‘software’: maintenance, little to nothing for ‘software’: maintenance, capacity building, TA, sanitation and hygiene capacity building, TA, sanitation and hygiene educationeducationToo many budget holders involved, no Too many budget holders involved, no coherent data collection, analysis, and coherent data collection, analysis, and reporting on sector financing and reporting on sector financing and performanceperformance

Source: Almud Weitz, WSP, the World BankSource: Almud Weitz, WSP, the World Bank



International Private Investment in International Private Investment in Infrastructure Infrastructure (1990-2002)(1990-2002)US$ billion (estimation by the World Bank)US$ billion (estimation by the World Bank)



WB-supported Sector WB-supported Sector Investments in East Investments in East Asia (FY95 - FY07)Asia (FY95 - FY07)

Sewerage72%

General 8%

Sanitation 20%

Sewerage vs. basic sanitation

Water supply vs. sanitation

Recognize that limited Recognize that limited resources will have to cover resources will have to cover both basic access to sanitation both basic access to sanitation and environmental protectionand environmental protectionCountries will continue to Countries will continue to balance brown and green balance brown and green objectivesobjectives

Water SupplySanitation (inc. wastewater)

Investments may have different Investments may have different objectivesobjectives



5-year moving average for WB-supported sector investments

Sanitation

Sewerage



Importance of universal sanitationImportance of universal sanitation

Per capita impacts Per capita impacts in 4 countries range in 4 countries range from US$10 to over from US$10 to over US$30 (~ 2% GDP)US$30 (~ 2% GDP)

Similar impacts are Similar impacts are expected in other expected in other countriescountries

0

5

10

15

20

25

30

35

Cambodia Indonesia Philippines Vietnam

Econ

omic

loss

es (U

S$ p

er c

apita

)

Tourism

Other welfare

Environment

Water

Health




Tourism is a high value and fast growing Tourism is a high value and fast growing economic sector for revenues and foreign economic sector for revenues and foreign exchange in the regionexchange in the regionTourism revenues can be put at risk by poor Tourism revenues can be put at risk by poor sanitation as high value tourists will not come sanitation as high value tourists will not come …if the drains lead to their beach …if the drains lead to their beach

Tourists are sensitive to their environment




of US$9 billion loss/year >70% can be of US$9 billion loss/year >70% can be averted (US$6.6 billion)averted (US$6.6 billion)

Investing in sanitation results in huge benefits

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Cambodia Indonesia Philippines Vietnam

Ec

on

om

ic l

os

se

s a

nd

ga

ins

(US

$ m

illi

on

) Losses

Gains

Water and Sanitation Program (2007). Economic impacts of sanitation in Southeast Asia. World Bank.



0

1000

2000

3000

1940 1955 1970 1985 2000 2015 2030

Years

Wa

ter

use

, km

3/y

ea

r

Water w ithdraw al Water consumption СS SDS

Assessment

Forecast

Dynamics of water withdrawal and water Dynamics of water withdrawal and water consumption in Asia during 20consumption in Asia during 20thth century and century and

water use forecast by two scenarios water use forecast by two scenarios

Source: Shiklomanov A.I., : Shiklomanov A.I., Strategic Planning Concluding Workshop, UNESCAP, 2004, UNESCAP, 2004



Infrastructure for Water Resources Infrastructure for Water Resources Development and Management:Development and Management:

Large Dams and ReservoirsLarge Dams and Reservoirs

WorldWorld Asia and the PacificAsia and the Pacific

Number of damsNumber of dams

55,00055,000 35,00035,000China: 26,000, India: 4,500, Japan: 2,800China: 26,000, India: 4,500, Japan: 2,800

Total storage capacity, created by damsTotal storage capacity, created by dams

6,120 billion m6,120 billion m33 1,350 billion m1,350 billion m33

Per capita storage capacityPer capita storage capacity

960 m960 m33 360 m360 m33

Australia: 5,000 mAustralia: 5,000 m33, Afghanistan: 140 m, Afghanistan: 140 m33



Need for Accelerated Water Need for Accelerated Water Infrastructure DevelopmentInfrastructure Development due todue to

Insufficient water storage capacityInsufficient water storage capacity- expected deficit of a few hundred billion m- expected deficit of a few hundred billion m3 3 of water of water

storage as demand for water will be growingstorage as demand for water will be growing

