Water and Sanitation in South Asia in the Context of the Millennium Development Goals

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Mukul Kulshrestha and Atul K. Mittal (Accepted) Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr Abstract South Asia region holds the key to the fulfillment of Millennium Development Goals related to water and sanitation. Any effort towards achieving the 2015 targets would require investments in the sector that cannot be generated internally by the countries of the region. The authors demonstrate that such efforts will invariably require at least a 10-fold international inflow of investments to the region, besides the massive domestic investments and adoption of sector efficiency measures. The paper identifies and discusses a plethora of problems that the sector faces in the South Asia region and links the problems to two root causes: inappropriate tariff structures and to the poor governance. The paper also discusses the issue of prevalence of corruption in the water and sanitation sector in the South Asia and concludes that the sector needs wide reforms with a strong political commitment to take on the challenge of the year-2015 development targets. Keywords: South Asia, Millennium Development Goals, water and sanitation, international inflow of investments, inappropriate tariff structures, poor governance Introduction The question of universal provisioning of Water Supply and Sanitation services has assumed significant importance in the recent times and has been subject to sharp international focus. The Johannesburg World Summit on Sustainable Development (WSSD) announced a wide range of commitments to water related human rights and governance as part of the recognition that water and sanitation were inextricably linked to the eradication of poverty and to the achievement of sustainable development; and the United Nations General Assembly (UN(a), 2000) proclaimed the year 2003 as the International Year of Freshwater. The UN also recommended the proclamation of 2005-2015 as the “International Decade on Water for Life” (UN(b) 2000). Earlier in September 2000, at the United Nations Millennium Summit, world leaders had also agreed to a set of time- Water And Sanitation In South Asia In The Context Of Millennium Development Goals Mukul Kulshrestha* and Atul K. Mittal** * Research Scholar, Department of Civil Engineering, Indian Institute of Technology, Delhi, INDIA – 110 016 & Faculty Member, Department of Civil Engineering, MANIT, Bhopal, INDIA-462007 (e-mail: [email protected]) ** Assistant Professor, Department of Civil Engineering, Indian Institute of Technology, Delhi, INDIA– 110016 (e-mail: [email protected])

Transcript of Water and Sanitation in South Asia in the Context of the Millennium Development Goals

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Abstract South Asia region holds the key to the fulfillment of Millennium Development Goals related to water and sanitation. Any effort towards achieving the 2015 targets would require investments in the sector that cannot be generated internally by the countries of the region. The authors demonstrate that such efforts will invariably require at least a 10-fold international inflow of investments to the region, besides the massive domestic investments and adoption of sector efficiency measures. The paper identifies and discusses a plethora of problems that the sector faces in the South Asia region and links the problems to two root causes: inappropriate tariff structures and to the poor governance. The paper also discusses the issue of prevalence of corruption in the water and sanitation sector in the South Asia and concludes that the sector needs wide reforms with a strong political commitment to take on the challenge of the year-2015 development targets. Keywords: South Asia, Millennium Development Goals, water and sanitation, international inflow of investments, inappropriate tariff structures, poor governance Introduction The question of universal provisioning of Water Supply and Sanitation services has assumed significant importance in the recent times and has been subject to sharp international focus. The Johannesburg World Summit on Sustainable Development (WSSD) announced a wide range of commitments to water related human rights and governance as part of the recognition that water and sanitation were inextricably linked to the eradication of poverty and to the achievement of sustainable development; and the United Nations General Assembly (UN(a), 2000) proclaimed the year 2003 as the International Year of Freshwater. The UN also recommended the proclamation of 2005-2015 as the “International Decade on Water for Life” (UN(b) 2000). Earlier in September 2000, at the United Nations Millennium Summit, world leaders had also agreed to a set of time-

Water And Sanitation In South Asia In The Context Of Millennium Development Goals

Mukul Kulshrestha* and Atul K. Mittal**

* Research Scholar, Department of Civil Engineering, Indian Institute of Technology, Delhi, INDIA – 110 016 & Faculty Member, Department of Civil Engineering, MANIT, Bhopal, INDIA-462007 (e-mail: [email protected]) ** Assistant Professor, Department of Civil Engineering, Indian Institute of Technology, Delhi, INDIA–110016 (e-mail: [email protected])

