Lack of Water Holding Back Asian Growth

Article | 13 April 2015

Investment in water infrastructure is critical to the region's socioeconomic development.

Asia is the world’s most dynamic region with the fastest economic growth. Yet more than 75% of countries in the region face serious water shortages, which if left unmanaged pose a real threat to continued growth and prosperity.

The sources of Asia's water challenges are various and interconnected - ranging from a rapidly growing population, increasing and diversifying food demands, urbanization, unsustainable land-use change, to the excessive extraction of groundwater, water-related disasters, and climate change.

For example, of the world’s estimated 1.1 billion people without access to safe water, nearly 70% or 700 million come from Asia and the Pacific. The situation is even grimmer when it comes to sanitation. The region accounts for 2 billion of the 2.5 billion people who lack access to improved sanitation. And of these, 780 million in the region are still practicing open defecation.

In large parts of Asia and the Pacific, more than 80% of the volume of untreated wastewater leaches into accessible freshwater and coastal waters, affecting public health, livelihoods, and productivity. This problem is particularly grave in rural areas where 70% of the world’s poor reside.

Agriculture is the biggest user of regional water resources. As the region’s population - and prosperity - grow, widespread inefficiency in water use together with increasing demand for water-intensive food products are putting yet more pressure on finite water resources.

Tackling the global water crisis

Held every three years since 1997, the World Water Forum (WWF) is the largest international water event, providing a venue for stakeholders to work together on joint approaches to global water challenges.

This year’s   7th World Water Forum, taking place in Daegu and Gyeongbuk, in the Republic of Korea, on 12-17 April will attract lawmakers and other government officials from more than 150 countries.

The event is split into four segments - the Political Process, the Regional Process, the Thematic Process, and the Science and Technology Process, each containing topics developed in cooperation with industry professionals, governments, international agencies, academia, and NGOs into a common framework of goals and targets.

At the 7th World Water Forum, ADB and its partners are contributing knowledge in the following areas:

  • water security and sustainable development
  • financing for water management
  • public-private partnerships in the water sector
  • modernization of irrigation systems
  • green growth
  • water supply and sanitation.

ADB, through its Youth Initiative, is also supporting a group of 20 young people to join the Asia Pacific Youth Forum and to participate in sessions and serve as rapporteurs and communicators.

Water infrastructure financing

Among the event highlights will be the high-level panel on Financing Infrastructure for a Water-Secure World on 13 April, co-sponsored by the World Water Council and the Organisation for Economic Co-operation and Development (OECD). In this session, a report will be presented containing a number of proposals to influence the international debate on water infrastructure financing.

“The report underscores the importance of investing in strategic water infrastructure that can provide a solid platform for economic growth,” said Bindu Lohani, ADB Vice-President for Knowledge Management and Sustainable Development, who will head ADB’s delegation to the WWF. “We need to explore different business models for designing and operating such infrastructure with a move toward ‘green’ infrastructure that can complement the ‘gray’ kind.”

ADB launched its Water Financing Program in 2006, aimed at doubling ADB’s investments to over $2 billion annually during the period 2006-2010 or a total of $10 billion by the end of 2010. The program has been continued until 2020 with target investments to be sustained at $2.0 billion-$2.5 billion annually or a total of over $20 billion-$25 billion by the end of 2020.

The report also calls for international financing institutions to make better use of their balance sheets to boost lending for water infrastructure. To this end, ADB recently announced a plan to combine its concessional Asian Development Fund’s equity and lending operations with the balance sheet of its Ordinary Capital Resources. This will raise annual financing commitments (loans, guarantees, equity investments and grants) by up to 40%, from the current level of $13 billion to $15 billion-$18 billion in the coming years.

“I am looking forward to a fruitful conference which can raise the critical concerns of water security in the Asia-Pacific region and provide direction on better regional coordination of water issues. We also need a clear road map for accelerating universal access to safe drinking water and sanitation as the Sustainable Development Goals supersede the MDGs,” Mr. Lohani said.