71733 Flagship Report Economic Impacts of Inadequate Sanitation in Bangladesh Economic Impacts of Inadequate Sanitation in Bangladesh Acknowledgements The Sanitation Impact Study was first conducted in several East Asian countries by the World Bank’s Water and Sanitation Program (WSP), East Asia and Pacific office. From the East Asia experience, WSP developed a comprehensive methodology that is now being applied in many countries. Using this methodology, WSP carried out the study in 2010 in Bangladesh. The study was conducted by Dr Abul Barkat, Professor, Economics Department, University of Dhaka, Dhaka, Bangladesh, over a year with two major peer-review processes. The team was led by Rokeya Ahmed (Water and Sanitation Specialist) and supported by Mark Ellery (Water and Sanitation Specialist) and Vandana Mehra (Communication Specialist) as the Task Team Leader. We are grateful to Dr Guy Hutton for his role in leading the development of the concept and developing the methodology for the Economics of Sanitation Initiative. He also made substantial contributions to this report and guided the team during the final stages to incorporate the peer reviewers’ comments in the final draft. Key aspects of the study’s methodology and some of its preliminary results were presented at a workshop in April 2010, where valuable comments that greatly enhanced the quality of this report were received. In particular, the authors are thankful to Monzur Hossain, Secretary of the Local Government Division (MLGRDC); Zuena Aziz, Joint Secretary, MLGRDC; and Khaja Miah, Deputy Secretary, MLGRDC; and Hans Spruijt, head of the WES Section of UNICEF. We are indebted to the external and internal peer reviewers of this document. Our thanks to Dr Iftekhar Hossain (DFID), Dr Md. Khairul Islam (WaterAid), Dr Tania Dmytraczenko (World Bank), and Karar Zunaid Ahsan (World Bank). Special thanks are also extended to Dr Anupam Tyagi, Dr Somnath Sen, Ravikumar Joseph, and Dr Selim Raihan for their comprehensive review of the first draft and suggestions for improvement. Finally, we would like to express our appreciation to Tahseen Sayed, Operations Adviser, The World Bank, Bangladesh, and Christopher Juan Costain, Regional Team Leader, Water Sanitation Program in South Asia, for their overall guidance and support to this project. WSP reports are published to communicate the results of WSP’s work to the development community. Some sources cited may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed herein are entirely those of the author and should not be attributed to the World Bank or its affiliated organizations, or to members of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to wsp@ worldbank.org. WSP encourages the dissemination of its work and will normally grant permission promptly. For more information, please visit www.wsp.org. Editor: Marc P. DeFrancis Created by: Write Media © 2012 Water and Sanitation Program 2 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Contents Contents List of Abbreviations...........................................................................................................................................................6 Preface...................................................................................................................................................................................7 Country Profile of Bangladesh..........................................................................................................................................8 Executive Summary.............................................................................................................................................................9 1. Introduction....................................................................................................................................................................15 Background.....................................................................................................................................................................15 Sanitation and Quality of Life........................................................................................................................................17 Overview of the Current Status of Sanitation...............................................................................................................18 Rationale of the Study...................................................................................................................................................20 2. Methodology..................................................................................................................................................................22 Introduction....................................................................................................................................................................22 Scope of the Study........................................................................................................................................................22 Main Sources of Data....................................................................................................................................................23 Estimation of Costs........................................................................................................................................................24 Health-Related Costs....................................................................................................................................................25 User Preference, Time Loss, and Welfare Cost...........................................................................................................40 Sensitivity Analysis........................................................................................................................................................43 Gains from Sanitation and Hygiene..............................................................................................................................44 Limitations of the Study.................................................................................................................................................45 3. Economic Impact Results............................................................................................................................................46 Overview of Results.......................................................................................................................................................46 Health Impacts...............................................................................................................................................................51 Domestic Water Impacts...............................................................................................................................................59 Access Time Impacts....................................................................................................................................................65 Sensitivity Analysis........................................................................................................................................................69 Potential Gains from Sanitation and Hygiene Interventions.......................................................................................70 4. Conclusion and Lessons Learned...............................................................................................................................71 Summary of Impacts......................................................................................................................................................71 Key Lessons Learned....................................................................................................................................................72 Annex A : Algorithms............................................................................................................................................................74 References.........................................................................................................................................................................77 List of Figures Figure 1.1 Disease Transmission Path Through the F-Diagram.................................................................................15 Figure 1.2 Primary and Final Impact of Improved Sanitation Options.......................................................................16 Figure 1.3 Improved Sanitation Coverage Statistics for South Asian Countries, 1990 and 2004...........................19 Figure 3.1 Economic Impacts of Inadequate Sanitation, by Category......................................................................46 Figure 3.2 Summary of Economic Impacts of Inadequate Sanitation.......................................................................47 Figure 3.3 Economic Impacts of Inadequate Sanitation as Percent of Gdp............................................................48 Figure 3.4 Health, Water-Related, and Access Time Impacts as Percent of Total Economic Impacts..................48 Figure 3.5 Per-Capita Economic Impacts of Inadequate Sanitation.........................................................................49 www.wsp.org 3 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.6 Per-Capita Financial Impacts of Inadequate Sanitation...........................................................................................50 Figure 3.7 Cases of Diarrhea and ALRI Resulting from Inadequate Sanitation........................................................................51 Figure 3.8 Deaths Attributed to Inadequate Sanitation as Percent of All-Cause Deaths........................................................52 Figure 3.9 Distribution of Health Economic Impacts of Inadequate Sanitation in Bangladesh in 2007..................................54 Figure 3.10 Distribution of Economic Impacts of Inadequate Sanitation by Diseases..............................................................54 Figure 3.11 Percent Distribution of Economic Impacts of Premature Mortality from Inadequate Sanitation..........................55 Figure 3.12 Distribution of Economic Impacts of Premature Mortality, by Age Category.........................................................55 Figure 3.13 Distribution of Economic Impacts of Inadequate Sanitation Via Premature Death Among Children Under Five.............................................................................................................................56 Figure 3.14 Economic Impacts of Morbidity as Percent of Health Impacts of Inadequate Sanitation, by Disease.................57 Figure 3.15 Percent Distribution of Economic Impacts of Morbidity Due to Inadequate Sanitation Among Treatment Cost and Productivity................................................................................................................................57 Figure 3.16 Percent Distribution of Morbidity Costs of Inadequate Sanitation..........................................................................58 Figure 3.17 Percent Distribution of Drinking Water Sources.......................................................................................................60 Figure 3.18 Domestic Water-Related Economic Impacts of Inadequate Sanitation, by Residence.........................................61 Figure 3.19 Percent of Households Using Various Drinking Water Treatment Methods...........................................................62 Figure 3.20 Percent Distribution of Annual Economic Impacts of Various Water Treatment Methods, by Location (Rural, Urban, and National).......................................................................................................................................63 Figure 3.21 Percent Distribution of Annual Economic Impacts Among Rural and Urban Locations, by Water-Treatment Method.............................................................................................................................................63 Figure 3.22 Percent Distribution of Cost of Piped Water Due To Inadequate Sanitation Among Rural and Urban Households.......................................................................................................................................................64 Figure 3.23 Percent Distribution of Economic Cost of Hauled Water Among Rural and Urban Households..........................64 Figure 3.24 Percent of Population Defecating in Open Places or Using Shared Toilets............................................................65 Figure 3.25 Access Time Lost Due to Inadequate Sanitation......................................................................................................67 Figure 3.26 Economic Cost of Access Time Lost Due to Inadequate Sanitation.......................................................................67 Figure 3.27 Lower Bound of Economic Cost of inadequate Sanitation In Schools and Workplaces.......................................68 Figure 3.28 Low, Base, and High Estimates for Total Economic Impacts of Inadequate Sanitation........................................69 Figure 3.29 Low, Base, and High Estimates for Health, Water, and Access Time Economic Impacts of Inadequate Sanitation.................................................................................................................................................69 List of Tables Table 1.1 Joint Monitoring Program (Jmp) Definition of Improved and Unimproved Sanitation and Water Supply.............17 Table 1.2 Improved Sanitation Coverage Statistics for Bangladesh, Asia, Africa, and Latin America (by Region) (in Percentage of Population), 1990 and 2004......................................................................................18 Table 1.3 The Sanitation Situation in Bangladesh in 2006: Percent of Population with Access to Each Type of Sanitation, by Rural and Urban Residence............................................................................................................19 Table 1.4 Personal Hygiene Practices in Bangladesh, 2006: Percent of Population, by Rural and Urban Residence........20 Table 2.1 Aspects of Sanitation Included and Excluded in the Present Sanitation Impact Study........................................22 Table 2.2 Financial Costs and Nonmonetary Costs of Poor Sanitation..................................................................................25 Table 2.3 Diseases Attributable to Poor Sanitation Included in this Study.............................................................................25 Table 2.4 Disease-Specific Deaths by Age Group....................................................................................................................26 Table 2.5 Current and Counterfactual Rates of Underweight Prevalence...............................................................................27 Table 2.6 Relative Risk of Mortality by Degree of Underweight for Children Under Age Five...............................................27 Table 2.7 Attributable Fraction for Malnutrition, Selected Diseases........................................................................................28 Table 2.8 Total Annual Deaths Due to Inadequate Sanitation, by Disease and Age Group...................................................29 Table 2.9 Total Death Rates Among Children Under Age Five.................................................................................................29 Table 2.10 Economic Cost of a Premature Death Using the Hca and Vosl Approaches......................................................31 Table 2.11 Population Age Distribution, 2008..............................................................................................................................31 4 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.12 Annual Diarrheal Disease Cases, by Age Group.......................................................................................................32 Table 2.13 Percentage of Persons Treated for Helminthes During the Year (percent).............................................................32 Table 2.14 Relative Risk of Illness by Degree of Underweight...................................................................................................33 Table 2.15 Alri Prevalence Rate (Percent) for Children Under Five.........................................................................................33 Table 2.16 Attributable Fraction for Malnutrition, Alri, and Malaria.........................................................................................33 Table 2.17 Annual Alri and Malaria Cases Attributable to Poor Sanitation, Children Under Five.........................................34 Table 2.18 Percentage of Diarrheal Cases Treated, by Place of Treatment, Children Under Five..........................................34 Table 2.19 Percentage of Alri Cases Treated, by Place of Treatment, Children Under Five..................................................34 Table 2.20 Household Water Treatment, by Method (Percent of Households).........................................................................36 Table 2.21 Percentage Distribution of Households Using Fuel for Cooking, by Fuel Type......................................................36 Table 2.22 Financial and Nonmonetary Costs of Treating Drinking Water................................................................................38 Table 2.23 Annual Cost of Water Treatment (Boiling and Bleach) per Household...................................................................38 Table 2.24 Percent and Number of Households Using Piped Drinking and Non-Drinking Water...........................................39 Table 2.25 Annual Consumption of Piped Water.........................................................................................................................39 Table 2.26 Fetching Drinking Water: Number of Households and Average Time Spent..........................................................39 Table 2.27 Percent of Population with No Toilet Facility, by Age Group...................................................................................40 Table 2.28 Percent of Population Defecating in Open Places, by Age Group...........................................................................41 Table 2.29 Percent of Population Using Shared Latrines, by Age Group...................................................................................41 Table 2.30 PopulatIon Defecating In Open and Using Shared Latrines, by Age Group............................................................41 Table 2.31 Number and Percent of Girls Ages 10 to 19 in Schools Without Separate Toilets................................................42 Table 2.32 Women Absent from Work Due to Poor Sanitation at the Workplace.....................................................................43 Table 2.33 Ranges of Parameter Values Used in Sensitivity Analysis.......................................................................................43 Table 2.34 Diarrhea Incidence Reduction from Types of Sanitation and Hygiene Intervention...............................................44 Table 2.35 Benefits from Sanitation and Hygiene Interventions, by Intervention Type............................................................44 Table 3.1 Economic and Financial Impacts of Inadequate Sanitation.....................................................................................47 Table 3.2 Per-Capita Economic and Financial Impacts of Inadequate Sanitation..................................................................49 Table 3.3 Potential Economic Gains from Sanitation and Hygiene Interventions...................................................................50 Table 3.4 Annual Cases of Diarrhea and Alri Attributable to Sanitation.................................................................................52 Table 3.5 Percent of Deaths Attributable to Inadequate Sanitation and Hygiene, b y Disease and Age Group...................53 Table 3.6 Deaths, Cases, and Time Lost from Inadequate Sanitation.....................................................................................53 Table 3.7 Health-Related Economic Impacts of Inadequate SanItation from Various Diseases............................................56 Table 3.8 Age Distribution of Treatment Costs of Sanitation-Related Diseases (Tk. Million).................................................58 Table 3.9 Health-Related Productivity and Welfare Costs of Inadequate Sanitation, by Disease and Age Group (Tk. Million)...................................................................................................................................................................59 Table 3.10 Sources of Household Drinking Water (in Percent of Households).........................................................................60 Table 3.11 Domestic Water-Related Economic Impacts of Inadequate Sanitation, by Location and Type of Impacts.........61 Table 3.12 Economic Impacts from Treatment of Household Water Due to Inadequate Sanitation (Tk. Million)...................62 Table 3.13 Percent