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

bound and measurable programme envisaging goals and targets for combating poverty, hunger, disease, illiteracy, environmental degradation and discrimination against women. Placed at the “heart of the global agenda”, these goals are now called the “Millennium Development Goals” (MDGs) (Table 1). These MDGs critically highlight the link among improved water supply, safe sanitation, better hygiene, and poverty reduction. With the strong international political willingness and commitment at backing the initiative, the MDGs represent a “once-in-a-generation opportunity” to make significant progress in the sector. In 2002, the WSSD reiterated the Millennium Development Goal to halve, by the year 2015, the proportion of people who are unable to reach or to afford safe drinking water. Importantly, the Millennium Target itself was modified during the WSSD through the addition of a specific reference to basic sanitation and a new target on halving the proportion of people who do not have access to basic sanitation by 2015—not part of the Millennium goals—was also set. This set the agenda for the world to tackle the water sector in a comprehensive manner by highlighting the need to integrate sanitation in Integrated Water Resources Management.

Water and sanitation are specifically implanted in Goal 7 of the MDGs which aims to "Ensure Environmental Sustainability," in the form of Targets 10 and 11:

• Target 10: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and hygienic sanitation; the corresponding Indicator being the proportion of the population with sustainable access to an improved water source

• Target 11: By 2020 to have achieved a significant improvement in the lives of at least 100 million slum dwellers; the corresponding Indicator being the proportion of people with access to improved sanitation. This target was amended at the WSSD to halving, by 2015, the proportion of people who do not have access to basic sanitation.

To be more precise, advances in water supply and sanitation also contribute greatly to other targets as water is intrinsically interconnected with all the eight MDGs although particularly strong links exist with poverty, hunger, gender equality, environmental sustainability and health (Table 1). In fact, Kulshrestha and Mittal (2003) evolved a model to estimate that by the year 2015, 54-80 million deaths would occur globally due to inadequate water and sanitation services, and even if the MDGs are in place (and their implementation is successful), an estimated 40-58 million people are still poised to die. Therefore, the implications of MDGs are significant, and more so for the South Asia region constituting India, Pakistan, Nepal, Bhutan, Bangladesh, Srilanka and Maldives, as outlined in the following section. This paper further examines the economics of achieving Water and Sanitation (W&S) MDGs in South Asia, and traces the problems arising in the region to the poor governance of utilities and inappropriate tariff structures. South Asia: Key to Realizing MDGs “South Asia holds the ”swing vote” whether the Millennium Development Goals can be reached by 2015…. South Asia has 40 percent of the problem, which it means it has 40 percent of the solution… South Asia has a special place partly because of its sheer size; it is the place where 40 percent of the population lives on less than a dollar a day, and where 35 percent of children do not get proper primary education…So this region is most going to drive whether we reach the targets or not”: UNDP Administrator Mark Malloch Brown (IPS, 2003)

