Poor Sanitation Impedes Indonesia’s Growth Potential

October 28, 2013

Jakarta, October 28, 2013 – Inadequate sanitation services impact  Indonesia’s economic growth potential, says the World Bank’s latest report on the country’s urban sanitation. Lack of adequate sanitation costs the country the equivalent of around 2.3 percent of the GDP annually in terms of health and environmental related economic losses, reports the review based on an earlier study done by the World Bank’s Water Sanitation Program (WSP). 

Indonesia’s impressive economic growth in recent years has not been matched by an increase in urban sanitation services. Less than 5 percent of the sludge collected from septic tanks is properly treated, and only about 1 percent of the wastewater generated by the population is treated, creating health and environmental concerns.  Furthermore, around 14 percent of urban dwellers still practice open defecation. 

“Almost half of Indonesia’s population lives in cities and many more will move to urban areas in coming years. Better wastewater and septage management services are urgently needed, especially for the poor,” says World Bank Country Director for Indonesia, Rodrigo Chaves. “The country would benefit from transformative solutions involving the public and private sectors, as well as increased public awareness of improved hygiene.”

Since 2000, the Government of Indonesia has carried out reforms in the water supply and sanitation sector which are showing results. For example, the Urban Sanitation Development Program (PPSP) has assisted hundreds of local governments in preparing city-wide sanitation plans.  Recently, Government commitment to improvements has been reflected in significantly increased funding for sanitation services, which has helped to finance about 1,700 decentralized wastewater systems and there are plans to construct many more of such systems.  The Government is also planning to construct centralized sewerage systems in large urban areas which will help to collect and treat wastewater in an environmentally safe manner.

“Quality urban sanitation services support the economic growth of cities, reduce health risks, and protect the environment,” says Sudipto Sarkar, World Bank Water Sector Practice Leader for the East Asia and Pacific region. Comprehensive and cost-effective measures are needed to improve sanitation, in order to achieve a better quality of life for the population, including the poor.”

The Indonesia urban sanitation review is part of the World Bank’s forthcoming East Asia and Pacific Urban Sanitation Review, which focuses on three emerging middle-income nations in the region: Indonesia, the Philippines and Vietnam. The regional and country reviews provide a framework for improvements in sanitation.

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