Distribution of Household Access to Various Types of Toilet, Urban vs. Rural........................................66 Table 3.14 Number of Persons and Percent of Population Defecating in the Open and Using Shared Toilets, Urban vs. Rural............................................................................................................................................................66 Table 3.15 Economic Cost of Extra Time Spent in Accessing Open Defecation Sites and Shared Toilets, Urban vs. Rural............................................................................................................................................................68 Table 3.16 Lower Bound of Economic Cost of Inadequate Sanitation in Schools and Workplaces, Urban vs. Rural...........69 Table 3.17 Potential Gains from Sanitation and Hygiene Interventions....................................................................................70 www.wsp.org 5 Economic Impacts of Inadequate Sanitation in Bangladesh List of Abbreviations ALRI acute lower respiratory infections BDHS Bangladesh Demographic and Health Survey DGHS Directorate General of Health Services ESI Economics of Sanitation Initiative (World Bank) GDP gross domestic product HCA Human Capital Approach ICDDR,B International Centre for Diarrheal Disease Research, Bangladesh JMP Joint Monitoring Program LPG liquefied petroleum gas MDG Millennium Development Goals MICS Multiple Indicator Cluster Survey OECD Organisation for Economic Co-operation and Development Tk. Taka (currency of Bangladesh) UALS unemployment-adjusted labor share UNICEF United Nations Children’s Fund VOSL Value of Statistical Life WHO World Health Organization WSP Water and Sanitation Program 6 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Preface Access to sanitation facilities is a fundamental human right the biggest killers of young children are diarrheal disease that acts as a safeguard to health and dignity. When sanitation and acute lower respiratory infections (ALRI) via diarrhea- systems fail or are inadequate, the impacts on the health of induced malnutrition. the community, the health of others, and the environment can be extremely serious. Good sanitation is vital for good To gather strong evidence on the impact of poor sanitation health and for wealth creation as well. The economic benefits on both human beings and the environment, the World of improved sanitation include savings in health costs, higher Bank’s Water and Sanitation Program (WSP) has developed worker productivity, better school attendance and quality of a global research program, the Economics of Sanitation education, and reduced water treatment costs. Initiative (ESI). This study estimates the economic impact of inadequate sanitation in Bangladesh as part of that larger Contamination of water sources by improper sanitation is a research program. form of man-made pollution, one that is of serious concern. One out of three people in the world does not have access There is no denying the fact that improving sanitation should to good sanitation, and one out of six people in the world be a very high priority for the economic development of does not have access to clean and safe water. Most of these Bangladesh. This study provides evidence and information on people live in Africa, Asia, and South America. Providing the links between poor sanitation and economic development adequate sanitation facilities for everyone is a major challenge in this country. It also provides conservative estimates of the for developing countries. In Asia in particular, people economic effects inadequate sanitation has on health, water, without access make up 62 percent of the population, and and people’s time (due to access to latrines). www.wsp.org 7 Economic Impacts of Inadequate Sanitation in Bangladesh Country Profile of Bangladesh Indicator 2007 Infant mortality rate (per thousand) 52 Under-five mortality rate (per thousand) 65 Percent of children under age five with diarrhea treated with ORT 81.2 Percent of children under age five with diarrhea treated with increased fluid intake 48.1 Percent of children under age five with symptoms of ALRI seeking care from a trained provider 37.1 Nutritional status of children (percent of children under age five considered malnourished according to:) Height-for-age (stunting) Severe 16.1 Moderate or severe 43.2 Weight-for-height (wasting) Severe 2.9 Moderate or severe 17.4 Weight-for-age (underweight) Severe 11.8 Moderate or severe 41.0 Proportion of total population using an improved sanitation facility 39 8 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Executive Summary Over the last two decades, Bangladesh has emerged as and then to 53 percent as of 2008. In recognition of the the leader in experimenting with and implementing challenges, the Government of Bangladesh has revised its innovative approaches to rural sanitation in Asia. At the ambitious target of ‘Sanitation for All’ from completion First South Asian Conference on Sanitation (SACOSAN) by 2010 to completion by 2013, a goal that would still be in 2003, the Government of Bangladesh announced its well ahead of the MDG target. target of ‘Sanitation for All by 2010.’ This commitment was reflected in the first National Strategy for Accelerated This study estimates the nonmonetary, financial, and Poverty Reduction (Planning Commission, 2005). Since economic costs of poor sanitation in the areas of health, 2003, the percentage of people defecating in the open drinking water, and domestic water, as well as user has declined dramatically. More than 88 percent of the preference and welfare. Financial costs refers to the direct population now has access to latrines, although these financial expense paid in monetary terms by someone, are mainly low-cost pit latrines. According to the Joint such as changes in household and government spending Monitoring Program of the World Health Organization and real income losses for households. Nonmonetary costs (WHO) and UNICEF, Bangladesh’s sanitation coverage consist of both longer-term financial impacts (such as less rose from 20 percent in 1990 to 39 percent in 2004 educated children, fewer children, and loss of working Economic Impact of Inadequate Sanitation 295.48 249.19 31.78 14.51 Health Water Access Total time economic (in billion Taka) cost Economic Impact of Inadequate Sanitation (as Percent of GDP) 6.3 5.31 0.68 0.31 Health Water Access Total time economic cost www.wsp.org 9 Economic Impacts of Inadequate Sanitation in Bangladesh people due to premature death or relevant morbidity), and and equivalent to 5.3 percent of the country’s GDP nonfinancial implications, such as the value of loss of life, in 2007.3 time-use of adults and children, and intangible impacts. • The water-related impact of inadequate sanitation, resulting from the costs of accessing cleaner water, is • This report estimates that inadequate sanitation has Tk. 14,510 million, which is 5 percent of the total substantial economic impacts in Bangladesh. The economic impact and equivalent to 0.3 percent of estimated annual economic impact of inadequate GDP in 2007.4 sanitation is Tk. 295.48 billion ($4.23 billion1) • Welfare and time losses, which stem from not having which is equivalent to 6.3 percent of the GDP.2 proper access to toilet facilities, are Tk. 31,779 • Losses related to health are the single largest million, which is 11 percent of the total economic contributor to the economic impact due to impact and equivalent to 0.7 percent of GDP.5 inadequate sanitation and hygiene. These health- • Financial losses, resulting from health as well as related losses are equal to Tk. 249,186 million, water-related financial losses, are estimated to be which is 84 percent of the total economic impact Tk. 34,554 million ($494 million) in 2007.6 This Per-capita economic impact 2,072 1,747 102 223 Health Water Access time Total impact (in Tk.) Distribution of MORBIDITY COSTS BY DISEASE ALRI, 9% Intestinal worms, 3% Diarrhea, 88% Malaria, 0.001% 1 Throughout this report, all dollar figures are in US dollars, measured by a conversion of 1 US$ = Bd. Taka 70. 2 In 2009 prices, it is Tk. 339.802 billion ($4.85 billion), which is 5.53 percent of GDP in 2009. 3 In 2009 prices, it is Tk. 286,563.9 million, which is 4.66 percent of GDP in 2009. 4 In 2009 prices, it is Tk. 16,686.5 million, which is 0.27 percent of GDP in 2009. 5 In 2009 prices, it is Tk. 36,568.85 million, which is 0.59 percent of GDP in 2009. 6 In 2009 prices, it is Tk. 39,737.1 million, which is equivalent to $567.6 million. 10 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Distribution of health-related economic impacts Productivity loss, 13% Treatment costs, 9% Premature death, 78% represents 12 percent of total economic impacts and to productivity losses from poor sanitation and is equivalent to 0.7 percent of the GDP.7 hygiene. The costs of treatment represent 9 percent • Total per-capita economic impacts due to inadequate (Tk. 22,144 million) and the costs of premature sanitation and hygiene are Tk. 2,072 ($29.60). Of deaths 78 percent (Tk. 195,101 million) of the total this amount, Tk. 1,747 ($25) per capita is the loss health impacts.11 Deaths, treatment, and productivity related to health, Tk. 102 ($1.50) is related to water, losses caused by diarrhea have the largest impacts in and Tk. 223 ($3.20) is related to access time.8 each of these categories of health impacts. • Financial loss per capita due to inadequate sanitation Reviewing the different kinds of economic losses according and hygiene is Tk. 242 ($3.50), of which Tk. 213 to the disease vector through which they occur, the impacts ($3.00) per capita is the loss related to health and of inadequate sanitation can be further broken down Tk. 29 ($0.40) per capita is related to water.9 this way: • Of the total health-related economic impacts, • Productivity losses make up 18 percent (Tk. 13 percent (Tk. 31,941 million)10 can be attributed 29,030 million) of diarrheal impacts, 33 percent economic impact OF INADEQUATE SANITATION, BY DISEASE 100% 80% 60% 40% 20% 0% Diarrhea Helminthes ALRI Measles Malaria Other causes Premature death 70% 26% 85% 100% 99.9% 100% Treatment 12% 41% 8% 0.04% Productivity 18% 33% 6% 0.05% 7 It is 0.65 percent of GDP in 2009. 8 In 2009 prices, the economic cost due to inadequate sanitation and hygiene is Tk. 2,382 ($34.04), the loss related to health is Tk. 2,009.05 ($28.7), the loss related to water is Tk. 117.3 ($1.68), and the loss related to access time is Tk. 256.45 ($3.66). 9 In 2009 prices, per capita financial impacts related to health amount to Tk. 278.3 ($3.98) and those related to water amount to Tk. 33.35 ($0.48). 10 In 2009 prices, Tk. 36,732.15 million. 11 In 2009 prices, the cost of treatment is Tk. 25,465.6 million and impact due to premature deaths is Tk. 224,366.15 million. www.wsp.org 11 Economic Impacts of Inadequate Sanitation in Bangladesh Economic impact of morbidity by disease 80% 74% 60% 40% 30% 22% 20% 15% 0.1% 0% Diarrhea Intestinal worms ALRI Malaria Total (Tk. 714 million) of helminthes (intestinal worms) responsible cause for the high cost of morbidity due to poor sanitation impacts, 6 percent (Tk. 2,197 million) of ALRI in Bangladesh. impacts, and 0.05 percent (Tk. 0.24 million) of • The impact on total domestic water costs due to malaria impacts.12 inadequate sanitation is equal to Tk. 14.51 billion.14 • Economic losses due to premature deaths make up 70 Of this amount, the total economic cost15 of treating percent (Tk. 110,489 million) of diarrheal impacts, household water is Tk. 9.84 billion, 68 percent of the 26 percent (Tk. 549 million) of helminthes impacts, total.16 The costs incurred in accessing piped water 85 percent (Tk. 29,762 million) of ALRI impacts, (including relocating) add up to Tk. 1.13 billion 100 percent (Tk. 9,773) of measles impacts, 99.9 (8 percent), and the cost of hauling cleaner water percent (Tk. 470 million) of malaria impacts, from outside the household premises is Tk. 3.54 and 100 percent (44,058) of impacts through billion (24 percent).17 The financial cost of household other causes.13 water treatment is Tk. 3.04 billion (73 percent), • Economic losses due to morbidity constitute a good and the financial cost of piped water attributable to share of the health impacts within each disease sanitation is Tk. 1.13 billion (27 percent).18 category: 0.1 percent of losses from malaria, 15 • The estimated total costs due to loss of time by persons percent of those from ALRI, 74 percent of those from lacking adequate facilities is equal to Tk. 31.78 helminthes, and 30 percent of those from diarrheal billion.19 An extra 5,119 million hours were spent impacts result from morbidity. accessing open defecation sites and shared toilets in Of the total morbidity cost due to inadequate sanitation, 2007. The economic cost of this lost access time is diarrhea accounts for 88 percent, ALRI for 9 percent, and estimated to be Tk. 30.11 billion.20 Of this total, helminthes for 3 percent. Therefore, diarrhea is the single most 3.47 billion hours and Tk. 17.36 billion (57 percent) 12 In 2009 prices, productivity losses are Tk. 33,384.5 million of diarrheal impacts, Tk. 821.1 million of helminthes impacts, Tk. 2,526.55 million of ALRI impacts, and Tk. 0.276 million of malaria impacts. 13 In 2009 prices, among premature deaths, diarrheal impacts cost Tk. 127,062.35 million, helminthes impacts cost Tk. 631.35 million, ALRI impacts cost Tk. 34.23 million, measles impacts cost Tk. 11,238.95 million, malaria impacts cost Tk. 540.5 million, other causes impacts cost Tk. 540.5 million. 14 In 2009 prices, it is Tk. 16.685 billion. 15 Note: The study estimated both economic costs and financial costs, which are not the same thing. Economic cost equals financial cost plus nonmonetary cost. Financial costs are the direct expenses paid in financial terms. Nonmonetary costs include time spent for collecting fuel wood, storing boiled water, and so on, as explained elsewhere in this report. In the above example of the cost of household treatment of water, Tk. 9.84 billion is the economic (total) cost and Tk. 3.04 billion is the financial cost. 16 In 2009 prices, it is Tk. 10.902 billion. 17 In 2009 prices, the cost of piped water is Tk. 1.3 billion and of hauling water is Tk. 4.07 billion. 18 In 2009 prices, the cost of household water treatment is Tk. 3.5 billion and of piped water used for sanitation is Tk. 1.3 billion. 19 In 2009 prices, it is Tk. 36.547 billion. 20 In 2009 prices, it is Tk. 34.65 billion. 12 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Low-, base-, and high-case estimates of total economic impact 20.0% 900,000 813,006 16.0% 700,000 As percent of GDP 17.2% 12.0% 500,000 8.0% 295,476 300,000 176,510 4.0% 6.3% 3.7% 100,000 0.0% Low Base High (in million Tk.) Tk million % of GDP in costs are due to extra time used in accessing to gains worth Tk. 110,559 million (equivalent to open defecation sites, and 1,647 million hours and 2.3 percent of GDP), or Tk. 775 per person.26 Tk. 12.75 billion (43 percent) in costs are due to • Much of the water contamination occurs due the extra time used to reach shared toilets.21 The to improper containment and disposal of fecal economic costs of inadequate sanitation in schools matter. Interventions that aim at safe confinement due to the loss of time is estimated to be Tk. 853.37 and disposal of fecal matter after appropriate million for girls and Tk. 813.96 million for working sewage treatment would have generated gains of women, totaling Tk.1.67 billion.22 Tk. 93,116 million (equivalent to 2 percent of GDP), or • Sensitivity analysis has been conducted using Tk. 653 per person.27 different input values for low, base, and high estimates of inadequate sanitation in Bangladesh RECOMMENDATIONS in 2007. It appears that the low-case estimate for Based on the research findings, seven major recommendations economic impacts is Tk. 176,510 million (equivalent are proposed, as follows: to 3.7 percent of GDP), the high-case estimate is Tk. 813,006 million (equivalent to 17.2 percent of Increased investment in water and sanitation GDP), and the base-case estimate is Tk. 295,476 is needed million (equivalent to 6.3 percent of GDP).23 It is important to ensure that sanitary latrines are within • The study estimates that improved hygiene behavior easy access of every household, including urban households, could have resulted in gains of Tk. 143,913 million by promoting multiple technology options. These range (equivalent to 3.0 percent of GDP), or Tk. 1,009 per from pit latrines to water-borne sewerage, with special focus person.24 Improved sanitation could have led to gains on helping households move from very basic latrines to of Tk. 111,519 million (equivalent to 2.4 percent of sustainable options. The increased investment should also GDP), or Tk. 782 per capita.25 Interventions that aim to install public latrines in schools, bus stations, and increased access to safe, quality water could have led important public places and community latrines in densely 21 In 2009 prices, costs due to extra time used in accessing open defecation sites is Tk. 19.964 billion and accessing shared toilets is Tk. 14.66 billion. 22 In 2009 prices, cost of inadequate sanitation is Tk. 981.3755 million for girls and Tk. 936.054 million for working women, totalling Tk. 1.92 billion. 23 In 2009 prices, low-case estimate is Tk. 202,986.5 million (3.30 percent of 2009 GDP), high-case estimate is Tk. 813,006 million (13.22 percent of 2009 GDP), and base-case estimate is Tk. 339,797.4 million (5.52 percent of 2009 GDP). 24 In 2009 prices, gains is Tk. 143,913 million (2.34 percent of 2009 GDP), or Tk. 1.16 per person. 25 In 2009 prices, gains is Tk. 128,246.85 million (2.08 percent of 2009 GDP), or Tk. 899.2 per person. 26 In 2009 prices, gains is Tk. 127,188.85 million (2.07 percent of 2009 GDP), or Tk. 891.25 per person. 27 In 2009 prices, gains is Tk. 107,083.4 million (1.74 percent of 2009 GDP), or Tk. 750.95 per person. www.wsp.org 13 Economic Impacts of Inadequate Sanitation in Bangladesh populated poor communities without sufficient space Health interventions should be more relevant to for individual household latrines. Also very important is local needs ensuring proper storage, management, and use of surface Health-related losses, specifically mortality and morbidity water and preventing its contamination. due to diarrheal disease, are the single largest contributors to the financial and economic impact of inadequate sanitation. A communication campaign is needed Therefore, to mitigate the ill effects of inadequate sanitation Bangladesh’s progress in sanitation has been largely due to relevant vigorous health interventions are needed. They social action, mobilized by a communications campaign. should address equity, with special emphasis on the rural While there has been an admirable use of a wide variety of poor, particularly the children; marginalized people living communication materials, standardization and uniformity in hard-to-reach areas like haor (wetlands), char (sand have been missing, and the materials have often been used in and silt islands), and urban slums; indigenous people; an ad hoc fashion without a systematic and reinforcing media and people living in areas prone to monga (seasonal plan. Therefore, in order to improve sanitation further, a more famine). Health interventions should be implemented at dynamic communications strategy, including a comprehensive grassroots-level health facilities, such as the Thana health media plan, is needed to mobilize communities. complex, community clinics, satellite clinics, and family welfare centers. Hygiene education strategies are needed There is a need to develop effective and replicable hygiene Complementary strategies should be developed education outreach strategies to promote behavior change. Complementary strategies should be developed for rural In primary schools, children should be educated about sanitation, hygiene, and water. This can be done by safe water, sanitation, and personal hygiene. There is a informing and supporting the choices of individuals using a need to give primary stakeholders the knowledge and the mixture of mass media and interpersonal communication; by means to make informed choices about hygiene practices developing sanitary engineering and safe water engineering and water and sanitation facilities. There is a need to give solutions based on an understanding of good practices primary stakeholders options for safe disposal of excreta. It in hydrogeology and geochemistry; and by bringing is also important to ensure that a functioning institutional management practices into a more supportive institutional framework is in place to support these needs. Moreover, the framework at both national and local levels. issue of total sanitation coverage also demands a conception of sanitation that goes beyond excreta disposal to include the Progress toward MDGs needs to be monitored environmental sanitation issues associated with the hygienic more closely management of solid waste, wastewater, and storm water. There is a need to monitor the progress toward achieving the MDG water and sanitation targets more closely. Monitoring Local government needs to be more proactive should report to the country the following: levels of access to It is absolutely necessary to build the capacity of local safe water and adequate sanitation; how much governments governments and communities to deal more effectively are allocating to water and sanitation; what external support with problems relating to water supply and sanitation. The they are receiving; their capacity to meet the challenge of structure of the local government should be strengthened achieving the targets; and highlights to warn when and by establishing and/or proactivating water and sanitation where progress is lagging behind. committees. This can empower people to take sustained action at a local level with regard to water and sanitation- related problems. 