Wednesday, May 23, 2012

The Cost of Inadequate Sanitation

In Pakistan, the government is primarily responsible for the provision of sanitation services and clean water. Yet, increasingly, inadequate and poor sanitation services for the urban poor have encouraged the private and NGO sectors to design and implement community-led and self-financed projects. While these efforts are commendable, they fall short of total need even when combined with government efforts. For a long time now, policymakers, government officials and implementing organizations have viewed the lack of sanitation or clean water as an inconvenience to the poor, something they bear in addition to other poverty-related challenges. With ever-increasing populations in cities and the post-2010 flooding health crisis, Pakistan’s citizens and policymakers are now realizing the real impact of not having access to adequate sanitation and clean water.

On April 12, 2012, the Water and Sanitation Program (WSP) released a new report, “The Economic Impacts of Inadequate Sanitation in Pakistan,” as part of WSP’s Economics of Sanitation Initiative (ESI). The WSP-ESI report concludes that poor sanitation results in heavy economic losses for Pakistan. Providing further perspective, World Bank Country Director Rachid Benmessaoud has pointed out that “the total amount of the losses caused by poor sanitation in the country is seven times higher than the national health budget and 3.5 times higher than the education budget.”

 Key Study Findings

The total economic cost of poor sanitation is estimated to be PKR343.7bn (US$5.7bn), which is approximately 3.9% of Pakistan’s GDP. The cost of premature mortality – valued at PKR216.29bn (US$3.56bn) and equivalent to approximately 2.5% of GDP – formed a major component of total health costs. The cost of treatment is estimated at approximately 12.5% of total health-related costs. Of this total, 50% is accounted for by treatment of diarrhea, which is 6% of total health-related costs. Total productivity losses resulting from patients’ inability to work amounted to approximately 12% of total health costs.

Water-related costs are estimated at PKR15.98bn (US$262.68m) and equivalent to 0.18% of Pakistan’s GDP. Welfare losses, such as user preferences including comfort and acceptability, privacy, convenience, security, avoidance of conflict, status and prestige and time loss, were more difficult to quantify. These losses amounted to PKR22.77bn (US$374.4m) – over 6.5% of total impact and 0.26% of GDP. Time lost due to search and access to open defecation sites was a major component of welfare costs, followed by the costs associated with time lost in household access to shared toilets.

Assessing the gains, the WSP study findings indicate that sanitation and hygiene-related interventions could mitigate 52% of estimated economic impacts, equivalent to PKR1,125 (~US$13) per capita and 2% of GDP. Access to improved toilets alone could save up to 36% of total costs and nearly 1.5% of GDP. Educating the poor, resulting in improved hygiene behavior such as hand washing, could bring down the total economic impact by 46%. Similarly, improved access to quality water and safe confinement and disposal of fecal matter could mitigate nearly a third of total economic losses.

Improving Sanitation and Water Quality in Pakistan

The WSP-ESI report found that while 50% of Pakistan was covered for sewage collection, only 10% of sewage was being effectively treated. Sewage treatment plants exist in only a few cities. Of these, only a few actually work. Around one-third of the total population, or 50 million people, defecates in the open, and an additional 5%, or eight million people, have access to shared toilets. While these figures seem appalling, open defecation is a huge challenge in other South Asian countries like neighboring India, which has the highest rate of open defecation globally and where nearly 50% of the population has no access to toilets.

On March 22, 2012, the eve of World Water Day, a UNICEF update on water and sanitation in Pakistan further highlights the depth of Pakistan’s water and sanitation issue by noting the high incidence of diarrhea due to unsafe drinking water. The Pakistan Medical Association’s annual health report for 2011 states that one child dies every minute from diseases that are preventable by immunization, diarrhea and respiratory infections. The situation was exacerbated in the aftermath of the 2010 floods, for which UNICEF provided emergency assistance, including provision of safe water, water purification tablets and jerry cans.

