Will economic stimulus packages benefit water and sanitation investments?

In various countries hurt by the economic crisis discussions emerge about speeding up infrastructure investments in public works to stimulate the economy. This will create jobs and lead to assets that contribute to the social and economic prosperity of a nation. Each US$ 1 billion invested in water and wastewater infrastructure projects generates more than 47,000 jobs. “Hopefully, this emerging trend to stimulate economies through infrastructure may also directly benefit water and sanitation,” writes my colleague editor Pamela Wolfe in her commentary in World Water and Environmental Engineering of November/December 2008.

Wolfe is doubtful whether it will happen. She cites lack of political will among national leaders to explain why water and wastewater treatment and services remain inadequate in many countries. In her USA, a 70 percent decline in federal support for wastewater infrastructure in the past two decades has hurt local and state governments. Municipalities across the nation face enormous difficulties in meeting the US$ 300 to 500 billion funding gap in water and waster water infrastructure. The various agencies urged Congress to authorize US$ 6.5 billion for the repair and construction of publicly owned sewerage treatment works for which works could start within a few weeks.

Economic benefits
In the Source electronic newsletter (of which I am co-editor) we reported already in 2004  that an additional investment in water and sanitation of around US$ 11.3 billion (EUR 9.47 billion) per year over and above current investments could result in a total economic benefit of US$ 84 billion (EUR 70.4 billion) annually. The report was by the World Health Organization (WHO) on the economic benefits and practical means of achieving the Millennium Development Goals’ (MDG) sanitation target.

The economic benefits would range from US$ 3-34 (EUR 2.5 -28.5) per US$ 1 (EUR 0.838) invested, depending on the region. Additional reductions in exposure to contaminated drinking-water, such as through household-level disinfection, would lead to an overall benefit ranging from US$ 5-60 (EUR 4.2-50.3) per US$ 1 invested, the report estimates. Among the health benefits would be a 10 per cent decrease on average of the global incidence of diarrhoeal disease.

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