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

The JMP, 2000 report showed that, for both water supply and sanitation, Asia and Africa are the two regions where lack of access is highest. By the end of the century, a total of about 1.1 billion people lacked access to improved water supply. Asia and Africa alone accounted for 86 percent of these (61 percent lived in Asia and 25 percent in Africa). The report also showed that about 2.4 billion people in the world lacked access to improved sanitation and Asia alone accounted for 79 percent of them. Estimates for Asia in 2000 (WEHAB 2002) show that sanitation coverage is by far the lowest of any world region, with 54 per cent still lacking sanitary facilities. Easy access to a safe water supply is the second lowest, after Africa, with 20 per cent yet to be served. Disparities in sanitation coverage vary even more: 69 per cent of the rural population lacks sanitation coverage compared with 26 per cent in urban areas. The same is true for safe water coverage: 27 per cent of the rural population without safe access compared with 7 per cent in urban areas. The South Asia region is home to more than 200 million people lacking access to safe drinking water and 800 million without proper sanitation service (Davis, 2004); faces some of the lowest per-capita freshwater availability in the world; and also includes several countries ranked in the lower quartile of Transparency International’s Corruption Index (2003). Nearly 40 % of the world’s poor are located in this region that comprises weak social indicators ( Ahmed and Bery, 2004), so that performance in South Asia will be critical to achieving the MDGs. Figure 1 and Figure 2 clearly show that South Asia is one of the regions that require immediate attention and redressal if the global targets of halving the numbers of people without access to water and sanitation are to be achieved by 2015. The Economics Of Achieving Water and Sanitation MDGs In South Asia Water and sanitation costing is probably the most difficult of the goals to estimate due to uncertainties associated with the proportion of the cost that can and should be borne by international aid and private investment, the types of services provided and the degree of efficiency gain that can be extracted from existing allocations. In the 1990s total funding to water and sanitation from all sources has been around US$30 billion per year (WEHAB2002: 16). Since the level of funding has achieved new services at approximately half the rate needed to reach the MDGs , to achieve the MDGs overall funding will need to doubled (Annamraju et al. 2001:7; JMP 2000:31 ; Report of the world panel on Financing Water Infrastructure 2003 :53) and would require another US$30 billion. These requirements of roughly US$30 billion per year have also been confirmed by the UN estimates that total water and sanitation expenditure from all sources will need to be increased by around US$30 billion per year to reach the MDGs (WEHAB 2002: 20). Almost the whole of this additional requirement will be in the developing countries to offset coverage for the population increase and to cover the existing deprived populations. Given this annual US$30 billion additional funding need, how much should come as international inflow? Annamraju et al. 2001 have analyzed the investments in water supply and sanitation for all developing countries (Table 2). It is evident that the domestic investments in the W&S sector comprise $ 19-24 billion in a total investment of $ 26-32 billion i.e., an average domestic

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

investment of $ 21.5 billion in an average total investment of $ 29 billion, thus forming 74% of the total investments. Assuming that the developing countries are able to meet this level of additional investments required in the water and sanitation sector (and this may not be easy considering that the developing countries have to meet several other MDGs and have little chance of investing additional funds in the sector), they would be able to contribute 74% of $30b requirement, i.e., $ 22.2 billion. To cover the target of $30 billion, the international flow must contribute minimally $7.8 billion per annum. As current aid funding to water and sanitation is around US$3.1 -3.5 billion per year (Report of the World Panel on Financing Water Infrastructure, 2003:7) the estimate for total international inflow required is thus around US$10.9-11.3 billion per year i.e., 3-3.5 times increase from the present inflows. This figure then allows us to estimate the average cost in aid for each new person receiving W&S services. Till 2015, 1.5 billion more people will require access to water and 2.2 billion more people will require sanitation if the goals are to be reached (JMP, 2000). Since those deprived water are invariably deprived of improved sanitation, a reasonable assumption for the developing countries, the international flows will be distributed over 2.2 billion people. This implies that 15 years of target time will witness an additional 146.67 million people requiring both water and sanitation services each year. At a cost in aid of US$11 billion per year, the cost per person works out to be around US$75 as international inflows. It should be noted that this figure is the cost to provide both water and sanitation services for each additional person as well as maintaining existing services. This level of funding also takes account of the real world inefficiencies at all levels of water governance, which are unlikely to be resolved within the MDG timeframe. But providing full water and sewerage connections and primary wastewater treatment to the urban populations may raise the annual cost of the 2015 goal to much higher values and hence the estimates made are very conservative. This cost may be offset marginally if greater efficiencies are achieved in the water and sanitation services than during the last decade. But even the increased efficiencies are likely to help the developing countries slash down their domestic investments, the sources for which are already meager. Considering all these facts, the US$11 billion per year international inflows are very unlikely to be overestimated. The South Asia region is home to more than 200 million people lacking access to safe drinking water and 800 million without proper sanitation service (Davis, 2004); providing facilities to 800 million people in 15 years would require an international flow of $4billion per annum at a rate of US$75 per capita as estimated above. When compared against an existing aid level of $396.2 million (DAC, 2003) for South Asia this implies a 10 fold increase in international flows to the region. It must be stressed that these estimates are conservative and assume that current domestic investments will continue and additional domestic investments will be made in the same proportion as at present. Such domestic investments may not be forthcoming unless the international investments are sought in a big manner.