Pakistan’s Water and Sanitation Agency (WASA) is facing criticism from affluent and poor customers alike for its inability to meet the country’s water needs. WASA cites the increasing costs of system maintenance and the poor payment history of individual and commercial users as key reasons why it is unable to efficiently deliver water. The agency plans to launch consumer surveys to determine illegal connections and is working on a business plan to find ways to boost its decreasing revenues. It is also drawing up plans to clean up wastewater drainage outlets in Lahore: currently, untreated wastewater is emptied into the Ravi River.

Provision of services is one part of the equation. Educating users of the importance of clean water and sanitation is the other part. Hygiene education is not provided widely in Pakistan and is not a critical part of the government curriculum in schools. Individuals and organizations in Pakistan, however, are working to correct this situation.  For example, Seema Zahid, a high school teacher in Gulshan-e-Iqbal and a town education officer, has organized walks with school children from two schools located in low-income areas of Karachi as part of the World Walks for Water and Sanitation campaign. Another initiative headed by Unilever – the Lifebuoy Hygiene Awareness Programmes – works with NGOs in Pakistan to teach children the importance of hand washing. These efforts have been successful in creating buzz around hygiene. It will take longer, though, to bring about a change in habits – especially when access to facilities is a challenge.

Understanding the Costs of Full Sanitation Services

A 2011 IRC study on sanitation financing models for the urban poor states that, “the absence of implementing a full sanitation service chain severely affects poor people,” and that, “poor families in urban areas already pay the price for unsafe and ill-conceived disposal of their excreta; albeit in forms other than money.” The study cites the same issues that the WSP-ESI report accounts for, particularly the welfare costs related to user preference, such as time and energy diverted from other productive tasks to find places with enough privacy to relieve themselves.

The study also makes a critical point about the role of gender in adequate sanitation. Women lose out on employment opportunities because they spend productive time searching for clean water or privacy. School dropout rates are high among girls who have attained puberty due to lack of poor sanitation facilities at government schools. Women and adolescent girls also run a high risk of developing kidney stones because they are actively lowering their fluid intake to reduce their visits to the toilet.

Poor people living in low-lying areas are very vulnerable to disease due to constant exposure to runoff and floodwater contaminated by human excreta and sludge flowing from higher ground. Leakages from toilet soak pits and septic tanks also tend to pollute sources of shallow groundwater.

Financing the full life-cycle costs of sanitation should go beyond installing toilets. The IRC study notes that interventions and program budgets must account for investments in creating demand for toilets, providing information and marketing services, ensuring financing mechanisms for production and maintenance of sanitation services, and providing support for efficient operations, use and waste disposal. It would appear, then, that only such a life-cycle approach would ensure better sanitation and health for the poor and ultra-poor in cities that is sustainable in the long-term.


Globally, the costs of urban water and sanitation are borne by governments and households. A mere 5% of all Official Development Assistance (ODA) goes to the water sector with sanitation often remaining unaddressed. Studies that assess national economic and social losses on account of poor sanitation services, such as that done by WSP-ESI, are critical to building advocacy and directing the flow of funds towards improved sanitation models.

Information is often a primary hurdle. International foundations and NGOs, as well as private sector enterprises, are working in the sanitation and clean water space to bridge the gap, but their efforts are not well reported or documented. A cohesive study could indicate ways in which these piecemeal and often disparate efforts could work together for stronger impact.

Financing for this sector comes from grants and user fees in the pay-per-use models. Funds from these sources tend to be inadequate for the big push the issue requires. Furthermore, disposal of waste is one piece of the sanitation chain private sector players struggle to put together. Public-private partnerships at this juncture could enable private operators to deliver better and more sustainable services.

Access to sanitation has implications beyond economic costs and benefits or even good health and a longer life. For the urban poor forced to defecate in the open, it is about dignity, self-respect and personal safety. The WSP-ESI report is hard-hitting as it puts an economic cost to poor sanitation at the national level. If it is successful in directing investment towards better sanitation for the urban poor, the value of its impact would be immeasurable.

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