14 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh 1. Introduction BACKGROUND • Goal 4: Reduce the under-five mortality rate by two- Access to safe drinking water and sanitation is considered thirds between 1990 and 2015, and to be a fundamental human right that acts as a safeguard • Goal 7: The proportion of the population without of health and human dignity (OHCHR, United Nations, sustainable access to safe drinking water and basic 2007). Good sanitation and hygiene practices can make sanitation halved by 2015 (United Nations, 2005). major differences in people’s health, education and socioeconomic development. Scientific studies indicate Sanitation is vital for good health and leads to a rise in life that diarrhea cases decline by roughly 36 percent when expectancy. It is a broad concept, one that includes safe households have basic sanitation (Fewtrell et al., 2005). management of human excreta, waste water, storm water, The same review of studies showed that handwashing with solid waste, industrial and agricultural wastes, household soap can reduce the incidence of diarrhea and have impacts refuse, and animal excreta. Sanitation also includes sanitary on pneumonia, respiratory disease, trachoma, scabies, and living conditions, including access to safe drinking water skin and eye infections. Empirical studies have found that and appropriate hygiene practices in households, at schools, this practice can also reduce the incidence of diarrhea by and at workplaces. Due to the lack of data on many of these 44 percent (Fewtrell et al., 2005). aspects of sanitation, this study has focused on only human excreta-related impacts of poor sanitation and hygiene. The progress of two Millennium Development Goals (MDGs) will be accelerated by promoting adequate sanitation, hygiene, A range of diseases occur and spread because of poor and access to safe drinking water: sanitation and hygiene practices. In Bangladesh, fecal-oral Figure 1.1 Disease transmission path through the F-diagram Fluids Fields Fresh/ Feces Food new host Flies Fingers www.wsp.org 15 Economic Impacts of Inadequate Sanitation in Bangladesh transmission routes are one of the main causes of water- Figure 1.1 shows the F-diagram, describing the disease borne diseases. Many people have only a poor understanding transmission pathways due to poor sanitation. of the necessity of avoiding contact with human excreta and, therefore, the requirement for safe disposal. Children Poor sanitation, in sum, causes diseases and leads to and women endure many hazardous situations due to poor medical and other health-related costs. Lack of latrines sanitation. In Bangladesh, ALRI/pneumonia is the main in household causes a further problem for women and cause of death and illness of children, which is indirectly girls, making them vulnerable to harassment and assault, related to poor sanitation via malnutrition. particularly at night. Many girls and working women drop out of school and quit their workplaces due to Diarrhea is the second leading cause of morbidity and the inadequate sanitation facilities (Barkat et al., 2009: fourth leading cause of mortality among children in the 86-92). Access to adequate sanitation and proper hygiene country (Local Government Division, MLGRDC, 2008). practice can increase life expectancy by reducing mortality Bacteria, viruses, and parasites are the most common and morbidity, saving health care costs, increasing worker environmental hazards linked to poor sanitation, and they productivity, increasing school attendance, reducing water cause diarrhea. Children’s ability to digest and absorb food is treatment costs, and more besides. obstructed when infections caused by poor sanitation result in malnutrition. Malnourished children are more likely to A logical framework of economic benefits is shown in get sick and die as a result. Figure 1.2 (Hutton et al., 2008). Figure 1.2 Primary and final impact of improved sanitation options Improvement Primary impact Economic impact Closer latrine access and Less use of public latrines Saved entry fee costs more latrines per capita Improved aesthetics Less open defecation School participation Better living standards Less latrine access time House price rises Improved latrine system Health Related Quality of Life improvement Intangible user benefits Labor productivity Improved health status due to Saved health care costs Improved hygiene less exposure to pathogens Value of saved lives practices treatment Saved water Improved quality of ground Domestic uses of water and surface water Cottage industry income Improved isolation, Tourist revenue Improved quality of land and conveyance, and treatment Foreign direct investment external living area of human excreta Fish production More fertilizer available Agricultural production Improved aesthetics More fuel available Fuel cost savings Reuse of human excreta (cooking, lighting) Education production 16 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh SANITATION AND QUALITY OF LIFE UNICEF, only 39 percent of the population has improved Over the last decade, Bangladesh has emerged as a global sanitation coverage, although this is up from 20 percent in reference point in experimenting and implementing 1990. In Bangladesh, 75 percent of the population lives innovative approaches to rural sanitation. Between October in rural areas, and many communities in hard-to-reach 2003 and June 2008, the percentage of people defecating regions do not have adequate access to sanitation. In such a in the open has dramatically fallen from 77 percent to densely populated country, where a large proportion of the 12 percent. More than 88 percent of the population now land regularly floods, sanitation is a continuing challenge. has access to facilities, mainly through low-cost pit latrines. Despite improvements, large numbers of people remain at A new approach to improving sanitation coverage in rural risk from the lack of safe excreta disposal. areas, the community-led total sanitation concept, was first piloted in Bangladesh and is credited for having contributed Improving rural sanitation is therefore a complicated significantly to this increase in sanitation coverage challenge, one that involves action on several fronts. since 2000. Individuals need to be aware of how their own behavior may damage the environment and what they need to do While there has been a significant movement in Bangladesh to protect their own and the public’s health. Encouraging away from open defecation toward fixed-point defecation, people to defecate in a fixed place and away from water the quality of coverage is the emerging area of concern. sources is the first step. This requires education aimed at According to the Joint Monitoring Program (JMP) for young people as well as information campaigns targeted at water supply and sanitation implemented by WHO and all age groups. Table 1.1 Joint Monitoring Program (JMP) definition of improved and unimproved sanitation and water supply Indicators Improved Unimproved Sanitation  Flush pour-flush to:  Flush pour-flush to elsewhere • Piped sewer system  Pit latrine without slab or open pit • Septic tank  Bucket • Pit latrine  Hanging toilet or latrine  Ventilated improved pit latrine  No facilities or bush or field  Pit latrine with slab  Composite toilet Water supply  Piped water into dwelling, plot, or yard  Unprotected dug well  Public tap/standpipe  Unprotected spring  Tube well/borehole  Cart with small tank/drum  Protected dug well  Tanker truck  Protected spring  Bottled water  Rainwater collection  Surface water (river, dam, lake, pond, stream, canal, irrigation channels) Source: WHO and UNICEF, 2006. www.wsp.org 17 Economic Impacts of Inadequate Sanitation in Bangladesh Hygiene promoters also encourage families to invest in quality The Joint Monitoring Program has treated the year 1990 latrines (that isolate excreta from the human environment) by as a base year for comparing the overall sanitation situation explaining that money can be saved on diarrhea medication within and across countries. According to the program’s and by enabling working adults to have fewer sick days. sanitation coverage data for 1990, 49 percent of the They further emphasize the social benefits of improved world’s population then had access to improved sanitation; sanitation, including greater privacy and fewer offensive by 2004 this had increased to 59 percent. Undoubtedly odors. Since sanitation is a public matter, communities need this progress is not enough to reach the MDG by 2015. to be empowered to decide what they need and to act on Table 1.2 shows the official sanitation coverage data of those decisions. At the same time, local government needs developing regions for base year 1990 and the most recent to have the capacity to plan and implement building and coverage data (2004). engineering projects that will develop solutions to public health problems, such as the control of pollution and the According to the Joint Monitoring Program, in 2004 only safe disposal of excreta. 38 percent of people in South Asia had access to improved sanitation and the remaining 62 percent did not. During OVERVIEW OF THE CURRENT STATUS the 1990-2004 period, therefore, only an 18 percentage- OF SANITATION point increase in sanitation coverage was achieved. Among The global population continues to grow, and natural the South Asian countries, by 2004 Sri Lanka (91 percent) resources such as freshwater and nutrients are becoming and Bhutan (70 percent) had shown much success in more and more limited. As a result, ensuring adequate achieving sanitation coverage, and more than 50 percent of sanitation and hygiene practices for all has become an the population in the Maldives and Pakistan had access to especially important goal. WHO and UNICEF’s Joint improved sanitation. Sanitation coverage in the rest of the Monitoring Program (JMP) has defined improved and countries in South Asia remains very poor, as more than unimproved sanitation and water supply to measure the 60 percent of the population in those countries remains MDG indicators, as spelled out in Table 1.1. without access to improved sanitation (Figure 1.3). Table 1.2 Improved sanitation coverage statistics for Bangladesh, Asia, Africa, and Latin America (by region) (in percentage of population), 1990 and 2004 Rural (percent) Urban (percent) Total (percent) 1990 2004 1990 2004 1990 2004 South asia 8 27 54 63 20 38 East Asia 7 28 64 69 24 45 West Asia 55 59 97 96 81 84 Southeast Asia 40 56 70 81 49 67 Oceania 46 43 80 81 54 53 Latin America & Caribbean 36 49 81 86 68 77 North Africa 47 62 84 91 65 77 Sub-Saharan Africa 24 28 52 53 32 37 CIS 63 67 92 92 82 83 Bangladesh 12 35 55 51 20 39 Source: http://www.wssinfo.org. 18 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 1.3 The sanitation situation in Bangladesh in 2006: Percent of population with access to each type of sanitation, by rural and urban residence Bangladesh Rural Urban National Improved sanitation Flush to piped sewer system 0.2 9.4 2.9 Flush to septic tank 7.2 28.3 13.2 Flush to pit (latrine) 5.8 6.6 6 Pit latrine with slab 18.7 13.4 17.1 Subtotal 31.9 57.7 39.2 Unimproved sanitation Pit latrine without slab/open pit 38.6 22.4 33.9 Hanging toilet/hanging latrine 19.7 14.5 18.2 No facility or bush or field 9.2 2.6 7.5 Other 0.6 2.8 1.2 Subtotal 68.1 42.3 60.8 Source: Bureau of Statistics, 2007. Note: The definition of improved sanitation used by the 2006 Multiple Indicator Cluster Survey (MICS) is different from that used by the Joint Monitoring Program (WHO and UNICEF, 2006). Detailed and updated conditions of Bangladesh in the year and handwashing promotion for nine months reported 2006 are shown in Table 1.3. 53 percent less diarrhea than households in the control group. Table 1.4 shows the reported hygiene practice in In addition to improved sanitation, proper hygiene practice Bangladesh in 2006. As reported, 50.4 percent of rural is also important, since a significant relationship has been people and almost 80 percent of urban people washed their Figure 1.3: Improved sanitation coverage statistics for South Asia found between improper hygiene practice and disease hands with water and soap after defecation; according to in 100 countries, 1990 and 2004 transmission. A study by Luby et al. (2009) indicated that Karachi, Pakistan, households that received free soap 9 the same survey, 1.3 percent of children under age five used a latrine and 21.1 percent flushed children’s feces into a 80 70 69 59 Figure 1.3 Improved sanitation coverage statistics for South Asian countries, 1990 and 2004 59 60 100 34 39 33 91 35 37 40 80 20 70 14 69 20 59 59 11 3 60 39 35 37 38 40 34 33 0 20 14 20 20 11 3 0 Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka South Asia 1990 2004 Source: http://www.wssinfo.org/ 1990 2004 Note: The data for Bhutan and Maldives for the year 1990 are not available. www.wsp.org 19 Economic Impacts of Inadequate Sanitation in Bangladesh Table 1.4 Personal hygiene practices in Bangladesh, 2006: Percent of population, by rural and urban residence Indicators Rural Urban National Handwashing after defecation Only water 6.2 3.0 5.5 Water and soil 25.9 10.3 21.3 Water and ash 17.4 7.1 14.4 Water and soap 50.4 79.5 58.8 Others 0.1 0.1 0.1 Total 100 100 100 Disposal of child’s feces Child used toilet/latrine 0.8 2.9 1.3 Put/rinsed into toilet or latrine 14.1 41 21.1 Put/rinsed into drain or ditch 22.5 21.5 22.1 Thrown into garbage (solid waste) 12.3 8.4 11.2 Left in open 41.8 20.4 36.2 Others 8.6 5.9 8 Total 100 100 100 Source: Bureau of Statistics, 2007. latrine. Almost 42 percent of rural people and 20.4 percent observed, study subjects washed their hands 11,800 times of urban people left children’s feces in the open. (55 percent of the time), though in only 350 episodes (1.7 percent) did they wash both hands with soap or ash Here, it is worth noting that the reality of handwashing (ICDDR’B, 2008). practice in Bangladesh is far worse than the reported one. There exists a huge gap between what is reported and RATIONALE OF THE STUDY what is observed. A baseline survey of hygiene practice Bangladesh has made inadequate progress toward the conducted by ICDDR’B shows the difference between sanitation-related MDG target. The country’s financial respondents’ reported behavior and observed behavior. The commitment and political priority for sanitation also has primary objective of the baseline survey was to promote shown inadequate progress (WaterAid, 2008). Therefore, handwashing with soap or ash at key times—before to mitigate the adverse effects of poor sanitation and preparing food, before eating or feeding a child, after hygiene practices, intervention is necessary. The aim of this defecating, and after cleaning an infant who has defecated. study is to provide concrete evidence of the impact poor In 100 randomly selected communities in 34 districts of sanitation has on the population and the environment Bangladesh, field workers observed the proportion of persons and, consequently, on the economy. This study provides who washed their hands, and two months later returned estimates of the current and long-term effects of poor to the same communities and interviewed residents about sanitation, which cover not only the negative impacts of their handwashing behavior. Among the 20,546 key times poor sanitation but also the potential gains that different 20 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh sanitation interventions could achieve. Policy makers and and urban field settings, to enable decision makers— water and sanitation advocacy organizations are the target government, donors, NGOs, and households—to choose audience of this study. efficient sanitation solutions that maximize the return on investment. The World Bank’s Water and Sanitation Program (WSP) has developed a research program to understand the economic The ESI program started in the WSP East Asia and Pacific costs and benefits of sanitation, under the Economics region in 2007 and studied five countries: Cambodia, of Sanitation Initiative (ESI). This study consists of two Vietnam, Lao PDR, Indonesia, and the Philippines. phases: first, a sanitation impact study is conducted, and Phase 1 studies were published in 2008 along with a this is followed by a sanitation options study. The first study synthesis report. Phase 2 studies from these countries as is a situation analysis, assessing the national economic well as the Yunnan Province of China were published in and financial impacts of inadequate sanitation and the 2010. During 2009, the ESI was extended to the WSP potential gains from improving sanitation. Its primary aim South Asia Region. This portion of the ESI impact study is to mobilize the different players inside and outside the is currently active in India, Bangladesh, and Pakistan. The sanitation sub-sector to act to change the situation. The ESI study in Bangladesh is being conducted in two phases, second study will examine the costs and benefits of specific like the preceding studies. This report is the culmination of sanitation technologies and programs in a number of rural Phase 1. The options study will be conducted in Phase 2. www.wsp.org 21 Economic Impacts of Inadequate Sanitation in Bangladesh 2.   Methodology INTRODUCTION The impacts evaluated in this study include health impacts, Poor progress in the sanitation sector has serious economic water-related impacts, sanitation access time, and time implications. Lack of improved sanitation causes diseases, loss from school and work. The potential gains in each of which in addition to illness and death result in economic these impact areas are also estimated based on projected loss, lost work time, and a loss of dignity. The aim of this improvements in sanitation. Health impact includes the study is to identify the economic impacts to be evaluated and mortality and morbidity burden of diseases, water impact describe the methodology for expressing these impacts in covers the cost of accessing and treating drinking water monetary value. Both monetary (financial) and nonmonetary and water for other domestic uses, sanitation access time costs have been accounted for in order to paint a complete includes the extra time needed when adequate private picture of the economic losses due to poor sanitation. facilities are not nearby, and time loss from school and workplace, especially for females, includes time lost due to This study distinguishes between financial costs and absence when sanitation in schools and workplaces is poor nonfinancial costs. Financial costs include treatment costs or unavailable. for disease episodes, fuel consumption costs for boiling drinking water, and tariffs for piped water, among other SCOPE OF THE STUDY costs that are most easily expressed in financial units. Other, Scope of sanitation nonfinancial costs can be measured when they involve a This study has included only the impacts of poor sanitation resource use—such as the time spent taking care of patients, and hygiene related to human excreta. Due to lack of data, fetching water, or using unimproved latrines—but these this study has excluded impacts due to the release of other can nevertheless also be expressed in financial units using solid waste and animal excreta into the environment. Aspects shadow prices, that is, prices that approximate the economic of sanitation included in the present study are listed in losses by taking values from observed markets. Table 2.1 Table 2.1 Aspects of sanitation included and excluded in the present sanitation impact study Included Excluded Release/disposal of human excreta into environment Solid waste Hygiene practices associated with sanitation Animal excreta Drainage and general flood control measures Industrial effluents, toxic waste, and medical waste Air pollution unrelated to human excreta Vector control Broader food safety Broader environmental sanitation 22 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Scope of impacts under consideration Census This impact study estimates the costs of poor sanitation Data from Bangladesh’s Population Census 2001 have been in the areas of health, drinking water, domestic water, used for projected population totals, growth rates, age and and user preference and welfare. Due to lack of data, sex population counts, and proportions to arrive at estimates the study excludes the impact of poor sanitation on for 2007. fishing and fishery production, agricultural use of water, surrounding environment, tourism, foreign investment, and Statistical Year Book 2007 economic growth. Statistical Year Book 2007 is an annual publication of the Bangladesh Bureau of Statistics that provides statistical data MAIN SOURCES OF DATA and information on all sectors of the national economy. This study treats 2007 as a valuation year to estimate the Population and household information from the publication economic and financial impacts of poor sanitation. When are used in this report. data or ratios were not available for the year 2007, preceding Report on Labor Force Survey 2005-06 or succeding year data or ratios were applied to get estimates The Bangladesh Bureau of Statistics also publishes the for 2007. When data at the national or subnational levels were Report on Labor Force Survey at intervals of four to five years. lacking, the study used data from countries at similar levels It includes data on the size and composition of the labor of economic development, making reasonable assumptions force by gender, major occupation by industry, employment and considering expert opinion to arrive at 2007 estimates. status by gender, youth labor force, child labor, and so on. Note that this means that throughout this report, the latest This study uses the labor force and unemployment-related survey numbers, costs, and estimations derive from or refer data from the 2005-06 labor force survey report. to the year 2007. 