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Any solution to the possibility of fulfilling the MDGs related to W&S alone will incorporate three distinct possibilities:

1. International aid agencies must increase aid much more than 10-fold of the current levels in the W&S sector

2. International private investments be sought at much accelerated pace. 3. Internal efficiencies of utilities be increased drastically. The current status of these utilities

indicates that there is plenty of scope of increasing productivity of existing services. These solutions would require introduction of reforms and revamping of current water utilities structures, introduction of good governance and drastic change in the role of governments who almost completely run the sector currently. Solution 3 would additionally require reducing operational losses and a heightened role for benchmarking of utilities, a prerequisite for increasing sector efficiencies. Reducing costs and increasing revenues by operating more efficiently can enable utilities to obtain resources to invest in rehabilitating existing works and building new ones. Tools that can be undertaken to help utility managers to assess the situation and plan improvements include measures such as (FIRE (D), 2002):

• Leak detection surveys as part of leak reduction programs; • Water audits that measure production and use of water, and a check of the functioning of

water meters to enable utilities to create citizen awareness on the need for conserving water, improve water billing and collection, locate water thefts, regularize unauthorized connections, control unrecorded water, increase meter use, and keep accurate records of water use; and

• Energy audits that include an inspection of energy consumption of pumping stations on how efficiently they use energy. The audits identify energy saving measures and their costs. Appropriate energy conservation measures can reduce energy costs in the range 25-40% (FIRE(D),2002)

Benchmarking of water utilities is considered necessary for ranking and assessing performances, establishing goals and for formulating strategies by providing planners and policymakers with necessary decision-making inputs for refinement of existing utilities. Any endeavor towards fulfilling the millennium goals would imply reforming their operations and ways of management –financial, personnel and technical, or to pave way for private investment and operation now actively being promoted by the World Bank and other multilateral and bilateral institutions, or to evolve public private partnerships, all of which would require prior appraisal of institutions. Benchmarking of urban water supply and sanitation utilities, in this context of infrastructure management, is now perceived as an essential component of utility management. Internal efficiency improvements are always win-win options for the existing utilities. Benchmarking the operational and financial aspects can free up resources, which can bring down the overall resource requirement for utilities. This however, would require emergence of the concept of efficiency and productivity as this concept of adoption of quantifiable best practices has so far been almost completely ignored in the water sector in low-income countries including the countries in the South Asia.

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Efficiency measurements would be of particular interest to the regulators in the open market regimes. Efficiency measurement can form the core for introduction of the incentive based regulatory regimes and in promoting yardstick competition amongst a number of utilities. As the water utilities get progressively freed from the government control, the regulators would invariably require sophisticated benchmarking tools and methodologies to regulate the monopolies and to introduce incentive regulation while determining tariffs. Thus efficiency measurement is a primary step in the direction of ensuring sustenance in the water supply sector. Strategies to achieve the MDGs will ultimately depend on the types of technical and social constraints, the quality of governance, and the political will as well as the financial means available to a country. It seems clear that the projected doubling of investment levels required to achieve the water and sanitation targets cannot be funded through domestic sources alone, and international help would be required in a big manner, especially for the South Asian region. The Roots of The Problems In South Asia The major problems in the water sector in the south Asia region can be delineated to be originating from two factors:

• Poor governance of utilities and • Tariff structures that are too low to ensure that water be regarded as an economic good.

These two factors are responsible for a large number of specific problems that arise as a consequence including a plethora of technical, operational and financial inefficiencies. World-over the trend is that the water sector is almost completely, directly or indirectly, controlled by the governments; the public utilities are responsible for nearly 97% of the population concerned (Report of the World Panel on Financing Water Infrastructure, 2003:7). It is essential that the governments progressively and steadily modify their roles and move away from being service providers to become regulators. This would increase the autonomy of the utilities and would automatically bring in accountability and competition in a market situation. At present, the operations of water utilities are not transparent; data and information is either not collected or is not made public and benchmarking in the developing countries is virtually non-existent. It is essential that a concept of efficiency and productivity be introduced in the functioning of all water utilities. The role of policy and regulation, participation of the civil society, of reforms including the tariff restructuring and bringing in the concept of efficiency are all parts of good governance. Sound governance is likely to aim at cultivating autonomous, efficient and financially sustainable enterprises, with minimal political interference. In a survey of utilities in 19 countries, Yepes and Dianderas (1996) concluded that a “Staff per 1000 connections” value of less than 4 could be considered adequate (with room for improvement). Other Researchers such as Tynan and Kingdom, 2003, have shown that the developed counties have a staff per 1000 water connections mean value of 2.1 and the top 25% of utilities in the developing countries have 5 or less staff per 1000 connections. By contrast, the South Asia region reveals much higher ratios such as 17.1 for Calcutta; Chennai 25.9, Colombo 7.3, Dhaka 18.5; Kathmandu 15, and Karachi 8.4 (ADB 1997). These values assume significance since for many utilities rapidly increasing real wages are the major contributory factors for unsustainable personnel

