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A Smart Investment

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In these difficult economic times, what would you say to an investment that offers an $8 return for every $1 you put in? What if I sweetened the deal by saying that as an ethical investment, it would lead to better health, higher rates of school attendance and would save hundreds of thousands of children's lives. Too good to be true?

Not according to the United Nations Development Programme: "On any measure of efficiency, investments in water and sanitation have the potential to generate a high return. Every $1 spent in the sector creates on average another $8 in costs averted and productivity gained. Beyond this static gain, improved access to water and sanitation has the potential to generate long-run dynamic effects that will boost economic efficiency."

Governments around the world are deciding how to direct increasingly finite resources to boost their economies. As they do, it is critical that this money be spent in the most efficient possible way and in the way most likely to benefit the people for whom basic improvements in quality of life would bring about the most positive change. In short, it is time to also look at water and sanitation as an engine of economic growth.

This is not just economic theory, but established practice with dramatic results. Rwanda has set itself apart in sub-Saharan Africa by investing political leadership, professional expertise and human capacity in order to put the country on track to meet its water and sanitation Millennium Development Goal targets by 2015.

During this same period the Rwandan economy grew at unprecedented levels, more than tripling in size from 2000 to 2009. While this growth cannot be attributed solely to improvements in these basic services, arguably investment in infrastructure including water and sanitation has played an important part.

As a new report from the international NGO WaterAid -- "Off-Track, Off-Target" -- shows, the costs of not investing are huge. In sub-Saharan Africa, around 5 percent of gross domestic product (GDP) is lost each year because of unsafe water and inadequate sanitation. In 2009 this translated into $47.7 billion lost, more than is provided in development aid to the entire continent ($47.6 billion in 2009). Imagine the potential of this extra boost to African economies for global financial security.

The price in human lives is even more shocking; 4,000 children under five will die today because of diarrheal diseases caused by drinking unsafe water and poor sanitation. That's 1.4 million children every year. One every 20 seconds. Children who will never have the chance to go to school, dream of what they want to be when they grow up, or make that dream come true.

Dr. Denis Bamouni, who is head of the local health clinic in Polesgo, Burkina Faso, sums it up well when he says, "Talking to patients, we realized the diarrhoea is linked to a lack of hygiene, clean water and sanitation facilities and also a dirty environment. Around 80 percent of the illnesses we see are due to a lack of drinking water and sanitation, so interventions in this field would reduce the incidences of these diseases. "

The situation in Burkina Faso is repeated all around the developing world. At any given time, half the hospital beds in developing countries are filled with people suffering from diseases associated with poor water, sanitation and hygiene.

The good news is the international community recognizes that something has to be done to address this crisis. Targets to halve the number of people without access to clean water and adequate sanitation are enshrined in the Millennium Development Goals, a commitment made by governments around the world.

The bad news, highlighted in the new WaterAid report, is that the sanitation target in particular is critically off track. We are likely to miss reaching it by not just a few years, but at current rates, by over two centuries in sub-Saharan Africa. In fact, as populations grow, there are now more people without access to sanitation than in 1990, the baseline level for the Millennium targets.

What should be done about this critical situation? The solutions are all related to leadership and money.

To get the sanitation target back on track sub-Saharan African governments need to spend 3.5 percent of GDP on water and sanitation. Donor governments in turn need to double the amount that they spend from their aid budgets on these services to around $10 billion.

This is a big thing to ask, which is why it is also important to focus on improvements to the way money is currently being spent. We need to make sure that money is going not only to providing services, but also to building capacity in those countries and regions where water and sanitation is most lacking. Simply put -- the spending needs to reach the poorest and the most vulnerable.

Water and sanitation is a smart, lifesaving investment. It does not just save lives. It also offers an outstanding economic return to countries and people in Africa and Asia. With an $8 return for every $1 invested, it is a deal that will pay off for the world's poor.

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