Islamabad, April 12, 2012 – Inadequate sanitation causes Pakistan economic losses totaling US$ 5.7 billion (PKR 343.7 billion) each year. This is equivalent to 3.9 percent of the country’s GDP, according to a new report published by the Water and Sanitation Program (WSP), a multi-donor partnership administered by the World Bank.
The report, The Economic Impacts of Inadequate Sanitation in Pakistan, is based on evidence on the adverse economic impacts of inadequate sanitation, which include costs associated with death and disease, accessing and treating water, and losses in education, productivity and time due to sanitation issues.
The report shows that the largest share of losses is due to premature mortality and other health-related impacts of poor sanitation being PKR 299.6 billion (US$4.9 billion) amounting to 87.2 percent of the total economic cost. This includes costs related to premature mortality, productivity loss due to illness and cost of treatment. The water-related economic cost is estimated as PKR16 billion (US$262.7 million), which includes costs related to bottled water, household treatment and pipe-water cost due to sanitation. The report also estimates welfare costs at PKR 22.8 billion (US$374.4 million) which includes time loss for defecating in the open. The economic cost for loss of tourism is estimated at PKR 5.4 billion (US$84 million).
“The total amount of the losses caused by poor sanitation in Pakistan is 7 times higher than the national health budget and 3.5 times higher than the national education budget", said Rachid Benmessaoud, World Bank Country Director for Pakistan. “These figures have caught the attention of policy-makers and Pakistan has already started the development of federal and provincial policies”.
In Pakistan, diarrhea is the largest contributor to health-related economic impacts resulting from poor sanitation, amounting to almost two-third of the total health-related impacts. 63% of the premature mortality-related economic losses out of the total economic impact are due to deaths and diseases among children under five. Diarrhea among children under five accounts for PKR 121.5 billion (US$ 2 billion) amounting to 40.5 percent of all health-related economic impacts. This is followed by acute lower respiratory infections, which account for about PKR 25.2 billion (US$ 414.9 million) amounting to 8.4 percent of all health-related impacts.
“Similar studies carried out in East Asia, Africa and elsewhere in South Asia indicated annual per capita losses of US$ 28.6 in Indonesia, US$ 29.6 in Bangladesh and US$ 20.0 in Nigeria,” said Christopher Juan Costain, Regional Team Leader for WSP in South Asia. Pakistan’s loss per capita is PKR 2,160 (US$ 35.5). For decades we have been aware of the significant health impacts of poor sanitation, this report not only puts a number on health losses, but also identifies and quantifies areas where sanitation takes a toll.
The report underlines that substantial investments are needed to improve sanitation. Poor sanitation needs to be given priority treatment at all administrative levels—local, provincial, and national—and investments should be made to build moderately improved and hygienic latrines in both urban and rural areas. These investments could include increased sanitation coverage, as already targeted in various government policies. This rising trend in the Government’s budgetary allocation to sanitation indicates a strong commitment to improve sanitation outcomes.
The report shows that sanitation and hygiene-related improvements will reduce premature deaths and related morbidity, limit domestic water-related costs, reduce absenteeism at schools and workplaces, and improve welfare and productivity.
Potential gain for Pakistan of about PKR 140 billion (US$ 2.3 billion) is expected as a result of comprehensive efforts to improve the level of sanitation, the report estimates.