- no reservoirs on many international rivers- no reservoirs on many international rivers

Shortage of infrastructure for drinking water Shortage of infrastructure for drinking water

supply and sanitation to meet respective MDGssupply and sanitation to meet respective MDGs i.e. to reduce by half the proportion of people without i.e. to reduce by half the proportion of people without safe water and basic sanitation by 2015safe water and basic sanitation by 2015

Grossly underdeveloped infrastructure for Grossly underdeveloped infrastructure for sewage and wastewater treatmentsewage and wastewater treatment



Trends in domestic withdrawal

Bangladesh

India

Japan

Kazakhstan Malaysia

Pakistan

Philippines

Republic of Korea

Russian Federation

Sri Lanka

Thailand

Turkmenistan

Uzbekistan

0

20

40

60

80

100

120

140

160

1973-1977 1978-1982 1983-1987 1988-1992 1993-1997 1998-2002

m3

pe

r c

ap

ita

pe

r y

ea

r

Bangladesh China Fiji India

Indonesia Japan Kazakhstan Kyrgyzstan

Malaysia Pakistan Philippines Republic of Korea

Russian Federation Sri Lanka Tajikistan Thailand

Turkmenistan Uzbekistan Viet Nam



Trends in water supply production Trends in water supply production in selected members of ESCAPin selected members of ESCAP

0.500

0.550

0.600

0.650

0.700

0.750

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Hong Kong: Urban and Rural Republic of Korea: Urban and Rural

Singapore: Urban

Production capacity of urban and rural waterworks per person(cubic metres per day)

0.500

0.550

0.600

0.650

0.700

0.750

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Hong Kong: Urban and Rural Republic of Korea: Urban and Rural

Singapore: Urban

Production capacity of urban and rural waterworks per person(cubic metres/day)



Water supply production and Water supply production and investment in Singaporeinvestment in Singapore

0.500

0.520

0.540

0.560

0.580

0.600

0.620

0.640

0.660

1994 1995 1996 1997 1998 1999 2000

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Urban production capacity per person (cubic metres per day)

Public capital expenditures for urban water supply (million US dollars)



Water supply production and Water supply production and investment in Hong Kong, Chinainvestment in Hong Kong, China

0

1000

2000

3000

4000

5000

6000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

0

50

100

150

200

250

300

350

400

450

500

Total production capacity of urban and rural waterworks (thousand cubic metres per day)

Public capital expenditures for urban and rural water supply (million US dollars)



Indicative Annual Investment in Water Indicative Annual Investment in Water Infrastructure for Developing CountriesInfrastructure for Developing Countries

Annual costs (billions of US$) Infrastructure for Appr.2000 2002-2025

Drinking water 13 13+ Sanitation and hygiene 1 17 Municipal wastewater treatment

14 70

Industrial effluent 7 30 Agriculture (mostly irrigation) 32.5 40 Environmental protection 7.5 10

Global total 75 180 Estimated total infrastructure investment requirement for Asia and the Pacific*

99

*Estimation by UNESCAP Source: Report of the World Panel on Financing Water Infrastructure, 2003



Latest Latest developmentsdevelopmentsFirst Asia-Pacific Water Summit on First Asia-Pacific Water Summit on

Water Security: Leadership and Water Security: Leadership and Commitment to achieve MDG target 10Commitment to achieve MDG target 10ADB commits to increase investment ADB commits to increase investment an additional amount of US$ 2 billion an additional amount of US$ 2 billion annually in water sectorannually in water sectorMinisterial Conferences for South Asia Ministerial Conferences for South Asia (SACOSAN) and East Asia (EASAN) on (SACOSAN) and East Asia (EASAN) on Sanitation every two yearsSanitation every two yearsCountries to commit to IYS-2008Countries to commit to IYS-2008




Thank youThank youfor more information on SPMfor more information on SPM

www.unescap.org/esd/water/www.unescap.org/esd/water/(UNESCAP website)(UNESCAP website)

www.spm-water-ap.netwww.spm-water-ap.net(FAO-UNESCAP website)(FAO-UNESCAP website)

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United Nations ESCAP ENVIRONMENTALLY SUSTAINABLE ECONOMIC GROWTH FOR THE WELLBEING OF ALL Challenges and Prospects in Financing Access to Water and Sanitation