2007 Demographic and Health Survey The major data sources, explained further below, were: The Bangladesh Demographic and Health Survey (BDHS) is part of a worldwide Demographic and Health Surveys • Bangladesh Demographic and Health Survey 2007 program, which is designed to collect data on fertility, family (BDHS, 2007), produced by the Ministry of Health planning, and maternal and child health including mortality, and Family Welfare’s National Institute of Population morbidity and nutrition. This study uses information from Research and Training (NIPORT), with Mitra and the BDHS survey, specifically from its ‘Child Health’ and Associates, and Macro International ‘Nutrition of Children and Women’ modules, for data on • Health Bulletin data (2007), Ministry of Health and diarrheal prevalence, the prevalence and treatment of ARLI, Family Welfare and the nutrition status of children. Most of the relevant • World Health Organization’s Global Burden of morbidity statistics have been obtained from BDHS. Disease data (2004) Information regarding the use and treatment of drinking • Household Income & Expenditure Survey water and nondrinking water and on the use of cooking fuel data (2005) by households has been obtained from BDHS. Residence- and age-specific data on open defecation and use of shared • Sample Vital Registration System data (2007) latrines have also been obtained from BDHS. • Multiple Indicator Cluster Survey (MICS) data (2006) Health Bulletin (2008) Health Bulletin 2008 provides statistical information on • Population Census data (2001) (extrapolated different health programs, hospital services, academic population data for 2007 by Bangladesh Bureau and public health institutions, and the health workforce of Statistics) mainly under the Directorate General of Health Services • Labor Force Survey (2005-06) of the Ministry of Health and Family Welfare. Age-specific • Statistical Year Book (2007) morbidity statistics for some diseases (e.g, helminthes) have been collected from this bulletin. www.wsp.org 23 Economic Impacts of Inadequate Sanitation in Bangladesh Report of the Household Income and Expenditure (GOB-UNICEF) Project, by Abul Barkat, G. Survey 2005 Mahiyuddin, M. Majid, M. B. Rahman, A. Osman, The Household Income and Expenditure Survey conducted M. Hoque, S. Khan, and M. Rahman (2010), and by the Bangladesh Bureau of Statistics is the main data • ‘Provisioning of Arsenic-Free Water in Bangladesh: source for estimating household income, expenditure, A Human Rights Challenge’ by Abul Barkat and consumption, and the poverty status of the country. A. Hussam (2008). This study uses data from the survey, including data on medical expenditure. ESTIMATION OF COSTS As stated earlier, this study attempts to estimate the Multiple Indicator Cluster Survey (MICS), 2006 nonmonetary, financial, and economic costs of poor MICS is an international household survey initiated sanitation in the areas of health, drinking water and by UNICEF. The Bangladesh MICS survey results are domestic water, and user preference and welfare. Table 2.3 published in a document titled, ‘Progotir Pathey’ (Road illustrates examples of these two types of costs as they affect to Progress). MICS provides valuable information on the health, water, and user preference. The two types of cost are situation of children and women in Bangladesh. Data on distinguished from one another as follows. improved water sources, household water treatment, and time required to reach water sources have been collected Financial costs from the MICS survey report. Financial costs refer to direct financial expenses paid in financial terms by someone, such as changes in Government of Bangladesh (various ministries) household or government spending and real income losses Information on economic variables has been collected from for households. publications of the Ministry of Health and Family Welfare, Ministry of Water Resources, and Ministry of Education. Nonmonetary costs Nonmonetary costs consist of both longer-term financial International data sources impacts, such as having fewer or less educated children and This study has also used international data sources to arrive losing working people due to premature death or relevant at estimations. Relevant data have been obtained from these morbidity, and nonfinancial impacts. Nonfinancial impacts organizations, databases, and documents: World Health include intangible costs such as: Statistics; WHO’s Global Burden of Disease; WHOSIS • the value of loss of life (the WHO database); World Development Indicators; • time use by adults and children UN–Water; UNICEF–Water, Sanitation, and Hygiene; • patient time lost due to illness WaterAid–Bangladesh; and the International Centre for • time spent accompanying patients to seek Diarrheal Disease Research–Bangladesh (ICDDR, B). health care • time spent caring for ill persons Other sources • time spent collecting fuel to treat water, storing This study has made maximum use of all available relevant treated water, and fetching safe water data sources. It reviewed international, regional and local • time spent using unimproved latrines, and studies, reports, and other relevant materials to make final • days absent from school and work. estimations. Among other relevant research studies, the most important ones include: In most cases, financial values have been assigned to such nonmonetary impacts. In these cases this study tries to • Advancing Sustainable Environmental Health (ASEH): describe the nonmonetary impacts using available evidence. Impact Study, by Abul Barkat, G. Mahiyuddin, In some cases, due to lack of proper evidence and data, it was A. Poddar, R. Ara, M. Rahman, M. Badiuzzaman, not possible to assign financial values to certain nonmonetary S. Khan, and A. Osman (2009) impacts; for example, it was not possible to do so for loss of • Baseline Survey: Urban Component of SHEWA-B dignity and lack of comfort due to open defecation. 24 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.2 Financial costs and nonmonetary costs of poor sanitation Impact categories Sub-impacts Financial costs Nonmonetary costs Health Premature death Present value of future income - Treatment cost Doctor’s fee, medicine, transport, Time spent for accompanying patient to and diagnostic test cost seek health care Productivity cost - l Patient time loss because of illness l Time spent taking care of ill person Water Treatment cost Fuel consumption cost Time for collecting fuel and storing treated water Piped water cost Tariff for piped water - Fetching cost - Time for fetching safe water User preference Cost for using unimproved latrine - Time for using unimproved latrine Loss of days absent from school - Cost for absent days from school Loss of days absent from work - Cost for absent days from work HEALTH-RELATED COSTS pathways (infected surface of a latrine, water or other fluids, person-to-person, flies, soil) as well as intermediary Premature deaths pathways (such as food). Poor sanitation and hygiene practices lead to a range of disease conditions that have both direct and indirect This study estimates death from diarrheal disease and from economic effects. Some diseases are directly related to helminthes infection as direct effects due to poor sanitation poor water and sanitation and some are indirectly related. for all age groups (Table 2.4). The indirect health impacts of Diarrhea, schistosomiasis, trachoma, and typhoid are poor sanitation—especially diarrhea-induced malnutrition directly related to water and sanitition. Diarrhea causes among children under age five—has been estimated for malnutrition, and malnutrition leads to other diseases like ALRI, malaria, measles, and other diseases. Due to lack of ALRI, malaria, measles, and jaundice. These diseases, as adequate data, only these diseases are considered as impact depicted in Figure 1.1, can be transmitted following direct of poor sanitation in this study. Table 2.3 Diseases attributable to poor sanitation included in this study Diseases included Attributable by poor sanitation Age group accounted for Diarrhea Partially attributed All ages Helminthes Fully attributed All ages ALRI Partially attributed via malnutrition Children below age 5 Malaria Partially attributed via malnutrition Children below age 5 Measles Partially attributed via malnutrition Children below age 5 www.wsp.org 25 Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.4 Disease-specific deaths by age group Disease type Ages 0-4 Ages Ages 15+ Total 5-14 Diarrheal disease 49,007 137 6,153 55,297 ALRI 34,874 8,275 65,921 109,070 Helminthes 49 259 20 328 Skin diseases 47 24 704 775 Measles 14,166 1,166 0 15,332 Malaria 516 447 808 1,771 Malnutrition 1,131 1,969 1,066 4,166 Premature births and low birth weight (LBW) 40,576 0 0 40,576 Other perinatal conditions 57,903 0 0 57,903 Other causes 48,926 30,221 757,295 836,442 Total 247,195 42,498 831,967 1,121,660 Data source: Author’s estimations using 2004 age-specific death rates from WHO (2008) applied to age-specific populations of Bangladesh for 2007. Cause-specific deaths by age group for 2007 have been regards deaths from ALRI, malaria, measles, and other causes estimated using regional and country data from the World among children under age five due to malnutrition induced Health Organization’s 2004 Global Burden of Disease study by diarrhea as indirectly caused by poor sanitation. (WHO, 2008). Proportions used in that study have been applied to age-specific populations in Bangladesh in 2007. Underweight, stunting, and wasting are the three most commonly used indicators to measure malnutrition (and Death from diarrheal diseases and helminthes are directly indirectly, poor sanitation) among children. This study related to poor sanitation and poor hygiene practice. Poor uses the underweight approach to measure the risk of sanitation accounts for 88 percent of diarrheal deaths and mortality due to poor sanitation. Underweight is measured 100 percent of deaths from helminthes (Haller, Hutton, and as weight-for-age compared to an international reference Bartram, 2007). Indirect deaths related to poor sanitation population and indicates a deficit in body weight compared also result from the malnutrition induced by diarrhea and to the expected weight for the same age. For measuring helminthes, which are the major causes of malnutrition. underweight according to the weight-for-age-Z score (WAZ), This is because people with diarrheal disease or helminthes the following formula has been used: infection are unable to fully absorb nutrients from the food they consume. Malnourished people face a higher risk of WAZ = observed weight - median weight of reference population for a given age standard deviation of reference population infectious disease and are less capable of recovering from it. The Economics of Sanitation Initiative study therefore The results of the WAZ score are classified as follows: WAZ score Degree of underweight WA < -3SD Severe underweight WA -2 to -3SD Moderate underweight WA -1 to -2 SD Mild underweight WA > -1 SD Non-underweight 26 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh For Bangladesh, current underweight prevalence rates have underweight prevalence rate (the underweight measurement been measured using data from the Bangladesh 2007 Health we would expect in the absence of diarrheal infection), the and Demographic Survey (Ministry of Health and Family following formula has been used: Welfare, 2007, pp. 147-8) and are displayed here in Table New WAZ = Observed WAZ * (1–0.35) 2.5. Studies conducted in various countries have found that diarrheal disease causes a deficit of 20 to 50 percent Empirical studies report various effects of malnutrition in children’s weight (Hutton, et al., 2008; Larsen, 2008; among children. Fishman et al., (2004) discuss the cause- Prüss-Üstün, et al., 2004; Becker, Black, and Brown, 1991; specific and all cause-relative risks of mortality among Black, Brown, and Becker, 1984; Whitehead, Rowland, and malnourished children under age five, both globally and by Cole, 1976). A midpoint of 35 percent of a child’s expected region. Their study reveals that these young children with weight is therefore assumed as the deficit due to diarrheal severe underweight are at high risk of mortality compared disease for this study. To estimate the counter-factual rate of to non-underweight children (Table 2.6). Table 2.5 Current and counterfactual rates of underweight prevalence Prevalence rate Percent Current prevalence rates Severe underweight ( < -3 SD) 11.78 Moderate underweight ( -2 to -3 SD) 29.50 Mild underweight ( -1 to -2 SD)* 35.22 Non-underweight ( > -1 SD)* 23.93 Counterfactual prevalence rates Severe underweight ( < -3 SD) 0.49 Moderate underweight ( -2 to -3 SD) 9.93 Mild underweight ( -1 to -2 SD) 48.07 Non-underweight ( > -1 SD) 41.51 Data source: Author’s secondary analysis of 2007 BDHS, based on WHO Child Growth Standards adopted in 2006. Table 2.6 Relative risk of mortality by degree of underweight for children under age five Degree of underweight ALRI Measles Malaria All causes excluding perinatal Severe underweight (WA < -3 SD) 8.09 5.22 9.49 8.72 Moderate underweight (WA -2 to -3 SD) 4.03 3.01 4.48 4.24 Mild underweight (WA -1 to -2 SD) 2.01 1.73 2.12 2.06 Non-underweight (WA > -1 SD) 1 1 1 1 Source: Fishman et al., 2004. Note: In relative risk measures, a value of 2.0 indicates risk being twice as high as normal, 4.0 indicates four times as high, and so on. www.wsp.org 27 Economic Impacts of Inadequate Sanitation in Bangladesh To estimate the indirect death, the attributable fraction was Total mortality causes by diarrhea-induced calculated for cause-specific deaths and other causes due to malnutrition due to poor sanitation has been malnutrition induced by diarrhea. Current and counter- calculated using the following formula: factual prevalence rates and relative risk of mortality are used to estimate the attributable fraction (AF). The formula is as follows: where, where, SAF is the fraction attributable to RRi is relative risk of mortality or morbidity for sanitation (88%), each of the weight-for-age categories, AFj is the fraction attributable to Pi is the current underweight prevalence rate in malnutrition for the particular disease, each of the weight-for-age categories, and Djo is the total number of annual cases Pic is the counter-factual underweight prevalence for the particular disease, and rate in each of the weight-for-age categories. D is the total mortality (indirect) due to Using this formula, the attributable fraction for ALRI, poor sanitation. malaria, measles, and other causes has been estimated. Other causes were calculated by excluding diarrhea, malaria, Table 2.8 shows the results of these calculations. measles, and all perinatal causes (including prematurity and Note that indirect deaths via malnutrition low birth weight) from all causes of death (Table 2.7). have been estimated only for children under age five due to lack of available As 88 percent of deaths from diarrheal diseases are attributable information for the other age groups. to poor sanitation, so 88 percent of deaths from ALRI, malaria, measles, and other causes due to malnutrition are In 2007, 202,140 children under age five died also attributed to poor sanitation. in Bangladesh, and by these estimates almost 32 percent of this mortality was attributable to poor sanitation. Slightly more than half of this latter Table 2.7 Attributable fraction for malnutrition, selected diseases   ALRI Measles Malaria Other Attributable fraction 36.12% 20.20% 38.53% 37.28% Source: Author’s estimates. 28 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.8 Total annual deaths due to inadequate sanitation, by disease and age group Cause of death Children under age 5 Children ages 5-14 Persons ages 15+ All persons Diarrhea (direct) 43,126 121 5,415 48,661 ALRI 12,597 12,597 Measles 4,137 4,137 Malaria 199 199 Other causes* 18,647 18,647 Helminthes (direct) 49 259 20 328 Total mortality 78,755 380 5,435 84,569 Mortality directly attributable to poor sanitation 43,175 380 5,435 48,989 Mortality attributable to poor sanitation 35,580 35,580 via malnutrition Source: Author’s estimates. *Excluding diarrhea, malaria, ALRI, measles, intestinal helminthes, and all perinatal causes. number (17.5 percent of all under-five deaths) is directly measured for a given program. To accomplish this, many attributable to poor sanitation, and slightly less than half economic techniques have been developed and used in (14.4 percent) was due to malnutrition caused in turn by different situations. poor sanitation (Table 2.9). This study uses two economic approaches for valuation of Estimating the cost of premature death premature death to explain the losses due to poor sanitation. It is difficult to attach an economic value to any premature They are the Value of a Statistical Life (VOSL) approach and death. However, it is important for policy makers to know the Human Capital Approach (HCA), and each measures the economic value of the reduced probability of premature loss of life from a different angle. VOSL measures the deaths. Before implementing any sanitation- and hygiene- change in probability of death using people’s perception related program, one should measure cost-effectiveness. or willingness-to-pay for the reduction in the possibilities By placing an economic value on death, the effectiveness of risk of death. HCA calculates the potential productivity of reducing the probability of premature death can be losses due to premature death. Table 2.9 Total death rates among children under age five Total mortality, children under age 5 247,195 Attributable to malnutrition (from poor sanitation) 14.4% Directly attributable to poor sanitation (diarrhea + helminthes) 17.5% Total attributable to poor sanitation (diarrhea + helminthes + malnutrition) 31.9% Source: Author’s estimates. www.wsp.org 29 Economic Impacts of Inadequate Sanitation in Bangladesh The Value of Statistical Life approach. VOSL estimates The Human Capital Approach. HCA captures the the average willingness-to-pay for reducing the risk of death present value of expected future income lost due to for a population. The following formula has been used in premature death, accounting for the economic loss in this study to calculate VOSL: productive years. This study accounts for the present value of future income using the unemployment-adjusted labor VOSL_B = (VOSL_ OECD * (GDP_B/ GDP_OECD) ^ share of gross domestic product (GDP) per worker for the IE_VOSL)) * ER year 2007. To calculate this, the labor share is adjusted by the unemployment rate at the rural and urban level. Where, The resulting adjusted labor share of GDP per worker is VOSL_B = VOSL in Bangladesh Tk. 59,422.28 The corresponding values for workers in rural and urban areas are Tk. 46,186 and Tk. 104,079, VOSL_ OECD = VOSL in OECD respectively, amounts that are used to estimate the present value of future income.29 To estimate the present value, the GDP_B = GDP per capita in following information is used: Bangladesh • GDP per capita real annual growth rate = 2% GDP_OECD = GDP per capita in OECD • Annual discount rate = 3% IE_VOSL = Income elasticity of VOSL • Working life start age = 15 years • Working life end age = 65 years ER = Exchange rate Tk./$ • A midpoint of 2 years in the age category 0-4 years is used for the present-value estimation Previous studies from other countries have calculated VOSL and several reviews summarize the findings. A VOSL study • A midpoint of 35 years is used for the by Bellavance, Dionne, and Lebeau (2009) found that after present-value estimation for the population 1996, the lowest VOSL figure among OECD countries was over age 5 $2.35 million, which is considered the lowest estimate for • Growth and discount rates are the same as for calculating VOSL. From the same meta-analysis based on children under age 5 VOSL studies, the co-authors calculated a median VOSL • Unemployment rate = 4.3% value of $6.59 million, which is used as the high-VOSL The present value of future income for the two age groups is case. A meta-analysis of VOSL studies by Viscusi and Aldy calculated as follows: (2003) calculates the median VOSL to be $3.7 million, a • For children under age 5: Tk. 2,362,674 value that is used by regulatory agencies in the United States. This last value is used as the base-case for VOSL estimation. • For persons over age 5: Tk. 1,553,02030 To transfer the VOSL values to Bangladesh, the present Under the HCA approach, this study uses the unemployment- study uses a range of income elasticities from 0.6 to 0.8 adjusted labor share of GDP per worker as the base-case for to 1, the same range that is used in the companion World estimating value of premature death. Table 2.10 shows the Bank report, Economic Impacts of Inadequate Sanitation in estimates using both the HCA and VOSL approaches, and India (World Bank, 2011). Table 2.12 provides the results of sensitivity analysis. 