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

costs (Yepes and Dindares, 1996). Such high ratios indicate profligate employment practices in the region that may arise either due to flawed policies or political interference in the working of water utilities. Low tariffs are often justified on the ground that water is a social good and that the poor cannot afford to pay high tariffs. The political factors play their own part in keeping the tariffs low. For water sector the consequences have been significant: low coverage, poor O&M practices, low staff morale, and prevalence of rampant corruption. For regions like South Asia low tariffs constitute formidable obstacle to the poor getting connected to piped water and water supplies remain intermittent rather than an assured 24-hour service. The poor actually often end up paying far more than their fair share since small vendors charge exorbitantly for the water sold and the poor have to pay as much as 10 times the cost of water from piped supplies (Pakistan Water Gateway 2004) for getting water of dubious quality. The resultant subsidies to compensate low tariffs benefit mainly those who are not poor since the poor either do not use the piped supplies (for example in India 60% of the poor do not have access to private connections (PPIAF, WB, WBI AND WSP (b) (2002)) or the poor have far too small consumptions so that larger users who are economically well off, seize most of the subsidies. There is evidence of “willingness to pay but unwillingness to charge” from consumers due to perceived risks of political fallouts. This has been concluded in studies such as WSP (1999) where 80% of the households were found willing to pay more than the prevailing tariffs in exchange of securing better services. A study by Vaidya (1995) in Baroda revealed that the consumers were actually willing to pay upto 3.4 times more than the municipal rates. In a Capacity building and learning initiative the PPIAF, WB, WBI AND WSP (2002a) have concluded that families living under poverty line can still afford to pay approximately upto 4 times the current typical water charges levied. And even this 4–fold increased tariff will be falling almost 2.5 times short of recovering just the O&M costs. This indicates the necessity of restructuring tariffs to realistic levels. Efficient tariffs can create incentives that ensure that users obtain the largest possible aggregate benefit by paying a given water cost. The very first step would be to evaluate mechanisms of water market—types of information required that could enable policy makers to set and enforce price regulation. Once this is done tariffs can be set to meet operations, debt service and capital expansion requirements. Appropriately set tariffs would encourage efficiency in the use of water. In countries where income disparities are large, as is the case for the South Asian region, the tariff structure can be designed to make the water services affordable to the poor by directing the subsidies appropriately. Reconciliation of all these objectives remains an elusive task, but is nevertheless a cherished goal for any government to ensure sustenance of the water sector. Setting of appropriate tariffs would involve several issues that would need to be addressed by the governments. Some of these issues could be:

• Setting up of differential tariff structure for various socio-economic groups • Question of taxes and subsidies--water pricing and subsidy distribution • Issues about affordability, agreed surplus (profit) target on historical costs, real cost of

providing extra cubic meter of water over long term etc. • Evaluation of consumer ability to pay & their willingness to pay

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

• Evolving means of efficient tariff collection

Inadequate tariffs are also often are cited to justify widely prevalent intermittent supplies in South Asia. In India for example, there hardly exists a utility that supplies water round-the-clock, with most utilities supplying intermittently for durations ranging from 2-8 hours (Shukla ,1999). Similar situation prevails in other South Asian cities: Faisalabad has a 7 hour supply, Dhaka 17 hours, , Karachi 1-4 hours, and Thimpu 12 hours of daily supply (ADB 1997). This obviously implies greater costs as pointed by Yepes et al.(2001), who have amply demonstrated that the cost of intermittent services exceeds that of continuous services if consumers’ coping costs are included. In fact, studies such as those by National Environmental Engineering Research Institute, 1994 have reported cost savings to the tune of 12-39 % by virtue of distribution systems alone when continuous supply is opted for. Thus, what is required is a change at the policy level and enactment and enforcement of legislation that holds water utilities accountable for not providing continuous supplies, wherever such supplies are technically feasible.

