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Cost Benefit Analysis of Water Investments

February 9, 2015

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Investment in Water and Sanitation in Poor/Developing Countries:

A recent World Bank (WB) estimate showed that investing to provide drinking water to 750 million people in poor nations make clear sense with larger than expected health benefits. Senior Economist at WB’s Water and Sanitation Program (WASH) said “Provision of basic water and sanitation facilities would be a good investment in economic terms,” in the report.

Indian Context:

Prime Minister, Narendra Modi, addressed the nation by making basic toilets as a national priority on India’s 68th Independence Day (August 15, 2014). Mr. Modi highlighted that this would also yield strong returns, without even considering improved human dignity during his address.

Economics of water investments:

WB report states that the universal access to basic drinking water at home would cost $14 billion a year until 2030, and yield benefits of $52 billion, or about $4 for every dollar spent, according to the preliminary findings that will form part of a wider review.

New Findings:
The benefits were twice those estimated in a previous global study done in 2012. This is partly because of larger than expected falls in diarrheal disease (water born diseases), and lower costs of digging wells/boreholes. Overall, building toilets to eliminate defecation outside in rural areas would cost $13 billion a year to 2030 and give benefits of $84 billion, a return of $6 for every dollar spent. The benefits were slightly less than in a previous study.

I have written in several of my blog posts that the world’s costliest water is when women and girls in a household spend countless hours a year fetching water and doing no other activity. Open defecation also poses a threat to girls and women, in terms of abuse and getting attacked by animals in the wild.

What does this mean ultimately?
Investments in better water could mean 170,000 fewer deaths a year, while basic sanitation would cut 80,000 deaths, mostly from infectious diarrhea.

Urbanization and water:

In the past 25 years, more than two billion people of a world population now totaling about 7.3 billion have gained access to better water and almost two billion to sanitation. The study estimated only health benefits and time saved, such as from walking to a river to fetch water. They hide intangible impacts such as dignity, social status and security.

Water as Fundamental Human Right:

The United Nations in 2010 defined improved sanitation and water as fundamental human right.

Way forward:

In addition to the economics of water investments behavioral change, translated which means feeling pride in building a basis toilet at home and abandoning open defecation for good, would drive the movement in India. The country can also take lessons from neighboring Bangladesh.

 

This article is an adoption of the original articles that appeared on various websites. To read the original content, please visit the source websites by clicking the hyperlinks. Thoughts expressed are my own.

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