28 In 2009 prices, the UALS of GDP per worker is Tk. 68,335.3. 29 In 2009 prices, corresponding values for rural and urban areas are Tk. 46,186 and Tk. 104,079. 30 In 2009 prices, <5 years = Tk. 2,717,075.1; >5 years = Tk. 1,785,973. 30 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.10 Economic cost of a premature death using the HCA and VOSL approaches GDP/Person UALS of GDP/Worker GDP/Worker HCA approach Low Base High Ages 0 to 4 Tk. 1,336,250 Tk. 2,362,674 Tk. 3,798,175 Ages 5+ Tk. 878,337 Tk. 1,553,020 Tk. 2,496,597 VOSL approach: Benefit transfer with official Low Base High exchange rate VOSL in OECD countries $2,353,931 $3,700,000 $6,599,247 Income elasticity = 0.6 Tk. 12,993,630 Tk. 20,423,891 Tk. 36,427,649 Income elasticity = 0.8 Tk. 5,571,987 Tk. 8,758,265 Tk. 15,621,068 Income elasticity = 1.0 Tk. 2,389,404 Tk. 3,755,758 Tk. 6,698,696 VOSL Approach: Benefit transfer with PPP adjustment Income elasticity = 0.6 Tk. 21,276,574 Tk. 33,443,344 Tk. 59,648,889 Income elasticity = 0.8 Tk. 10,754,041 Tk. 16,903,618 Tk. 30,148,960 Income elasticity = 1.0 Tk. 5,435,527 Tk. 8,543,772 Tk. 15,238,503 Exchange rate (Tk./$) 70 70 70 Source: Author’s estimate. Notes: UALS = Unemployment-adjusted labor share; PPP = purchasing power parity. Table 2.11 Population age distribution, 2008 Total population Children under age 5 Persons ages 5 to 14 Persons over age 15 Total 142,600,000 15,584,184 34,187,780 92,828,037 Rural 105,524,000 11,913,660 25,927,247 67,683,094 Urban 37,076,000 3,670,524 8,260,532 25,144,943 Source: Bureau of Statistics, 2009. Morbidity burden of disease cases costs related to diarrheal disease as a direct impact of poor Poor sanitation and poor access to safe water cause serious sanitation among the whole population. health hazards. According to the World Health Organization (2002), lack of adequate sanitation, lack of hygiene, and lack The age distribution of the population was estimated based of supply of safe water are the most significant risk factors on Gender Statistics of Bangladesh 2008 (Bureau of Statistics, for poor health in developing countries. 2009), the data from which was applied to estimate the total number of illness episodes. The national data on diarrheal Diarrheal disease. The World Health Organization (2004) disease prevalence available from the 2007 Bangladesh also reports that diarrheal diseases occur mainly because of Demographic and Health Survey are limited to children poor sanitation and unsafe water. This study estimates the under age five (NIPORT, Mitra and Associates, and Macro www.wsp.org 31 Economic Impacts of Inadequate Sanitation in Bangladesh International, 2007). The survey collected information on Helminthes infection. Helminthes infections cause the incidence of diarrhea among these children during the malnutrition, anemia, growth reduction, and poor two weeks prior to the survey contact. To annualize this health, especially among children. Reported cases for prevalence rate, the survey figure is multiplied here by a helminthes infection are available from Health Bulletin factor of 52/2.5. 2008 (Directorate General of Health Services, 2008a). It is assumed that all the reported cases are those that were This yields an annual diarrhea prevalence rate for the under- treated, since these data were collected from hospitals and five population in 2007 of 9.9 percent for those living in out-patient facilities. rural areas and 10.2 percent for those in urban areas. The nationwide proportions of helminthes infection for Data on diarrheal disease prevalence in Bangladesh are different age groups have been applied the same way to not available for the population above age five. In India, both rural and urban populations, since residence-based the prevalence rate for that age grouping is assumed to be data are not available (Table 2.13). Since helminthes one-fourth the prevalence rate of children under five. This infection is often a hidden disease, its actual prevalence relative prevalence rate is also used in the present study for rates are expected to be significantly higher than these the over-five population. It is assumed according to the rates. However, since the uncounted cases are those that go previous research that 88 percent of all diarrheal disease cases largely untreated, there is no direct medical cost associated are attributable to poor sanitation. Thus, the total diarrheal —only costs via indirect routes. cases attributable to poor sanitation have been estimated and shown in Table 2.12. Table 2.12 Annual diarrheal disease cases, by age group Children under age 5 Persons over age 5 Total Total 28,005,457 57,143,082 85,148,539 Rural 21,152,560 41,551,009 62,703,569 Urban 6,852,898 15,592,073 22,444,970 Source: Author’s estimates. Table 2.13 Percentage of persons treated for helminthes during the year (percent) Children under age 5 Persons ages 5 to 14 Persons over age 15 Total 7 9.9 9.5 Rural 7 9.9 9.5 Urban 7 9.9 9.5 Source: Directorate General of Health Services, 2008a. 32 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.14 Relative risk of illness by degree of underweight Degree of underweight Diarrhea ALRI Malaria Moderate and severe underweight (WA< -2 SD) 1.23 1.86 1.31 Non-underweight and mild underweight (WA> -2 SD) 1 1 1 Source: Fishman et al., 2004. Table 2.15 ALRI prevalence rate (percent) for children under five Total Rural Urban Any ALRI occurrence in preceding 2 weeks 12.96 13.9 9.9 Source: Ministry of Health and Family Welfare, 2007. The study cited earlier by Fishman et al. (2004) found that Year Book 2008, published by the Directorate General of the relative risk of illness is higher among malnourished Health Services, reported that the incidence rate of malaria is children under age five than among others. Specifically, it 0.68 per 1,000 population for all ages (Directorate General found that the risk of suffering from ALRI is 1.86 times of Health Services, 2008b). No specific data are available higher for children under five whose WAZ scores are less for children under age five; therefore, this all-ages incidence than -2SD (those moderately and severely underweight) rate is used to estimate malaria cases among children under (Table 2.14). five. The attributable fractions for ALRI and malaria due to malnutrition have been estimated by applying the relative risk ALRI and malaria cases are indirectly related to poor of illness and the observed and counter-factual prevalence sanitation through malnutrition induced by diarrhea that is rates to the attributable fraction formula described earlier in turn attributable to poor sanitation. This study estimates (Table 2.16). the cost of illness from ALRI and malaria attributable to poor sanitation. The data available for ALRI cases are from Among the cases of ALRI and malaria due to malnutrition the 2007 BDHS (Ministry of Health and Family Welfare, induced by diarrhea, 88 percent are caused by poor 2007, p. 142) (Table 2.15). sanitation. Table 2.18 provides the number of cases of ALRI and malaria attributable to poor sanitation. The survey reported the prevalence rate of ALRI cases occurring during the two weeks prior to survey contact so, once again, this study multiplies that rate by 52/2.5 to obtain an estimated annual rate. Table 2.16 Attributable fraction for malnutrition, ALRI, and malaria ALRI Malaria   Rural Urban Total Attributable fraction (malnutrition) 20.2% 16.7% 8.5% Source: Author’s estimates. www.wsp.org 33 Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.17 Annual ALRI and malaria cases attributable to poor sanitation, children under five ALRI Malaria Total 7,227,421 721 Rural 6,118,265 Urban 1,109,156 Source: Author’s estimates. Estimation of cost of illness episode The cost of treating diarrhea is estimated for the whole population. Data on the percentages of treated cases and type Treatment cost of treatment data are only available for children under age This study estimates the treatment cost due to illness from five from the 2007 BDHS (NIPORT, Mitra and Associates, diarrhea, ALRI, malaria, and helminthes infection. Since the and Macro International, 2007). This estimate assumes that data needed to distinguish among illness episodes of differing the treatment ratio for both the above-five and the below- severity are lacking, it is assumed here that all the illness cases five populations is 75 percent. The proportion of treatment are—on average—moderate cases. This estimation includes types (whether treated at a medical facility, a pharmacy, or the cost of treatment at medical facilities, at pharmacies, and by traditional health care) for treated diarrheal cases is also by traditional health care. However, not all relevant data assumed to be the same for the above-five and below-five related to cost estimation are available, so expert opinions populations, and is shown in Table 2.18. The proportion of and assumptions are also used to estimate the total cost of treatment types for ALRI is shown in Table 2.20. treatment. Table 2.18 Percentage of diarrheal cases treated, by place of treatment, children under five Percent of Percent of cases treated Percent of cases Percent of cases treated at traditional health cases treated at medical facility treated at pharmacy care (recommended homemade fluid) Rural 90.7 17.7 75.5 22.8 Urban 90.0 27.4 80.6 8.8 Source: Ministry of Health and Family Welfare, 2007. Note: Due to multiple responses, the sum total of 3 right-most columns do not add up to the percent shown in the left column. Table 2.19 Percentage of ALRI cases treated, by place of treatment, children under five Percent of Percent of cases treated Percent of cases Percent of cases treated at cases treated at medical facility treated at pharmacy traditional health care Total 79.97 30.30 26.54 21.55 Rural 79.70 26.70 27.60 24.10 Urban 81.40 49.20 21.00 8.20 Source: Ministry of Health and Family Welfare, 2007. Note: Due to multiple responses, the sum total of 3 right-most columns do not add up to the percent shown in the left column. 34 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Illnesses from ALRI and malaria are indirectly related to infection prevalence rate is 1.62 percent (World Health poor sanitation, as discussed previously. Treatment costs for Organization, 2008). This information yields an average these diseases are only estimated for children under age five. cost of Tk. 65.74 per case for treatment at a medical facility Treatment-related information on ALRI is gathered from the or in a mass treatment campaign. 2007 BDHS (Table 2.20). The same treatment proportion is used for malaria treatment, since no data are available. Welfare and Productivity losses For helminthes infections, it is assumed that all reported Working people lose income while they are ill, since they cases get treatment; this study includes the treatment cost are generally unable to work at those times and laborers and for the whole population. factory workers in the country’s private sector do not receive sick-leave benefits. Illness also reduces their productivity Based on relevant expert opinion, this study conservatively when they return to normal activities after an illness. assumes that the average duration of illness episodes Children also lose their time and miss their school due to of diarrhea, ALRI, and malaria is six days. In the case of illness. This study captures all this time and productivity helminthes infection, the productivity lost by the patient is lost by patients. Since patients also need to be taken care of assumed to be one hour per day over one week. during their illness, this study also accounts for the cost of caregivers’ time. It is assumed that adults spend one hour This study includes doctor’s fees, transport costs, diagnostic per treated case to seek medical treatment and spend two test costs, and medicine costs to estimate the overall hours per day during illness episodes to provide support and treatment cost of each illness. Since the cost is estimated for home health care to patients. Helminthes infection causes moderate cases only, no hospitalization costs are included. malnutrition and anemia, which also cause people to lose This approach therefore underestimates the true costs of their productivity, so this loss is also estimated. It is assumed illness episodes related to poor sanitation. that all treated infectious persons lose one hour per day over a week due to worm infection. The 2005 Household Income and Expenditure Survey identified Tk.115 as the average doctor’s fee and Tk. 79 for To estimate the value of this lost time, this study estimates the transport costs at the national level. This study assumes that value of a worker’s full working day using the unemployment- these figures are the same for all diseases. Average medicine adjusted labor share of GDP per worker. Since not all the lost and diagnostic test costs have been estimated to be Tk. 365 time will have the value of the going wage rates, 30 percent for diarrhea, Tk. 1,613 for ALRI, and Tk. 499 for malaria, of the value of the unemployment-adjusted labor share of according to the prescriptions provided for moderate cases GDP per worker is used in the study, which is a conservative by health experts. Only the cost of medicine is included estimate. Children’s (under age 15) time is valued at 50 for those who have been treated at a pharmacy. Tk. 30 per percent of the adult rate. Assuming 250 working days per day is assumed for treatment by traditional health care. year and an eight-hour working day, the value per hour for an adult is Tk. 8.9 at the national level, Tk. 6.9 in rural For helminthes infection, treatment cost is estimated at areas, and Tk. 15.6 in urban areas. For children, the values Tk. 435, which includes medicine, diagnostic test, doctor’s are half of the adult values. fee, and transport cost. A lot of people are treated through mass campaigns, and this study assumes that the unit cost Water-Related Costs Associated with of a mass campaign treatment is Tk. 23. At the national Poor Sanitation and Hygiene level the treatment rate is 7 percent, and this study Human excreta pollute water. Polluted water causes disease, conservatively assumes that 50 percent of all high-intensity foul odor, oxygen depletion, turbidity, eutrophication, infections (those with a high propensity to cause death if and asphyxiation, which lead households to treat water untreated) are treated at the medical facilities. According or seek alternative water sources, and it therefore has to the World Health Organization’s Global Burden of economic implications. Disease study (2004 update), the worldwide high-intensity www.wsp.org 35 Economic Impacts of Inadequate Sanitation in Bangladesh Many households in Bangladesh do not have access to safe Household treatment of drinking water and drinking water at their premises. Many people therefore have related costs to treat water for safe drinking water and many sometimes Information on the different treatment methods used by have to fetch both drinking and non-drinking water, whose households is available from the 2007 BDHS (NIPORT, quality may not always be safe. These activities have financial Mitra and Associates, and Macro International, 2007) and nonmonetary costs. This study estimates both kinds of (also see Table 2.20). Financial and nonmonetary costs are cost. The following aspects are included in this estimation: estimated for each treatment method separately for rural and urban households, and these estimates are then added n Cost of household treatment of drinking water: to arrive at a national estimate. • Boiling (financial + nonmonetary cost) • Bleach/chlorine (financial + nonmonetary cost) Both financial and nonmonetary costs are involved in treating • Strained through cloth (nonmonetary cost) drinking water by boiling. The financial cost is the fuel cost • Filter (financial + nonmonetary cost) for boiling, and the nonmonetary cost includes the cost of collecting fuel and storing boiled water. National data on n Cost of piped drinking and non-drinking domestic water the use of cooking fuel by households is available from the production (financial + nonmonetary cost), and 2007 BDHS (NIPORT, Mitra and Associates, and Macro International, 2007) (Table 2.21). This study assumes that n Cost of fetching cleaner water (financial + non- the fuel a household uses for cooking is also used for boiling monetary cost). drinking water. Table 2.20 Household water treatment, by method (percent of households) Treatment Treatment by Treatment by Treatment by boiling bleach/chlorine cloth straining by filter Rural households 0.6 0.1 0.7 1.7 Urban households 17.5 0.5 6.9 3.1 Source: Ministry of Health and Family Welfare, 2007. Table 2.21 Percentage distribution of households using fuel for cooking, by fuel type Type of fuel Rural Urban Total LPG/natural gas/biogas 0.5 37.9 8.6 Wood 43.8 44.3 43.9 Agricultural crop/straw/shrubs/grass 46.2 13.2 39.0 Animal dung 9.4 3.6 8.1 Other 0.2 1.0 0.3 Source: Ministry of Health and Family Welfare, 2007. 36 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Household costs for treating drinking water, members. The cost per kilogram of wood is assumed to be by treatment type Tk. 2, and the boiling time for one liter of drinking water The country report from the International Benchmarking using wood is assumed to be 20 minutes (an extra five Network for Water and Sanitation Utilities31 finds that total minutes is needed as compared with LPG). These numbers water consumption per person per day was 95.7 liters in yield the figures of fuel cost of boiling per liter of water using 2007. A study from Bangladesh finds that 2.92 liters of wood (Table 2.22). drinking water is needed for each person per day (Milton et al., 2006, pp. 431-6). These numbers are applied to the fuel The calculation assumptions and steps are given below: costs (explained next) to arrive at annual costs of household water treatment. (1) Cost of 1 kilogram of wood = Tk. 2 Boiling water with liquefied petroleum gas. The monthly (2) Total cooking time per day for one household fuel cost of boiling water has been estimated for this study. (5-6 members) = 6 hours (assuming) For liquefied petroleum gas (LPG), each household has to spend Tk. 350 for a single burner.32 A household with (3) 3 kilograms of wood are needed for one household five members needs five to six hours for cooking per day, per day which yields a monthly estimate of total cooking hours per household. Dividing the monthly rent by the total hours, (4) 2 hours of cooking requires 1 kilogram of cost per hour is estimated. A boiling time of 15 minutes is wood = Tk. 2 assumed for treating one liter of water, and per-hour boiling (5) Boiling time per liter of water = 20 minutes cost of 1 liter water using LPG is estimated (Table 2.22). Note that the government’s subsidy for gas is not considered (6) Therefore, the fuel cost for boiling one liter of water for this calculation. (financial) = 2*0.33/2 = Tk. 0.3334 The calculation steps are as follows: Information on handling costs is not available, so this study assumes that the handling costs are the same as those in India, (1) Natural gas tariff (monthly) for a single burner which are available. Also, it is assumed that the boiling cost = Tk. 350 using LPG is the same as that for using biogas, natural gas, (2) Total cooking time per day for one household and other fuels; and the boiling cost using wood, estimated (5-6 members) = 6 hours (assuming) above, is also applied to the use of straw, shrubs, grass, crop waste, and dung cakes as fuel. (3) Boiling time per liter of water = 15 minutes Treating water by bleaching, straining, or filtering. The (4) Therefore, fuel cost for boiling per liter, fuel cost cost of bleach/chlorine tablets (e.g., the Halo tab) is Tk. 1.5 (Financial) = 350*0.25/(6*30) = Tk. 0.4833 for each tablet, which is used to treat 10 liters of water, and the handling cost is assumed to be Tk. 1.5.35 For straining Boiling water with wood fuel. Three kilograms of wood through cloth, the annual cost per household is assumed are needed per day for cooking for one household of five to be Tk. 547.5.36 For using filters, the cost is estimated by 31 www.ib-net.org. 32 Information from Petrobangla, the Bangladesh Oil, Gas & Mineral Corporation; see www. petrobangla.org.bd. 33 In 2009 prices, it is Tk. 0.55. 34 In 2009 prices, it is Tk. 0.37. 35 In 2009 prices, it is Tk. 1.73. 