Inadequate tariffs also lead to low service coverage, as the utilities do not find enough resources to expand services. The result is that the poor are invariably left out. Although piped water supplies form the most reliable method of providing potable water to consumers, none of the countries in the South Asia has 100% coverage in terms of the population served (ADB, 2001). Although Bangladesh has achieved a remarkable 97% coverage with respect to access to safe drinking water for people living within 150 meters distance of a hand pump tube well, the reduction of incidence of water borne diseases has not been as high as expected due to the use of grossly contaminated alternate sources of water and lack of hygienic practices. In contrast, India has coverage of 85%, and Nepal 66%. The low coverage in the region is a reflection of inadequate tariffs and is an indicator of the need for greater investment flows in the water services to avoid the burden of water borne diseases and the coping costs associated with poor supplies. It is therefore, necessary that consumers be charged appropriate tariffs as well as affordable connection fee.

Inappropriate tariffs have also resulted in poor O&M conditions for the existing infrastructure. One of the important measures of the poor O&M state is the large Unaccounted for Water (UFW) defined as the difference between the water supplied and water billed (or sold). Although illegal connections and inappropriate billing may also be the contributors, the UFW is certainly a measure of the physical losses that occur during the water supplies. The pipe network comprises the bulk of the investment (about 70% of the asset value (Tynan and Kingdom, 2003)) and being underground and hence invisible, it often faces neglect in maintenance in favor of upkeep of more visible assets. UFW ranges around 16% (mean) for the developed countries, and is 23% for the top 25% of utilities in the developing countries (Tynan and Kingdom, 2003). In comparison the South Asian countries again fare poorly. Preliminary assessments indicate that the percentage of UFW in Indian cities is in the range of 50% (FIRE(D),2000). South Asian cities have matching losses. For example, the UFW figures for some of the cities are: Calcutta 50%, Colombo 35%, Lahore 40%, Kathmandu 40%, Thimphu 37-53% and Dhaka 51% (ADB, 1997). These high losses indicate the state of maintenance of the pipe networks and indicate the pressing need to charge appropriate tariffs. Remedial measures could be to install meters and enforce strict metering and discourage the practice of charging fixed tariffs from consumers who find it lucrative to avoid installing meters or not getting them repaired when required. The compulsory metering may also reduce the scope for malpractices in the sector.

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Prevalence Of Corruption in South Asian W&S Sector

The malpractices in the sector originate mostly due to poor governance. Lack of accountability, overstaffing of utilities (resulting in low salaries) and lack of transparency in the utility operations are primarily responsible for the corruption in the sector. Prevalence of corruption is essentially a hindrance to economic and social development and can effectively undermine development by distorting the rule of the law and weakening the institutional foundations on which sound and just economic growth depends. There is some scientific evidence that and corruption in delivery of public services in South Asia is widespread, although there is hardly any evidence that the government policies have addressed corruption in a significant manner.

Prevalence of corruption in South Asia has been reported by various researchers. For example, Paul (1995) documents the prevalence of informal payments for public service delivery in Indian cities. The World Bank has also recognized prevalence of corruption and has since 1996, supported more than 600 anticorruption programs and governance initiatives developed by its member countries. Since 1997 all World Bank country assistance strategies have included an assessment of ‘‘corruption risks’’ to Bank projects.

For the case of water and sanitation services, the rampant corruption in South Asia has been scientifically studied in nine institutions related to water and sanitation in India and Pakistan by Davis (2004). The study was carried out through more than 350 staff and 730 customer interviews in both urban and rural contexts, as well as from meetings with more than 320 elected officials, researchers, activists, journalists, and development professionals in South Asia. The findings indicate widespread corruption at every possible level (Table 3) be it customers or professional staff or administrators or leaders or contractors. The author reports that falsifying meter readings for enabling lower bills was quite common with 41 % customers (sample size 411) having paid bribes one or more times in 6 months while 73% of Water and Sanitation agency staff (sample size 176) reporting having colluded “about half the time”, or “very common” or “virtually every time” with median reported payment per transaction US $ 0.45; about 50% of staff reported “quite common” or “almost every time” side payments from contractors. Davis (2004) also reports concrete prevalence of favors and bribes for securing promotions and postings (transfers). The market for transfers is a form of corruption that can generally be addressed only with large-scale civil service reforms. Promotion of strategies that enhance the feedback mechanisms between customers, civic organizations, development agencies, and employees and strengthening of transparency in operational mechanisms are necessary to curb corruption. An effective anticorruption strategy may be built on five key elements as suggested by the World Bank (2004):

