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The challenge in Latin America: Access to drinking water and sustainable sanitation, now

About the blog

Gabriel Caldes
Advisor (MBA) Water Management, Strategic Management. Directed the creation of ECONSSA Chile sanitary company, Directed by the State the process of transfer of sanitary concession to private. Author of the book La Industria Sanitaria en Chile.
  • The challenge in Latin America: Access to drinking water and sustainable sanitation, now

Even though it does not seem logical, Latin America has an important share of the world's water resources. According to some sources, up to 33% of the world's water is in this region. This is nowadays part of the problem the continent has to face in order to increase the coverage of sanitation services. Among other issues, water resources are not well distributed in relation to the population centres with the highest demand.

According to international organisations, the region has experienced an increase in the proportion of people with access to drinking water, which went from 33% in 1960 to 95% in 2015. In the case of sanitation, the increase in coverage has been slower: currently, sewerage coverage is close to 65% and 28% of the population have waste water treatment services.

True enough, access to drinking water and sewerage services has improved in the region, but we have to point out that this index is measured according to the United Nations concept of 'improved drinking water sources', which, by their very nature could be precarious sources, not necessarily entailing direct, quality access to drinking water. The World Bank was warned that 'even in countries with high percentages of access to these services, in many cases people continue to experience serious problems, such as water turbidity, intermittent supply, or low pressure'. That is, if we applied the concept of safe, permanent and quality access to drinking water, the coverage in the region would be substantially lower, below 50% or 60%. The same would happen with sanitation.

In 2018, economic growth was following a downward trend in Latin America, which decreased from 4.5% in 2010, to nearly 2% or 1.5% of the GDP. This shows that the golden years of growth in LATAM ended several years ago, and so now water investments have to compete for public funds with other social sectors that are necessary for development, such as education, health, roads, ports, etc.

If we add to that the political uncertainty of some governments in the region over the past two years, such as those of Brazil, Argentina, Nicaragua, Venezuela, Peru and others, together with the effects of climate change, including drought, increased temperatures, heavy rainfall or water related natural disasters, we could think that increasing access to drinking water and sanitation is at risk.

Finally, the most successful models in the region, and the recommendations from different international organisations (Inter-American Development Bank, CEPAL, Development Bank of Latin America (CAF), World Bank) all agree that in the past few years the main issue, which used to be the supply of drinking water, has shifted to be the demand of drinking water and sanitation. This has changed the issues to focus on. On one hand is the institutional structure of services, understood as regulation through a stable technical-legal framework and, on the other hand, are cost-efficient investments: for systems to be sustainable, a tariff should be set that allows raising revenue and sustaining the system, to avoid depending on funds from the existing government's budget. If it is not possible to implement a tariff, the State has to determine the subsidies to be used.

Best practices indicate that the institutional structure should contemplate different roles: the operator who delivers the service according to certain rules, and the regulatory entity that monitors compliance with regulations and the quality of services. Both roles should be subject to regular public accountability mechanisms.

Currently, the challenge of service coverage in Latin America seems to revolve around the political arena; it is there that decisions are made concerning any necessary reforms and the allocation of funds, bearing in mind the high social return of this sector.

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