36 In 2009 prices, it is Tk. 6,003.68. www.wsp.org 37 Economic Impacts of Inadequate Sanitation in Bangladesh dividing the price of a filter by the number of guaranteed (Ministry of Health and Family Welfare, 2007, p. 75) years of use, which yields Tk. 500 as the annual cost per (Tables 2.25 and 2.26). Per-capita water consumption, household, and37 the (nonmonetary) handling cost is as reported by the International Benchmarking Network assumed to be Tk. 547.5 per filter per year.38 for Water and Sanitation Utilities,39 is 95.7 liters per day, including 2.92 liters for drinking water per person per All the above boiling cost estimates for various fuels are day (the remaining 92.8 liters of water per day is used for summed up in Tables 2.22 (fuel costs by unit) and 2.23 other purposes). (annualized costs). According to the same source, the operational cost was Piped water $0.093 per cubic meter/1,000 liters in 2007. This study Information on household use of piped drinking and assumes that the fraction of piped water production cost non-drinking water is available from the 2007 BDHS attributable to sanitation is 50 percent. Table 2.22 Financial and nonmonetary costs of treating drinking water Types of treatment Financial (Tk.) Nonmonetary (Tk.) Boiling: Cost of boiling per liter per hour LPG 0.48 0.26 Wood 0.33 1.04 Bleaching: Cost of bleach/chlorine tablet, per 10 liters 1.5 1.5 Straining: Annual per household cost of straining through cloth 547.5 Filtering: Annual cost of filter 500.00 547.5 Source: Author’s estimates and assumptions. Table 2.23 Annual cost of water treatment (boiling and bleach) per household Number of Boiling: Average Boiling: Average indirect Per household cost of Per household cost of households purchased fuel cost cost per household, boiling (annual) (Tk.) bleach/chlorine per household (annual, including collected fuel (Annual) (Tk.) financial) (Tk.) (annual, economic) (Tk.) Rural 22,451,915 17 6,836 6,853 1,503 Urban 7,724,167 1,987 3,781 5,768 1,535 Source: Author’s estimates. 37 In 2009 prices, it is Tk. 575. 38 In 2009 prices, it is Tk. 661.825. 39 www.ib-net.org. 38 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.24 Percent and number of households using piped drinking and non-drinking water Percent of Percent of Number of Number of Population Population households with households with households with households with piped with piped piped drinking water piped non-drinking piped drinking with piped non- drinking non-drinking water* water drinking water water water Total 7.06% 6.0% 2,131,149 2,076,360 10,227,272 9,962,036 Rural 0.1% 0.2% 22,452 44,904 105,524 211,048 Urban 27.3% 26.3% 2,108,698 2,031,456 10,121,748 9,750,988 Source: Ministry of Health and Family Welfare, 2007; *Author’s secondary analysis of BDHS 2007. Table 2.25 Annual consumption of piped water Drinking water: Piped water Non-drinking domestic water: Piped water Total piped water production production (m /’000 liters) 3 production (m /’000 liters) 3 (m3/’000 liters) Total 10,900,226 337,361,361 348,261,587 Rural 112,467 7,147,077 7,259,545 Urban 10,787,759 330,214,283 341,002,042 Source: Author’s estimates. Fetching water Many households have to fetch safe drinking water from The relevant information is available from the Multiple outside their premises, so their household members have to Indicator Cluster Survey 2006 (Bureau of Statistics, 2007, spend extra time on this task. This study captures this time p. 61).Valuation of this extra time spent fetching is estimated loss. Households that do not have any water access on their in this study using a method similar to that described earlier. premises are assumed to fetch drinking water from outside. (Table 2.26). Table 2.26 Fetching drinking water: Number of households and average time spent Percent of all households that Number of households that fetch Average drinking water fetch drinking water drinking water fetching time (minutes) Rural 34.9% 7,835,718 12.5 Urban 23.4% 1,807,455 17.1 Source: Bureau of Statistics, 2007. www.wsp.org 39 Economic Impacts of Inadequate Sanitation in Bangladesh USER PREFERENCE, TIME LOSS, AND In reality, the actual figure might be higher than those survey WELFARE COST data indicate. Different empirical studies have examined the Improved sanitation facilities have implications for access reasons behind the higher percentage of open defecation in time and convenience related to the use of toilets, and this Bangladesh. For children and sometimes for adults too, open in turn has a number of welfare effects. Improved sanitation defecation is a common traditional practice even among systems lead to time savings, increases in school attendance households that might have improved or unimproved toilet rates, and increases in the women’s rate of labor force facilities. Therefore, this study accounts for access time used participation. This study estimates the economic impact of for open defecation including people who defecate in open user preference for the sanitation option. User preference has places despite having some sort of toilet facility. Age-group been documented in a number of research papers, including and residence-specific data on open defecation are not studies on comfort, acceptability, privacy, convenience, available from any single source; therefore, data have been security, conflict, status, and prestige. These aspects are gathered from multiple sources to yield a national figure for covered by this study to measure the economic impact of open defecation. intangible user preference. A study by Barkat et al. (2009, pp. 36-37) suggests that Open defecation, shared toilets, and 53.5 percent of under-five children in rural areas defecate related costs in open places. This study applies that percentage of under- A large number of households in Bangladesh have no private five children to the 5-to-14 age group, since no data for latrine or comfortable latrine, and a large number have no the older age group are available. For the age 15+ rural toilet at all. Using shared latrines or defecating in open population, BDHS data are used, since no other reliable places causes discomfort, inconvenience, time loss, and information has been found for this age group, so this must health hazards, especially for girls and women. The absence be a conservative estimate. It was reported at the Third of toilet facilities lengthens access time, which is time that South Asian Conference on Sanitation (Local Government could be used for other productive activities. This study Division, MLGRDC, 2008) that in Bangladesh almost estimates this welfare loss by accounting for the cost of time 12 percent of households do not use any type of improved spent on travelling to reach open defecation sites and the or unimproved toilet. By applying the estimated rural waiting time required when shared toilets are insufficient. figures (24.7 percent) for this study and the age-specific distribution of the urban population (using reported A toilet access cost for households has been calculated proportions from the BDHS), the proportion of the urban separately for different age groups and for different residence population defecating in open places, by age-group, is areas. It is estimated from the 2007 BDHS that 1.7 percent estimated. The resulting percentages of the population of the population in urban areas and 9.1 percent in rural defecating in open places are represented in Table 2.28. areas have no toilet facilities or defecate in open places for Information on use of shared latrines (also based on 2007 other reasons (Table 2.27). BDHS data) is represented in Table 2.30. Table 2.27 Percent of population with no toilet facility, by age group Rural Urban Total Children under age 5 9.9 2.0 8.3 Persons ages 5 to 14 10.0 2.0 8.4 Persons over age 15 8.6 1.6 7.0 Total 9.1 1.7 7.5 Source: Author’s secondary analysis of the 2007 BDHS. 40 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.28 Percent of population defecating in open places, by age group Rural Urban*** Children under 5 53.5* 9.7 Persons ages 5 to 14 53.5** 8.8 Persons over age 15 8.6*** 8.8 Total 24.7 8.9**** Source: *Barkat et al., 2009; ***Author’s secondary analysis of the 2007 BDHS. **Assuming the same percentage of age group < 5. **** Local Government Division, MLGRDC, 2008. Table 2.29 Percent of population using shared latrines, by age group Rural Urban Children under 5 42.5 52.3 Persons ages 5 to 14 35.5 44.5 Persons over age 15 35.6 40.5 Source: Author’s secondary analysis of the 2007 BDHS. Table 2.30 Population defecating in open and using shared latrines, by age group Using open defecation Using shared latrines Children under Persons Persons over Children under Persons Persons age 5 ages 5 to 14 age 15 age 5 ages 5 to 14 over age 15 Total 6,729,849 14,598,004 8,033,501 6,982,989 12,880,110 34,278,883 Rural 6,373,808 13,871,077 5,820,746 5,063,305 9,204,173 24,095,181 Urban 356,041 726,927 2,212,755 1,919,684 3,675,937 10,183,702 Source: Author’s estimates. www.wsp.org 41 Economic Impacts of Inadequate Sanitation in Bangladesh Using these proportions of open defecation and shared Assuming that girls ages 10 to 19 are in secondary schools, latrines, the numbers of people (by age group) in rural- the net attendance ratio for secondary schools have been urban areas who are defecating in open places and using applied here. These percentages are available from Gender shared latrines is estimated (Table 2.30). Statistics Bangladesh 2008 (Bureau of Statistics, 2009, p. 9) and from the Bangladesh Multiple Indicator Cluster Survey Due to lack of reliable data, this study assumes that for 2006 (Bureau of Statistics, 2007, p. 92). open defecation, one person spends 15 extra minutes (per latrine use) in urban areas and 20 minutes in rural areas. A study by Barkat et al. (2009) (conducted for WaterAid) It is also assumed that the extra time needed for travel and reveals that 57.5 percent of secondary schools have separate the waiting time to use shared latrines adds up to 5 extra girls’ toilets; that is, 42.5 percent of secondary schools do minutes (again per use) for both rural and urban areas. (The not have separate toilets for girls at school. To estimate methodology for estimating the economic value of this lost the number of girls in school without separate toilets, this time was described earlier.) proportion has been applied to the number of girls ages 10 to 19 who are attending secondary school. School sanitation and hygiene Lack of appropriate and adequate sanitation facilities at Due to lack of reliable data, this study conservatively schools can prevent girls from attending, especially during assumes that one student misses 10 days from school each their menstrual period. Unhygienic latrines and lack of water year due to inadequate sanitation options at school. The supply at school also cause diseases among the children, and valuation of missed days has been estimated using the this undermines educational outcomes and increases the method described earlier. dropout rate. Workplace sanitation and hygiene This study captures the economic loss due to absence from Workplace sanitation and hygiene conditions have an school that is attributed to poor and inadequate sanitation impact on the productivity of employees, especially women. for girls ages 10 to 19 (Table 2.31). Due to lack of available This study assumes that a working woman misses 10 working data, this study excludes the impacts of poor sanitation on days in a year due to poor sanitation at her workplace. other age groups and on boy students. It also excludes the The Statistical Pocket Book 2007 (Bureau of Statistics, long-term effects on life decisions and resulting economic 2008a, p. 148) reports the proportion of age 15+ working productivity caused by these absences. women by their residence area. Table 2.31 Number and percent of girls ages 10 to 19 in schools without separate toilets Percent of Number of Net attendance Number of Percent of Number of girls in all females girls ages 10 to ratio, secondary girls ages 10 secondary schools schools without ages 10 to 19* 19 (millions) education to 19 attending with girls’ toilets separate toilets (percent)** education Rural 20.9% 10.95 33.6% 3,679,738 57.5% 1,563,888 Total 21.2% 3.69 42.9% 1,582,495 57.5% 672,560 Source:*Gender Statistics of Bangladesh 2008; **Bangladesh Multiple Indicator Cluster Survey 2006. 42 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 2.32 Women absent from work due to poor sanitation at the workplace Number of Women absent due working women* to poor sanitation Rural 8,600,000 860,000 Urban 2,700,000 270,000 Source: Bureau of Statistics, 2008a. Note: Working women excludes housewives. To estimate the total time loss, it is assumed that 10 percent used to obtain the most appropriate data, which have been of these working women miss 10 working days per year per analyzed using appropriate methodology. Since this study person from their workplace due to poor sanitation and is based on available secondary data and assumptions, a hygiene (Table 2.32). range of choices was possible for estimating parameters. Some of those estimation choices could have been much SENSITIVITY ANALYSIS more conservative, and others much more liberal, than the This study is completely based on secondary information. estimations finally used in this study. A sensitivity analysis Where appropriate data were unavailable, assumptions captures the low and high cases of parameter values to cover and opinions of relevant experts were combined to fill the overall variation. Table 2.33 shows the sensitivity values the information gap. Different reliable sources have been that are used in this study. Table 2.33 Ranges of parameter values used in sensitivity analysis Parameter Low Base High Valuation of premature GDP per person Unemployment adjusted labor Transferred VOSL based on lowest value mortality share of GDP per worker after 1996 reported by an OECD study, with income elasticity of 0.8. Value of adults’ lost time 30% of GDP per person 30% of unemployment adjusted 100% of unemployment adjusted labor labor share of GDP per worker share of GDP per worker Value of lost children’s 50% of value of adult time 50% of value of adult time 100% of value of adult time lost time Piped water consumption 2.92 liters for drinking, 2.92 liters for drinking, 95.7 4 liters for drinking, 106.6 liters total per person per day 95.7 liters total liters total (based on study (based on WHO recommendation,40 and from Bangladesh, and lowest total water consumption) consumption for a water utility) Cost of piped water Tk. 6.51 per 1,000 liters Tk. 6.51 per 1,000 liters Tk. 9.03 per 1,000 liters (based on average tariff) (based on cost/collection ratio of 1.387) Cost of boiling one liter of Tk. 0.59 Tk. 0.74 Tk. 0.89 water using LPG fuel Cost of boiling one liter of Tk. 0.82 Tk 1.37 Tk. 1.92 water using wood fuel 40 Howard and Bartram, 2003. www.wsp.org 43 Economic Impacts of Inadequate Sanitation in Bangladesh GAINS FROM SANITATION AND HYGIENE 25 percent from water supply improvement, and 39 percent The present study has estimated the economic losses due from household treatment of water for diarrheal incidence to poor sanitation, but it is also important to estimate the (Table 2.34). costs that can be reduced by promoting different sanitation interventions. Hygiene promotion, along with improved This study classifies excreta disposal systems as a sanitation water supply and sanitation, have wider health implications. intervention; hygiene and health education and their practice Adequate sanitation and proper hygiene practices reduce and encouragement as hygiene interventions; improvements disease incidence. For example, handwashing with soap in water supply as water supply; and water treatment for reduces diarrheal incidence by 47 percent (Curtis and safe drinking water as household treatment of water. This Cairncross, 2003). information has been used to estimate the potential gains from health and other costs. This study estimates economic To estimate the gains from sanitation and hygiene gains from the following intervention aspects: sanitation interventions, this study uses data from a meta-analysis that and hygiene, improved access to toilets, improved hygiene estimates reduced relative risk for diarrhea from sanitation behavior (which may also include toilet use), improved access and related interventions (Fewtrell et al., 2005). The meta- to safe quality water, and safe confinement and disposal of fecal analysis shows that relative risk is reduced by 32 percent from matter (sewage treatment). Table 2.35 shows the proportion of sanitation intervention, 45 percent from hygiene intervention, costs that can be mitigated by these different interventions. Table 2.34 Diarrhea incidence reduction from types of sanitation and hygiene intervention Type of intervention Number of Relative risk of diarrhea Percent of diarrhea incidence studies included with sanitation intervention reduction from intervention Low Base High Low Base High Sanitation 2 0.53 0.68 0.87 47 32 13 Hygiene 8 0.40 0.55 0.75 60 45 25 Water supply 6 0.62 0.75 0.91 38 25 9 Household treatment of water 8 0.46 0.61 0.81 54 39 19 Source: Fewtrell et al., 2005. Table 2.35 Benefits from sanitation and hygiene interventions, by intervention type Interventions Benefits in different sectors Sanitation and hygiene 45% of health impacts by hygiene intervention 100% of water-related impacts 100% of welfare impacts Improved access to toilets 32% of health impacts by sanitation intervention 100% of welfare impacts Improved hygiene behavior (may also include toilet use) 45% of health impacts by hygiene intervention 100% of welfare impacts Improved access to safe quality water 39% of health impacts 100% of household water treatment cost 100% of costs of fetching water from cleaner sources Safe confinement and disposal of fecal matter (sewage treatment) 32% of health impacts by sanitation intervention 100% of household water treatment cost 100% of costs of fetching water from cleaner sources 44 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh LIMITATIONS OF THE STUDY subsidies were costed, since the Government of Bangladesh Although it is not a limitation, the author of this report provides subsidies to several sectors, including gas, water, acknowledges that despite the availability of data for year and public health facilities. When estimating the costs of 2009, this study is based on data for the year 2007, a choice disease treatment, drinking water treatment, and use of made so that the findings can be comparable with those piped water, such subsidy elements were not considered. reported on in other ESI country reports. The year 2007 was chosen as a reference year by consensus, which is a key As stated earlier, this study is based on secondary data, methodological issue. making use of a good number of published national reports and other authentic sources. Furthermore, different Inadequate sanitation has huge impacts on different sectors, assumptions have been adopted to fill the information including health, water, environment, fish production, gaps, made by the author based on his experience and and tourism. In this particular study, only three sectors expertise. For example: to calculate the morbidity burden have been considered for measuring the ill effects of poor of diarrhea, the prevalence rate for the population above age sanitation. Obviously, therefore, the estimated costs are five was assumed to be one-fourth the rate of the below-five underestimations. The actual cost count for poor sanitation population; to measure the cost of treating drinking water, would be much higher if the impacts on every sector were total cooking time per day for one household was assumed considered. The cost count due to poor sanitation would be to be six hours; and extra time spent for open defecation and higher still if all nonmonetary costs could be monetized (e.g., using shared latrines was assumed in calculating the impact loss of dignity and lack of comfort due to open defecation). of intangible user preference. In a few cases, experts’ (such as Other costs would inevitably be higher too if the relevant doctors’) opinions have been sought. www.wsp.org 45 Economic Impacts of Inadequate Sanitation in Bangladesh 3.   Economic Impact Results OVERVIEW OF RESULTS Total impacts This chapter lays out the estimated economic impacts of This report estimates that inadequate sanitation has inadequate sanitation on health, water, and the access time substantial economic impacts in Bangladesh. Table 3.1 needed to use poor sanitation facilities. Health impact shows that its estimated aggregate annual economic impact includes the mortality and morbidity burden of diseases that is Tk. 295.48 billion ($4.23 billion).41 This amount is are either directly or indirectly related to poor sanitation. equivalent to 6.3 percent of the GDP of Bangladesh (in Water impact includes the cost for accessing and treating 2007).42 Figure 3.1 summarizes the broad component-wise drinking water and non-drinking water for domestic uses. economic impacts of inadequate sanitation in Bangladesh Finally, access time impact includes the extra time needed in 2007. Attempts have been made to show both the for open defecation and for use of shared toilets, as well economic impacts and the financial impacts.43 Economic as the time lost due to girls’ absence from schools and impacts have come from health, water, and other welfare- adult women’s absence from workplaces because of poor related economic losses. Financial losses are estimated to sanitation. Also estimated for each of the impact areas are be Tk. 34,554 million ($494 million) (see Table 3.1). In the potential gains that can be achieved from different percentage terms, the financial impacts are 12 percent of sanitation interventions. the total economic impacts.44 Financial impacts result from health and water-related financial losses, which in sum are equivalent to 0.7 percent of the GDP.45 Figure 3.1 Economic impacts of inadequate sanitation, by category Workplace access 0.8 Access Time School access 0.9 Household access 30.1 Cost of fetching water 3.5 Water Piped water 1.1 Household treatment, drinking water 9.8 Health care 22.1 Health Productivity loss 31.9 Premature mortality 195.1 0 50 100 150 200 250 Billion Tk. (in billion Taka) Source: Author’s estimates. 