• Ensure increased Political Accountability • Promote Civil Society Participation • Create a Competitive Private Sector • Ensure Institutional Restraints on Power and • Improve Public Sector Management

Concluding Remarks

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Access to water and sanitation is critical for improving the lives of people and to achieve sustainable economic growths in the South Asia region. Currently the water and sanitation sector is troubled by a host of problems that arise as a consequence of poor governance and inappropriate tariff structures existing in the region. Any effort towards achieving the 2015 targets would invariably require increased international inflows of finance to the region, besides massive domestic investments and sector efficiency measures. Ultimate solutions would rivet around reforming the sector and backing the reforms with a strong political commitment to lead to the fulfillment of the millennium development goals. References

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Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

National Environmental Engineering Research Institute (NEERI), India (1994) ‘Evaluation of Engineering, Economics and Social Aspects of Intermittent vis-à-vis Continuous Water Supply in Urban Areas’ Report, NEERI, Nagpur, India Pakistan Water Gateway.(2004). 28 February 2004 http://www.waterinfo.net.pk/artwpwl.htm Paris. Paul, S. (1995). A report card on public services in Indian cities: A view from below. Public Affairs Centre, Bangalore. PPIAF, WB, WBI and WSP (a) (2002). Water Tariffs and Subsidies in South Asia: A scorecard for India, Paper 2,Public –private Infrastructure Advisory Facility, World Bank, World Bank Institute and the Water and Sanitation Program, December 2002 PPIAF, WB, WBI and WSP (b)(2002). Water Tariffs and Subsidies in South Asia: Do current water subsidies reach the poor India, Paper 4,Public –private Infrastructure Advisory Facility, World Bank, World Bank Institute and the Water and Sanitation Program, December 2002 Report of the World Panel on Financing Water Infrastructure (2003) ‘Financing Water For All’, Chaired by Michel Camdessus and Set up by World Water Council, 3rd World Water Forum and Global Water Partnership, p.31. Shukla R.S. (1999) ‘Urban Water Sector – Beyond 2000 AD’, Journal of Indian Water Works Association, Vol. XXXI No.3 Transparency International (2003). The 2003corruption perception index. Berlin: Transparency International. Tynan N. and Kingdom B. (2003) ‘A Scorecard for Water Utilities in Developing Countries’, The World Bank Group

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UN(b). (2000). Second Committee Recommends Proclamation Of International Decade On ‘Water For Life’, 2005-2015.Resolution 55/196, United Nations General Assembly 20 Dec., 2000, Fifty-eighth General Assembly Second Committee 36th Meeting (PM) Press Release GA/EF/3068 dated 09/12/2003. Vaidya C. (1995). A study on Willingness to pay for water and sanitation services-case study of Baroda, Report Housing and Urban Development Corporation, HUDCO, New Delhi, India WEHAB(2002). A Framework for Action on Water and Sanitation, World Summit on Sustainable Development, Johannesburg. World Bank. (2004). Anticorruption. Available at: www.worldbank.org/publicsector/anticorrupt/

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

WSP. (1999). Willingness to pay but unwilling to charge-do ‘willingness-to-pay’ studies make a difference? Field Note: Water and Sanitation Program-South Asia, DFID Yepes G. and Dianderas A. (1996) ‘Indicators, Water And Wastewater Utilities’ 2nd ed, Water and Sanitation Division of the Transportation, Water and Urban Development Department, TWUWS, Published informally by International Bank for Reconstruction and Development, World Bank. Yepes G, Ringskog K and Sarkar, S. (2001) ‘The high cost of intermittent water service’, Journal of Indian Water Works Association, Vol. XXXIII No.2

