Bring trillions of dollars to developing country economies – report

Developing country economies would be boosted by trillions of dollars over the next two decades if clean water, toilets and hygiene were brought to everyone, reveals a new report out today from international aid agency WaterAid.  

This comes after the UK Government faced criticism for their plans to cut aid spending on lifesaving clean water, hygiene and sanitation programmes in developing countries by 80% earlier this year, even facing a rebellion from their own MPs.

Ensuring everyone everywhere has access to even basic water, hygiene and toilets – which could mean a well within a 15-minute walk, a household toilet and soap and water to wash hands with – would bring returns of up to 21 times their cost, found Vivid Economics, who conducted the research and analysis that feeds into the report.

Mission critical: invest in water, sanitation and hygiene for a healthy and green economic recovery – shows that reaching the levels of access defined by the UN’s Sustainable Development Goals could unlock huge sums:

  • Ensuring everyone has a toilet where waste is safely managed can yield US$86 billion per year in greater productivity and reduced health costs amongst other benefits.
  • Ensuring everyone has somewhere to wash their hands with soap and water can yield $US45 billion per year.
  • Ensuring everyone has a tap at home can yield $US37billion per year.

This report is being published just days before G20 Finance Ministers and Central Bank Governors meet in Venice to discuss ensuring global economic prosperity in the wake of the pandemic and in the face of climate change. WaterAid is calling on G20 Finance Ministers to ensure WASH is central to plans for developing countries to recover economically from the pandemic and protect themselves against the impacts of climate change. 

Investment in WASH within healthcare centres, for example, was highlighted by the G20 as an essential measure for protecting the world’s poorest health systems in a declaration in May. This requires an investment of $6.5 billion – which finance ministers could discuss providing this week.  

They are also set to discuss debt relief and the issue of IMF funding in the form of Special Drawing Rights (back-up funds) for the world’s poorest countries – whose economies have been impacted disastrously by the pandemic – which could enable spending on essential and economically critical public services like WASH.

WaterAid’s report also shows that investing in WASH is crucial for building climate resilience; a key priority for the G20 and COP26 set to take place in Glasgow in November.

Tim Wainwright, Chief Executive, WaterAid, said:

 “Our report demonstrates just how important it is that the UK Government reverse the cuts to aid spending on water and sanitation. It confirms, unquestionably, that investment in water, sanitation and hygiene is an extremely cost-effective defence against the twin threats of Covid-19 and the impacts of climate change.

“Water and sanitation have been sidelined for far too long, their value overlooked, trapping millions in poverty. Our research shows that it’s an extremely cost-effective investment. Ensuring everyone everywhere has access to even basic water, hygiene and toilets would bring returns of up to 21 times the cost.

If the Government and its G20 counterparts are intent on building a strong, sustained recovery, then investing in water and sanitation is, without a doubt, one of the best buys they could make.”

At current rates of progress, Sustainable Development Goal (SDG) 6 - achieving universal access to safe water and sanitation - will not be met until decades after the deadline of 2030. In some countries the proportion of the population with access, in particular to basic sanitation, is actually regressing. In least developed countries, progress needs to ramp up to between 10 and 23 times its current rate to meet the SDGs and other health equity goals.  WaterAid believes that one of the reasons why progress is not on track is that the economic value of achieving universal access to vital WASH services is not always fully appreciated by governments, business and donors, resulting in chronic underinvestment.  

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