41 In 2009 prices, the figure is Tk. 339.802 billion ($4.85 billion). 42 In 2009 prices, it was 5.53 percent of GDP in 2009. 43 In 2009 prices, the figure is Tk. 39,737.1 million ($567.1 million). 44 In 2009 prices, it was 11.6 percent of GDP in 2009. 45 In 2009 prices, it was 0.64 percent of GDP in 2009. 46 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 3.1 Economic and financial impacts of inadequate sanitation Economic impacts (in millions) Financial impacts (in millions) Impact type Tk. US$ Percent of Tk. US$ Percent of total total Health 249,186 3,560 84% 30,375 434 88% Premature mortality 195,101 2,787 66% - - - Productivity loss 31,941 456 11% 8,232 118 24% Health care 22,144 316 7% 22,144 316 64% Water 14,510 207 5% 4,179 60 12% Household treatment, drinking water 9,841 141 3% 3,045 43 9% Piped water 1,134 16 0.4% 1,134 16 3% Cost of fetching water 3,535 51 1% - - - Other welfare 31,779 454 11% - - - Household access 30,112 430 10% - - - School access 853 12 0.3% - - - Workplace access 814 12 0.3% - - - Total impact 295,476 4,221 100% 34,554 494 100% Percent of GDP 6.3 0.7 Source: Author’s estimates. Using the available data, we calculate the economic Water-related economic impacts of inadequate sanitation impact of inadequate sanitation on health, water, and resulting from the costs of accessing cleaner water are other welfare where health-related economic impacts of Tk.14,510 million or 5 percent of the total economic inadequate sanitation result from losses due to premature impact, equivalent to 0.3 percent of GDP in 2007.47 Welfare mortality, productivity loss, and health care. This is equal to and time losses from not having proper access to accessible Tk. 249,186 million, which is 84 percent of the total toilet facilities are Tk. 31,779 million or 11 percent of the economic impact or equivalent to 5.3 percent of GDP in total economic impact, equivalent to 0.7 percent of GDP.48 2007 (see Figures 3.2, 3.3, 3.4 and Table 3.1).46 Figure 3.2 Summary of economic impacts of inadequate sanitation 300000 249,186 200000 100000 31,779 14,510 0 Health Water Other welfare (in million Tk.) Source: Author’s estimates 46 In 2009 prices, it is Tk. 286,563.9 million, which is equivalent to 4.66 percent of GDP in 2009. 47 In 2009 prices, it is Tk. 16,686.5 million, which is 0.27 percent of GDP in 2009. 48 In 2009 prices, it is Tk. 36,545 million, which is 0.59 percent of GDP in 2009. www.wsp.org 47 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.3 Economic impacts of inadequate sanitation as percent of gdp 6.0% 5.3% Percent of GDP 4.0% 2.0% 0.3% 0.7% 0.0% Health Water Access time Series1 Source: Author’s estimates. Figure 3.4 Health, water-related, and access time impacts as percent of total economic impacts Access time 11% Water 5% Health 84% Source: Author’s estimates. Per-capita impacts Although per-capita impacts are low, a densely populated per capita is the loss related to health, Tk.102 ($1.5) the loss country like Bangladesh with a gigantic population (142 related to water, and Tk. 223 ($3.2) the loss related to access million) faces vast national impacts from inadequate time.49 Again, the total financial impact due to inadequate sanitation. The huge population size is a major factor as far sanitation and hygiene is Tk. 242 ($3.5) per capita, of as any disorder in the country is concerned, since the total which Tk. 213 ($3.0) related to health and Tk. 29 ($0.4) is liveable area is too small for most people to survive in an related to water.50 Regarding economic impacts, 84 percent efficient way. Table 3.2 and Figure 3.5 show that the total (Tk. 1,747) is related to health, 5 percent (Tk. 102) to per-capita economic impact due to inadequate sanitation water, and the remaining 11 percent (Tk. 223) to access and hygiene is Tk. 2,072 ($29.6), of which Tk. 1,747 ($25) time (Figure 3.5). 49 In 2009 prices, the total per-capita economic impact is Tk. 2,383 ($28.7), of which Tk. 2009 ($28.7) is the loss related to health, Tk.117 ($1.67) is related to water, and Tk. 256 ($3.66) is related to access time. 50 In 2009 prices, Tk. 278.3 ($3.98), of which Tk. 244.95 ($3.5) per capita is the loss related to health and Tk. 33.35 ($0.47) is related to water. 48 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.5 Per-capita economic impacts of inadequate sanitation Access time 11% Water 5% Health 84% Source: Author’s estimates. Table 3.2 Per-capita economic and financial impacts of inadequate sanitation Impact Type Economic impacts Financial impacts Tk. US$ Tk. US$ Health 1,747 25 213 3 Water 102 1.5 29 0.4 Access time 223 3.2 - - Total impact 2,072 29.6 242 3.5 Source: Author’s estimates. Figure 3.6 shows that the per-capita financial impact of improved access to good quality water. These economic inadequate sanitation in Bangladesh in 2007 is equal to gains can be achieved by avoiding losses from morbidity a loss of Tk. 242 ($3.5).51 Of this amount, health-related and mortality, eliminating domestic water-related costs that losses are 88 percent at Tk. 213 ($3.0) and water-related result from inadequate sanitation, reducing time accessing losses are 12 percent at Tk. 29 ($0.4).52 There are no data on shared toilets and open defecation sites, and reducing the financial impacts on access time. absentee time at schools and workplaces. Improving a country’s overall sanitation system or facilities is in fact a Gains from sanitation and hygiene interventions complex challenge, one that involves action on several Table 3.3 shows the estimated economic gains that can fronts. Individuals need to be aware of how their behavior be achieved by implementing sanitation and hygiene may damage the environment and what they need to do to interventions in Bangladesh, where interventions include protect their own and public health. This requires education improving access to and use of sanitary toilets, improved aimed at young people as well as information campaigns hygiene behavior, safe disposal of human excreta, and targeted to all age groups. 51 In 2009 prices, it is Tk. 278.3 ($3.97). 52 In 2009 prices, health-related losses are Tk. 344.95 ($3.5) and water-related losses are Tk. 33.35 ($0.48). www.wsp.org 49 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.6 Per-capita financial impacts of inadequate sanitation Water 12% Health 88% Source: Author’s estimates. Estimates presented in Table 3.3 show that Tk. 158.42 and safe confinement and disposal of fecal matter (sewage billion ($2.263 billion) of economic gains can be achieved treatment).53 These gains come from the three areas— from sanitation and hygiene interventions involving health, water, and access time—that this study considers. It access to improved toilet facilities, hygiene education is equivalent to 3.4 percent of GDP, or Tk. 1,111 ($15.9) and hand-washing with soap, improved domestic water per capita in 2007.54 quality, improved water supply, improved food handling, Table 3.3 Potential economic gains from sanitation and hygiene interventions Interventions Million Tk. Million US$ Percent of Percent of Per-capita Per-capita GDP economic gains (Tk.) gains (US$) impacts Gains for sanitation + Sanitation and hygiene 158,423 2,263 3.4% 54% 1,111 15.9 hygiene interventions combined Sanitation alone 111,519 1,593 2.4% 38% 782 11.2 Improved hygiene 143,913 2,056 3.0% 49% 1,009 14.4 behavior Water free from Improved access to 110,559 1,579 2.3% 37% 775 11.1 bacteriological safe water contamination Safe confinement and disposal of fecal 93,116 1,330 2.0% 32% 653 9.3 matter (sewage treatment) Source: Author’s estimates. 53 In 2009 prices, it is Tk. 182.186 billion ($2.603 billion). 54 In 2009 prices, the gain is 2.96 percent of GDP in 2009 or Tk. 1,278 ($18.25) per capita in 2009. 50 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Access to improved toilets with hygiene education the most pronounced. A large burden of diseases and deaths could result in gains of Tk.111.52 billion ($1.6 billion), stems directly or indirectly from inadequate sanitation. The equivalent to 2.4 percent of GDP;55 improved hygiene estimates presented in Figure 3.7 show that annual cases of behavior, including improved water supply and toilet use, diarrhea in children under age five in Bangladesh numbered could result in gains of Tk. 143.91 billion ($2.0 billion), 28 million in 2007 and that annual cases of diarrhea among equivalent to 3.0 percent of GDP.56 Improved access to all age groups numbered 85 million. Rural areas reported good quality water free from bacteriological contamination 73.6 percent of all diarrhea cases, and children under age five is estimated to result in gains of Tk. 110.56 billion represented 75.5 percent of all. Urban areas reported 26.4 ($1.58 billion), equivalent to 2.3 percent of GDP.57 Safe percent of all cases and 24.5 percent of cases in children under confinement and disposal of sewage is expected to generate age five (Table 3.4). This shows that the chance of being a a gain of Tk. 93.12 billion ($1.33 billion), equivalent to victim of diarrhea is much higher in rural areas than in urban 2.0 percent of GDP.58 areas. This is particularly true for children under age five where the rural population is concerned, since 74.4 percent of the HEALTH IMPACTS total population in rural areas and 77.4 percent of children In this section, estimates are presented of the direct and under five in those areas suffer from diarrhea. indirect health impacts that are caused by inadequate sanitation in Bangladesh in 2007. Direct health impacts Cases of ALRI diseases number 7 million annually among from diarrheal diseases, helminthes infection, and trachoma children under age five. The burden of ALRI attributable are estimated for all age groups. Indirect health impacts are to inadequate sanitation via malnutrition is estimated only estimated for deaths and diseases resulting from diarrhea- for children in that age group. This burden is mostly borne induced malnutrition only in children under age five. Indirect by the rural population, which accounts for 84.7 percent impacts are estimated for deaths from ALRI, malaria, measles, of the ALRI cases attributable to inadequate sanitation. An and all-cause mortality, and for disease cases from ALRI and unexpected finding is that only 15.2 percent of diarrhea malaria. (The methods used to estimate these health impacts cases and 23.5 percent of ALRI cases in children are are detailed in Chapter 2.) treated at a medical facility. With better treatment, these children’s suffering from illness, the severity of their illness, Death and disease impacts and resulting mortality would all be reduced, even though We know that inadequate sanitation has impacts on a the underlying cause of these diseases can be addressed by variety of sectors, but among all of them the health sector is improving sanitation and hygiene. Figure 3.7 Cases of diarrhea and ALRI resulting from inadequate sanitation 100 85 80 60 40 28 20 7 0 Diarrhea, all Diarrhea, below 5 ALRI million cases Source: Bangladesh Demographic and Health Survey 2007, and author’s estimates. 55 In 2009 prices,Tk. 128.247 billion ($1.8 billion) and 2.086 percent of GDP in 2009. 56 In 2009 prices, it is Tk. 165.5 billion ($2.36 billion) and 2.74 percent of GDP in 2009. 57 In 2009 prices, it is Tk. 127.143 billion ($1.816 billion) and 2.06 percent of GDP in 2009. 58 In 2009 prices, it is Tk. 107.083 billion ($1.53 billion) and 1.74 percent of GDP in 2009. www.wsp.org 51 Economic Impacts of Inadequate Sanitation in Bangladesh Table 3.4 Annual cases of diarrhea and ALRI attributable to sanitation ALRI cases: Children under age five Diarrhea cases: Share of Share of population Diarrhea cases: Children under age five All ages population under age 5 Millions Percent Percent Millions Percent Percent Percent Millions Rural 6.1 84.7% 75.5% 62.7 73.6% 74.4% 77.4% 21.1 Urban 1.1 15.2% 24.5% 22.4 26.4% 25.6% 22.6% 6.8 Total 7.2 100% 100% 85.1 100% 100% 100% 28.0 Source: BDHS 2007; and author’s estimates. Considering the whole population, it has been found that Another important cause of mortality among children almost 8 percent of deaths from all causes in Bangladesh under age five is ALRI resulting from malnutrition. Among result from causes related to inadequate sanitation and these children, ALRI is recognized as causing 5.1 percent hygiene. Table 3.5 and Figure 3.8 show that deaths from of all deaths and 15.9 percent of deaths from inadequate diarrhea alone account for 4.3 percent of all deaths, while sanitation and hygiene. Eliminating deaths caused by ALRI accounts for 1.1 percent. Deaths of children under age inadequate sanitation and hygiene-linked diseases would five attributed to inadequate sanitation make up almost 32 greatly elevate Bangladesh’s life expectancy at birth, because percent of all deaths, and those under-five deaths attributed most of these deaths are in children and children make up a to diarrhea account for almost 18 percent of all deaths. large share of the country’s relatively young population. Diarrhea causes more than half (55 percent) of all sanitation and hygiene-related deaths in children under five. Figure 3.8 Deaths attributed to inadequate sanitation as percent of all-cause deaths Other causes 2% All population ALRI 1% Diarrhea 4% All sanitation deaths 8% Other causes 8% Below 5 years ALRI 5% Diarrhea 17% All sanitation deaths 32% Source: Death rates from WHO-GRD: author’s estimates. 52 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 3.5 Percent of deaths attributable to inadequate sanitation and hygiene, by disease and age group Children under age 5: Total population: Children under age Total population: Sanitation-attributable Sanitation attributable five: Distribution of Distribution of deaths deaths as percent of deaths as percent of deaths attributable attributable to all deaths all deaths to poor sanitation poor sanitation Diarrhea (direct) 17.4 4.3 54.8 57.5 ALRI 5.1 1.1 15.9 14.9 Measles 1.7 0.4 5.3 4.9 Malaria 0.08 0.02 0.25 0.24 Other causes 7.5 1.7 23.7 22.1 Helminthes (direct) 0.02 0.03 0.06 0.4 Total mortality 31.9 7.5 100 100 Source: WHO-GBD death rate, and author’s estimates. Table 3.6 presents the number of deaths, time lost, and cases The effects of this absence are both short term and long due to inadequate sanitation and hygiene in Bangladesh in term. Short-term, children suffering from various direct 2007. The scenario is alarming. The total number of deaths and indirect diseases due to inadequate sanitation finally due to inadequate sanitation is 84,569, among which become unhealthy. In the long term, unhealthy children are diarrhea is estimated to have caused 48,661 deaths. More forced into a disadvantaged position in the job market when than 43,126 (89 percent) occur in children under age five, they grow into adults. In the aggregate, almost 714 million and more than 5,415 (11 percent) occur in people over days of normal activities are estimated to have been lost due age 15. to these diseases in Bangladesh in 2007; a large majority of them resulted from diarrhea and diarrhea-induced illnesses, As explored earlier, sanitation-related diseases cause extensive which account for over 91 percent of the lost time. ALRI loss of time not only for adults but for children as well. This and helminthes infection constitute other major causes of affects children’s attendance at school and at play grounds. time lost from normal activities. Table 3.6 Deaths, cases, and time lost from inadequate sanitation Cases treated at medical Total cases (millions) Time lost Deaths Disease facilities (millions) (million days) (persons) Diarrhea 12.97 85.15 646.63 48,661 Children under age 5 5.086 28.01 213.21 43,126 Children ages 5 to 14 121 7.89 57.14 433.42 Population ages 15+ 5,415 Helminthes infection 13.29 19.30 11.63 328 Children under age 5 1.09 2.08 0.95 49 Children ages 5 to 14 3.38 4.86 2.96 259 Population ages 15+ 8.82 12.36 7.72 20 ALRI 1.7 7.23 54.93 12,597 Measles - - - 4,137 Malaria 0.00028 0.00072 0.0054 199 Other causes - - - 18,647 Total 27.96 111.68 713.19 84,569 Source: Ministry of Health and Family Welfare, 2007; Directorate General of Health Services, 2008a; and author’s estimates. www.wsp.org 53 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.9 Distribution of health economic impacts of inadequate sanitation in bangladesh in 2007 Productivity loss, Tk. 31,941 million, 13% Treatment costs, Tk. 22,144 million, 9% Premature death, Tk. 195,101 million, 78% The economic impact of premature mortality Figure 3.10 shows that premature death dominates health Premature deaths due to inadequate sanitation have serious losses from inadequate sanitation. Productivity losses make effects on economic costs. Of the total health-related up 18 percent (Tk.Figure 3.10 Distribution 29,030 million) of of diarrheal impacts, 33 econom economic impact, 13 percent (Tk. 31,941 million) is due percent (Tk. 714 million) of helminthes impacts, 6 percent by di to productivity losses from poor sanitation and hygiene.59 (Tk. 2,197 million) of100% ALRI impacts, and 0.5 percent (Tk. The costs of treatment account for 9 percent (Tk. 22,144 0.24 million) of malaria impacts.61 Premature deaths account 80% million) and premature deaths account for 78 percent (Tk. for 70 percent (Tk. 110,489 million) of diarrheal impacts, 195,101 million). Deaths, treatment costs, and productivity 60% of helminthes impacts, 85 26 percent (Tk. 549 million) losses from diarrhea have the largest impacts in each of these percent (Tk. 29,762 million) of ALRI impacts, 100 percent categories of health impacts.60 40% (9,773) of measles impacts, 99.9 percent (Tk. 470 million) 20% Figure 3.10 Distribution of economic impacts of inadequate sanitation by diseases 0% 100% Diarrhea Helminthes 80% 60% Premature Death 70% 26% 40% Treatment 12% 41% 20% Productivity 18% 33% 0% Diarrhea Helminthes ALRI Measles Malaria Other causes Premature death 70% 26% 85% 100% 99.9% 100% Treatment 12% 41% 8% 0.04% Productivity 18% 33% 6% 0.05% Source: Author’s estimates. 59 In 2009 prices, it is Tk. 36,732.15 million. 60 In 2009 prices, cost of treatment is Tk. 25,465.6 million and losses due to premature death is Tk. 224,366.15 million. 61 In 2009 prices, productivity losses are Tk. 33,384.5 million from diarrheal impacts; Tk. 821.1 million from helminthes impacts; Tk.2,526.55 million from ALRI impacts; and Tk. 0.276 million from malaria impacts. 54 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.11 Percent distribution of economic impacts of premature mortality from inadequate sanitation Other causes 23% ALRI 15% Diarrhea 57% Measles 5% Helminthes 0.2% Malaria 0.2% of malaria impacts, and 100 percent (44,058) of impacts Although trachoma causes serious illness, disability, and from other causes.62 productivity loss, it is not identified here because the data are unavailable. ‘Other causes’ are those resulting As shown in Figure 3.11 and Table 3.7, diarrhea causes from (excluding diarrhea, helminthes, ALRI, measles, 57 percent (Tk. 110,489 million) of economic impacts of and malaria) ‘all cause’ mortality after removing perinatal premature mortality from inadequate sanitation, helminthes mortality. Mortality from ALRI, measles, malaria, and 0.2 percent (Tk. 549 million), ALRI 15 percent (Tk. 29,762 other causes is an indirect result of the malnutrition million), measles 5 percent (Tk. 9,773 million), malaria caused by sanitation-related diseases in children under 0.2 percent (Tk. 470 million), and other causes 23 percent five. Premature deaths of children below age five were (Tk. 44,058 million).63 overwhelming, accounting for 95 percent of the economic Figure 3.12 Distribution of economic impacts of premature mortality, by age category Urban, Tk. 1,110 million, 98% Rural, Tk. 24 million, 2% Source: Author’s estimates. 62 In 2009 prices, premature deaths cost Tk. 127,062.35 million from diarrheal impacts, Tk. 631.35 million from helminthes impacts; Tk.34,226.3 million from ALRI impacts; Tk. 9,773 from measles impacts; and Tk. 540.5 million from malaria impacts. 