Table 1. Millennium Development Goals And Targets And The Role Of Water

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

* SOURCE : UN Millennium Development Goals

Goal* MDGs* Targets Envisaged* Water Contributes

1 Eradicate extreme poverty and hunger

1. Reduce by half the proportion of people living on less than a dollar a day

2. Reduce by half the proportion of people who suffer from hunger

Water is a factor of production in agriculture and industry and is a catalyst for development. Improved health result in better productivity and lesser loss of work

2 Achieve universal primary education

3. Ensure that all boys and girls complete a full course of primary schooling

Improved availability of daily necessities such as water can free up the children from the burden of carrying water and ensure greater enrolments.

3 Promote gender equality and empower women

4. Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015

In many societies women spend hours in procuring water for daily needs. Improved water availability can ensure greater opportunities and lesser health burdens for women.

4 Reduce child mortality

5. Reduce by two thirds the mortality rate among children under five

Improved water qualities and quantities drastically reduce infant and child mortalities.

5 Improve maternal health

6. Reduce by three quarters the maternal mortality ratio Improved food and water security and reduced risks from water related diseases contribute to better maternal health

6 Combat HIV/AIDS, malaria and other diseases

7. Halt and begin to reverse the spread of HIV/AIDS 8. Halt and begin to reverse the incidence of malaria and other

major diseases

Improved nutrition and water may reduce/delay mortality due to HIV. Improved water management is necessary to combat Malaria.

7 Ensure environmental sustainability

9. Integrate the principles of sustainable development into country policies and programmes; reverse loss of environmental resources

10. Reduce by half the proportion of people without sustainable access to safe drinking water

11. Achieve significant improvement in lives of at least 100 million slum dwellers, by 2020

Improved water and wastewater management necessary for ensuring sustenance of resources and for ensuring basic human dignity.

8 Develop a global partnership for development

12. Develop further an open trading and financial system that is rule-based, predictable and non-discriminatory. Includes a commitment to good governance, development and poverty reduction—nationally and internationally

13. Address the least developed countries’ special needs. This includes tariff- and quota-free access for their exports; enhanced debt relief for heavily indebted poor countries; cancellation of official bilateral debt; and more generous official development assistance for countries committed to poverty reduction

14. Address the special needs of landlocked and small island developing States

15. Deal comprehensively with developing countries’ debt problems through national and international measures to make debt sustainable in the long term

16. In cooperation with the developing countries, develop decent and productive work for youth

17. In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries

18. In cooperation with the private sector, make available the benefits of new technologies—especially information and communications technologies

Sustainable economic progress requires aprior availability and a fair distribution of social and economic basic goods and resources such as water. Global water partnerships can help forge a framework for better governance and replication of success stories through dialogues. Global partnerships in water can foster coordinated development and management of water, land, and related resources by maximizing economic and social welfare without compromising on the sustainability of vital environmental and ecological systems-a prerequisite for sustainable development.

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Table 2. Breakdown of investments in access to drinking water, sanitation, and municipal waste treatment for all developing countries

Table3. Rampant corruption in south Asian Water and Sanitation sector (Source: Davis 2004)

Source $ billion International External Aid Flows International Private Flows

5 2-2.75

Domestic Public Sector Investments Private Sector Investments

18-22 1-2

Source: Annamraju et al. 2001

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Customers Professional engineering staff

Senior agency administrators

Elected and unelected leaders

Contractors

Low-skilled staff

Bribes to falsify meter readings, conceal illegal connections

Professional engineering staff

Speed money to expedite new applications, repairs

Senior agency administrators

Payments for favorable reviews, promotions, transfers

Elected and unelected leaders

Money for advocacy (e.g., preventing disconnection)

Payments, services for advocacy reposts and transfers

Services for advocacy reposts and transfers

Contractors

Contract kickbacks, concealment of substandard work

Tendering kickbacks

Tendering kickbacks

Collusion in bids

Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Figure1. Region-wise distribution of people without access to water and sanitation (Source: JMP data, 2000)

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Mukul Kulshrestha and Atul K. Mittal (Accepted) “Water And Sanitation In South Asia In The Context of Millennium Development Goals” South Asia Economic Jr

Figure 2. Number of people to gain access by 2015 (in millions)

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