Microfinance Focus, August 26, 2011: A series of reports by the World Bank’s Water and Sanitation Program highlights that households that invest in basic sanitation have a better standard of living and thus could increase up to seven fold the return on investment in economic benefits in East Asia.

The reports are a follow up to the Economics of Sanitation Initiative (ESI) launched in East Asian countries in 2007. The new reports contain a case study analysis on the costs and benefits of investing in basic improvements in sanitation in Indonesia, Cambodia, China (Yunnan Province), Philippines and Vietnam.

“The first phase of ESI demonstrated for the first time the huge economic toll of poor sanitation, up to seven percent of GDP in some countries,” said Almud Weitz, WSP Senior Regional Team Leader for East Asia.  “The findings from phase two give countries, more specifically sanitation decision-makers, improved evidence on the costs and benefits of alternative sanitation options in different contexts.”

First, the reports recommend that countries should improve sanitation for the entire population by developing viable sanitation markets, collective social behavior change and through the dissemination of information on household sanitation options and models.

Second, the reports advise decision-makers to go beyond basic sanitation where necessary, in circumstances where pit latrines are not feasible and where populations demand higher levels of sanitation. However, one must bare in mind the costs of investing in expensive technologies.

Lastly, the reports stress the promotion of evidence-based sanitation decision-making. Due to the differences in economic performance in various sites, decisions should take into consideration site conditions and local demand and preferences. Only then can the most appropriate sanitation option and delivery approach to be taken.

Despite economic growth in East Asian countries, access to basic sanitation seems to be a concern. For example, 60 million people in Indonesia still defecate in the open.

The Water and Sanitation Program (WSP) is a multi-donor partnership created in 1978 and administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. The World Bank Group is the largest external financier (US$7.5 billion in fiscal year 2011) in water supply and sanitation, irrigation and drainage, water resources management, and other water-related sectors, and provides strong advisory and analytical support to client countries.