Aspects of Urban Water and Sanitation in the Context of Rapid Urbanization in Developing Asia

Abstract

The problem of access to urban water and sanitation services is be-coming all too obvious in developing Asia, especially in the less developed economies. Rapid urbanization in the coming years implies that the prob¬lem can only worsen under a "business-as-usual" sort of policy regime. Clearly, a redoubling of efforts is called for to deal with the situation. This paper attempts to examine some relevant key issues and identify ways of addressing them. Because access to water and sanitation services is income-elastic, particularly at lower income ranges, rapid and sustained economic growth will be important. Also significantly instrumental will be reduction in popu-lation pressures from a natural increase in and migration to large cities. This is so because of negative congestion effects, and there appears to be no clear economies of scale in the provision of water and sanitation services; on the contrary, there are indications that such services can be supplied less expen-sively in smaller cities and towns. There is ample scope for private sector provision and/or private fi-nancing of water via appropriate user fees; some cross subsidization scheme can be adopted to deal with equity issues. In the case of sanitation, given the typical public-goods problem, direct government intervention will be needed especially in low-income communities. Government decentralization and devolution appears beneficial for the whole issue of urban infrastruc¬ture and basic services. Local governments should therefore be accorded the necessary institutional and financial support to adequately perform this function. Finally, assistance to private enterprises could be sought from development finance institutions in the form of affordable loans that may be required during the first few years of operation.