63 In 2009 prices, premature deaths cost Tk. 127,062.35 million from diarrheal impacts; Tk. 631.35 million from intestinal worms; Tk. 34,226.3 million from ALRI; Tk.11,238.95 million from measles; Tk. 540.5 million from malaria; and Tk. 50,666.7 million from other causes. www.wsp.org 55 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.13 Distribution of economic impacts of inadequate sanitation via premature death among children under five Other causes, Tk. 44,058 million, 24% ALRI, Tk. 29,762 million, 16% Measles, Tk. 9,773 million, 5% Malaria, Tk. 470 million, 0.3% Diarrhea, Tk. 101,893 million, 55% Helminthes, Tk. 116 million, 0.1% impacts of premature death in Bangladesh in 2007 ALRI causes 16 percent, helminthes 0.1 percent, measles 5 (see Figure 3.12). Diarrhea causes 55 percent of the economic percent, malaria 0.3 percent, and other causes 24 percent impacts from premature deaths in children under five, while (see Figure 3.13). Table 3.7 Health related economic impacts of inadequate sanitation from various diseases Tk. (millions) Premature death Treatment Productivity Total impacts Diarrhea (direct) 110,489 18,334 29,030 157,852 Helminthes (direct) 549 874 714 2,137 ALRI 29,762 2,936 2,197 34,895 Measles 9,773 - - 9,773 Malaria 470 0.17 0.24 470 Other causes 44,058 - - 44,058 Total 195,101 22,144 31,941 249,186 Source: Author’s estimates. 56 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.14 Economic impacts of morbidity as percent of health impacts of inadequate sanitation, by disease 74% 30% 22% 15% 0.1% Diarrhea Intestinal ALRI Malaria Total worms Source: Author’s estimates. Figure 3.15 Percent distribution of economic impacts of morbidity due to inadequate sanitation among treatment cost and productivity 61% 45% 43% 59% 59% 39% 55% 57% 41% 41% Diarrhea Intestinal worms ALRI Malaria Total Treatment Productivity Source: Author’s estimates. The economic impact of morbidity of that disease’s total impact; for helminthes treatment Morbidity impacts constitute a good share of the health costs make up 55 percent, for ALRI 57 percent, and for impacts within each disease category: 0.1 percent of malaria, diarrhea 39 percent of total morbidity impacts. Productivity 15 percent of ALRI, 74 percent of helminthes, and 30 percent losses make up 61 percent of total morbidity impacts for of diarrheal impacts result from morbidity (Figure 3.14). It diarrhea, 45 percent of those for helminthes, 43 percent of can be seen from Figure 3.15 that the average treatment cost those for ALRI, and 59 percent of those for malaria. As a result, is 41 percent and average productivity loss is 59 percent of it can be seen that in the case of diarrhea due to inadequate the total morbidity-related economic impact. The treatment sanitation, the productivity loss is higher than the costs for morbidity induced by malaria makes up 41 percent treatment costs. www.wsp.org 57 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.16 Percent distribution of morbidity costs of inadequate sanitation ALRI, 8.88% Intestinal worms, 2.96% Diarrhea, 88.17% Malaria, 0.001% Source: Author’s estimates. As Figure 3.16 shows, it also appears that among total cases for children below age five account for 33 percent of morbidity costs due to inadequate sanitation, diarrhea the total cost, whereas diarrheal cases for all people above accounts for 88 percent, ALRI for 9 percent, and age 5 account for 51 percent. helminthes for 3 percent. Therefore, diarrhea is the single cause most responsible for the cost of poor sanitation- Productivity and welfare losses from morbidity mediated morbidity. The health-related productivity and welfare costs of inadequate sanitation, as shown in Table 3.9, could be Treatment cost of morbidity as high as Tk. 31,941 million, of which 91 percent is The distribution of treatment costs of sanitation-related due to diarrhea.65 Diarrheal cases for children below age diseases in Bangladesh by age group is shown in Table 3.8. five account for 29 percent of the total cost, whereas It appears that the total cost could be as high as Tk. 22,144 diarrheal cases for people above age five account for million, of which 83 percent is due to diarrhea.64 Diarrheal 62 percent. Table 3.8 Age distribution of treatment costs of sanitation-related diseases (Tk. million) Under age 5 Over age 5 Total Diarrhea 7,230 11,104 18,334 Helminthes 72 802 874 ALRI 2,936 - 2,936 Malaria 0.17 - 0.17 Total 10,238 11,906 22,144 Source: Author’s estimates. 64 In 2009 prices, it is Tk. 25,465.6 million. 65 In 2009 prices, it is Tk. 36,732 million. 58 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 3.9 Health-related productivity and welfare costs of inadequate sanitation, by disease and age group (Tk. million) Disease Under age 5 Over age 5 Total Diarrhea 9,356 19,673 29,029 Intestinal worms 34 680 714 ALRI 2,197 - 2,197 Malaria 0.24 - 0.24 Total 11,588 20,353 31,941 Source: Author’s estimate DOMESTIC WATER IMPACTS used for drinking (Planning Commission, 2008, pp. 62, 85). Barkat and Hussam (2008) have shown that out of the Water pollution 30 million households in Bangladesh, 50 percent are at risk Bangladesh’s water crisis affects both rural and urban of arsenicosis, and the poor (comprising 40 percent of the areas, and the crisis is related to both water scarcity and population) are 11 times more likely than the rich to get water quality. While Bangladesh has made much progress this illness. These authors therefore argue that ‘arsenicosis in supplying safe water to its people, gross disparities in is a disease of poverty’. coverage still exist across the country. For the past two decades, the water from over a million tube wells has Drinking and domestic water been slowly poisoning Bangladeshi villagers with naturally In Bangladesh, there are various sources of household occurring arsenic. Over 18 million people are drinking this drinking water, including piped water, public taps, tube poisoned water daily. Since Bangladesh won independence wells, protected and unprotected dug wells, rain water, in 1971, western donors have funded the construction of surface water, and bottled water (see Table 3.10 and Figure thousands of wells, especially in rural areas. In the early 3.17). The tube well is the most prominent source of 1990s, however, many were found to be contaminated with household drinking water, with 90 percent of people in the naturally occurring arsenic. Nobody knows exactly how country depending on it for that purpose daily. The rate of many people have died, but as many as 50 million may have use of tube wells is comparatively high in rural areas, where been affected by arsenic poisoning (Harding, 2002). The 95.5 percent of people use it; in urban areas 70.5 percent of arsenicosis situation in Bangladesh is no less than alarming. people use this source for their household drinking water. It is officially recognized by the Government of Bangladesh As mentioned earlier, 26.2 percent of people in urban that 50 percent of the population of 150 million people are areas use piped water that is run into their dwelling, yard, currently at risk of arsenic poisoning from ground water or plot. www.wsp.org 59 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.17 Percent distribution of drinking water sources 99.4 Improved 96.3 97 26.2 Piped water into dwelling/yard/plot 0.2 6 2.6 Public tap/stand pipe 0.2 0.7 70.5 Tube well 95.5 90 0.1 0.2 Protected dug well 0.2 0 Rain water 0.1 0.1 0.5 Unimproved 3.7 3 0 Unprotected dug well 0.6 0.3 0.1 Unprotected spring 0.1 0.1 0.1 Tanker truck/cart with small tank 0 0 0.3 Surface water 2.9 2.3 0.1 Bottled water 0 0 Urban Rural National Source: Bangladesh Demographic and Health Survey 2007. Table 3.10 Sources of household drinking water (in percent of households) Sources of drinking water Urban Rural Total Piped water into dwelling/yard/plot 26.2 0.2 6 Public tap/stand pipe 2.6 0.2 0.7 Tube well 70.5 95.5 90 Protected dug well 0.1 0.2 0.2 Rain water 0 0.1 0.1 Unprotected dug well 0 0.6 0.5 Unprotected spring 0.1 0.1 0.1 Tanker truck/cart with small tank 0.1 0 0 Surface water 0.3 2.9 2.3 Bottled water 0.1 0 0 Source: Ministry of Health and Family Welfare, 2007. 60 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.18 Domestic water-related economic impacts of inadequate sanitation, by residence 8,398 2,065 1,443 1,110 1,471 24 HH treatment Piped water Hauled water Rural Urban Source: Author’s estimates. Figure 3.18 and Table 3.11 show that the aggregate cost of water in Bangladesh are not sufficiently reliable to permit household water treatment is Tk. 9,841 million, which is estimating economic and financial impacts. 68 percent of the total economic cost related to domestic water.66 The cost due to piped water is Tk. 1,134 million Of the total costs of Tk. 9,841 million for domestic water (8 percent), and the cost of hauling cleaner water from treatment, rural residents bear Tk. 1, 443 million (15 percent) outside the household is Tk. 3,535 million (24 percent).67 and urban residents Tk. 8,398 million (85 percent).69 Again, The financial cost of household water treatment is Tk. 3,045 the financial costs of household treatment of drinking water million (73 percent), piped water attributable to sanitation make up 72 percent of total national impacts, 68 percent in is Tk. 1,134 million (27 percent).68 The data on bottled urban areas, and 5 percent in rural areas. Table 3.11 Domestic water-related economic impacts of inadequate sanitation, by location and type of impacts Economic (total) Financial (direct cost) Cost Percent of Percent of Cost Percent of Percent of (Tk. millions) national impacts total national (Tk. millions) national impacts total national in sub-category impacts in sub-category impacts Household treatment (national) 9,841 100% 68% 3,045 100% 73% Rural 1,443 15% 10% 210 7% 5% Urban 8,398 85% 58% 2,835 93% 68% Piped water (national) 1,134 100% 8% 1,134 100% 27% Rural 24 2% 0% 24 2% 1% Urban 1,110 98% 8% 1,110 98% 27% Hauled water (national) 3,535 100% 24% 0 100% 0% Rural 2,065 58% 14% 0 0% 0% Urban 1,471 42% 10% 0 0% 0% Total (national) 1,4510 100% 100% 4,179 100% 100% Total rural 3,531 24% 24% 234 6% 6% Total urban 10,979 76% 76% 3,945 94% 94% Source: Author’s estimates. 66 In 2009 prices, the cost is Tk. 11,317.15 million. 67 In 2009 prices, the cost of piped water is Tk. 1,304.1 million and cost of hauling cleaner water is Tk. 40,625.25 million. 68 In 2009 prices, the financial cost of household water treatment is Tk. 3,502 million and the cost of piped water used for sanitation is Tk. 1,304.1 million. 69 In 2009 prices, the total cost of HH water treatment is Tk. 11,317.15 million; share of rural area is Tk. 11,317.15 million, and share of urban area is Tk. 9,657.7 million. www.wsp.org 61 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.19 Percent of households using various drinking 17.50 water treatment methods 6.90 3.10 1.70 0 0 0.70 0.50 0.10 0.60 Electronic Ceramic, sand, Straining Bleach/ Boiling purified and filters through cloth chlorine Urban Rural Source: Bangladesh Demographic and Health Survey 2007. Household treatment of drinking water Of the total costs of Tk. 9,841.13 million for domestic The cost to households of treating drinking water arises from water treatment, rural residents bear Tk. 1,442.79 million the use of various drinking water treatment methods, which (14.66 percent) and urban residents Tk. 8,398.33 million primarily include boiling, use of bleach/chlorine, straining (85.34 percent).71 through cloth, and filtering with ceramic/sand filters. Figure 3.19 indicates that 17.5 percent of households in urban areas Reviewing the treatment costs by method, the costs of treat drinking water by boiling it, while a very insignificant boiling account for 88.61 percent (Tk. 8,720 million) of share of households (0.6 percent) in rural areas practice this household water treatment costs nationally, including 63.98 method. Although the total share of households using other percent (Tk. 523 million) of rural costs and 92.64 percent methods is not as high as that for the boiling method, the (Tk. 7,796 million) of urban costs (Figure 3.20).72 The cost percentages of urban households using different methods are of ceramic, sand, and other filtering methods makes up 6.61 higher than those for the rural households. percent (Tk. 651 million) of national costs, including 27.71 percent (Tk. 400 million) of rural and 2.99 percent (Tk. According to Table 3.12, the urban residents of Bangladesh 251 million) of urban costs.73 The cost of straining water incur a majority of the national household cost of water through cloth make up 3.84 percent (Tk. 378 million) treatment by boiling (Tk. 7,796 million, 89.41 percent), a of national water treatment costs, including 5.96 percent majority of the cost of using bleach/chlorine (Tk. 59 million, (Tk. 86 million) of rural costs and 3.47 percent (Tk. 292 63.73 percent), and a majority of the cost of straining million) of urban costs.74 A summary of the share of the through cloth (Tk. 292 million, 77.23 percent).70 water treatment cost is presented in Figure 3.21. Table 3.12 Economic impacts from treatment of household water due to inadequate sanitation (Tk. millions) Boiling Bleach/chlorine Straining through cloth Ceramic, sand, other filter Electronic purifier Total Total 8,720 93 378 651 0 9,842 Rural 923 34 86 400 0 1,443 Urban 7,796 59 292 251 0 8,398 Source: Author’s estimates. 70 In 2009 prices, it is Tk. 8,965 million for boiling, Tk. 67.85 million for chlorine, Tk. 335.8 million for cloth-filtration. 71 In 2009 prices, total cost is Tk. 11,318.3 million for household water treatment; for rural residents it is Tk. 1,659.45 million and for urban residents Tk. 9,675.9 million. 72 In 2009 prices, total cost of boiling water at the national level is Tk. 10,028 million; rural area cost is Tk. 611.8 million and urban area cost is Tk. 8,965 million. 73 In 2009 prices, total cost of ceramic and sand filtration is Tk. 748.5 million at the national level; rural area cost is Tk. 460 million and urban area cost is Tk. 288.5 million. 74 In 2009 prices, cost of cloth-filtration in rural areas is Tk. 98.3 million; in urban areas it is Tk. 335.8 million. 62 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.20 Percent distribution of annual economic impacts of various water treatment methods, by location (rural, urban, and national) 100% 80% 63.98% 60% 88.61% 92.84% 40% 20% 0% Bangladesh Urban Rural Electronic purified Ceramic, sand, and filter Straining through cloth Bleach/clorine Boiling Source: Author’s estimates. Figure 3.21 Percent Distribution of Annual Economic Impacts Among Rural and Urban Locations, by Water-Treatment Method 10.59% Cost of boiling 89.41% 36.27% Cost of bleach/clorine 63.73% 22.77% Cost of straining through cloth 77.23% 61.45% Cost of filter 38.55% Cost of electronic purifier 0% 0% 6.90% Monetary impact 93.10% 14.66% Economic cost 85.34% 0% 20% 40% 60% 80% 100% Rural Urban Source: Author’s estimates. www.wsp.org 63 Economic Impacts of Inadequate Sanitation in Bangladesh Figure 3.22 Percent distribution of cost of piped water due to inadequate sanitation among rural and urban households Rural, Tk. 24 million, 2% Urban, Tk. 1,110 million, 98% Source: Author’s estimates. Piped water Hauled water We know that urban people depend mostly on piped water, The economic cost of hauled water is higher for rural and the statistics support this claim. Since more people in households than for urban households. Of the total urban areas are using piped, the cost of piped water due to economic cost of hauled water in Bangladesh, rural inadequate sanitation in Bangladesh must be higher for urban households account for 58 percent, amounting toTk. households. The share of urban households in the total cost of 2,064.59 million. The remaining 42 percent is borne by piped water due to inadequate sanitation is 98 percent (Tk. urban households (Figure 3.23).76 1,110 million), while on the other hand rural households bear only a 2 percent share (Tk. 24 million) (Figure 3.22).75 Figure 3.23 Percent distribution of economic cost of hauled water among rural and urban households Urban, Tk. 1,470.71 million, 42% Rural, Tk. 2,064.59 million, 58% Source: Author’s estimates. 75 In 2009 prices, urban area bears Tk. 1,276.5 million and rural area bears Tk. 24 million. 76 In 2009 prices, rural area bears Tk. 2,374.28 million and urban area bears Tk 1,691.3 million. 64 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh ACCESS TIME IMPACTS facilities. Of those, 10.2 percent have a flush or pour-flush toilet connected to a septic tank and 13.2 percent have a pit Current status latrine with a slab. Figure 3.24 suggests that 59 percent of the population in Bangladesh is defecating in open places, unhygienic latrines, The rates of open defecation are comparatively high in the or shared toilets. This rate is higher in rural areas than in rural areas, where only 0.2 percent of residents have toilets urban areas. So in order to achieve 100 percent participation connected to a sewer and 25.2 percent households have in good sanitation, the relevant policies should be mainly any kind of improved toilet. In urban areas 40.2 percent targeted toward rural areas. of households have improved flush toilets and 6 percent are connected to a sewer. Lacking access to an improved toilet, An estimated 71.4 percent of the households in Bangladesh many people defecate in the open in both rural and urban do not have improved toilet facilities (Table 3.13). Of these, areas; wasting time, risking bad weather and embarrassment, 7.5 percent do not have any toilet facility, 37.3 percent use and endangering their security, including exposure to pit latrines without slabs or open pits, and the remaining poisonous snakes. 26.6 percent have access to facilities that are either shared or unimproved. On the other hand, an estimated 28.5 percent An estimated 29 million persons (21 percent of the of households in Bangladesh do have improved toilet population) defecate in open places, 26 million (18 percent) Figure 3.24 Percent of population defecating in open places or using shared toilets 70% 60% 59% 50% 45% 40% 30% 20% 13% 10% 0% Bangladesh Urban Rural Source: Barkat et al., 2009; Ministry of Health and Family Welfare, 2007; and author’s estimates. www.wsp.org 65 Economic Impacts of Inadequate Sanitation in Bangladesh of them rural residents and 3 million (2 percent) of them (11 percent) urban residents. Therefore, 83 million people urban residents. People using shared toilets number 54 (59 percent) either defecate in the open or use shared toilets, million nationally (38 percent of the total population); 38 64 million (45 percent) of them rural residents and 19 million (27 percent) of them rural residents and 16 million million (13 percent) of them urban residents (Table 3.14). Table 3.13 Percent distribution of household access to various types of toilet, urban vs. rural Sources of drinking water improved, not shared Urban Rural National 40.2 25.2 28.5 Flush/pour-flush to piped sewer system 6 0.2 1.5 Flush/pour-flush to septic tank 21.7 6.9 10.2 Flush/pour-flush to pit latrine 4.3 3.5 3.7 Pit latrine with slab 8.2 14.6 13.2 Unimproved facility 59.8 74.8 71.4 Any facility shared with other households 19.9 11.5 13.4 Flush/pour-flush but not connected to sewer/septic 13.5 0.6 3.5 tank/pit latrine Pit latrine without slab/open pit 19.5 42.3 37.3 Bucket 0.1 0.1 0.1 Hanging toilet/hanging latrine 5.1 11.1 9.8 No facility/bush/field 1.7 9.1 7.5 Source: Ministry of Health and Family Welfare, 2007; and author’s estimates. Table 3.14 Number of persons and percent of population defecating in the open and using shared toilets, urban vs. rural Population Persons defecating in the open Persons using shared toilets Million Percent of population Million Percent of population Total 29 21% 54 38% Rural 26 18% 38 27% Urban 3 2% 16 11% Source: Barkat et al., 2009; BDHS 2007; and author’s estimates. 66 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh A welfare loss can be incurred due to lack of good toilet Access time for accessing toilets facilities. Insufficient access to good toilets can result in loss This research estimates that an extra 5,119 million hours of time, comfort, convenience, security, dignity, and status, are spent accessing open defecation sites and shared toilets. and it can also lead to conflicts within the community. These The economic cost of this lost access time is estimated to losses are felt more heavily by women and girls. We have be Tk. 30,112 million.77 Of that total, 3,472 million hours therefore estimated losses from inadequate sanitation in and Tk. 17,365 million (57 percent) in costs are due to the schools and in workplaces, though these estimates are made extra time used in accessing open defecation sites, and 1,647 only for losses by girls aged 11 to 17 in schools without girls’ million hours and Tk. 12,747 million (43 percent) in costs toilets and for working women due to absence from work are due to the extra time used in accessing shared toilets during menstrual periods. (Figures 3.25 and 3.26).78 Figure 3.25 Access time lost due to inadequate sanitation 4,000 3,000 Million hour 2,000 3,171 1,167 1,000 301 480 - Open defecation Shared toilet Rural Urban Source: Author’s estimates. Figure 3.26 Economic cost of access time lost due to inadequate sanitation 20,000 16,000 12,000 13,442 Million Tk. 6,583 8,000 4,000 6,164 3,923 0 Open defecation Shared toilet Rural Urban Source: Author’s estimates. 77 In 2009 prices, it is Tk. 34,628.8 million. 78 In 2009 prices, extra time used in accessing open defecation and shared toilets cost is Tk. 19,969.75 million and Tk. 14,659.05 million, respectively. www.wsp.org 67 Economic Impacts of Inadequate Sanitation in Bangladesh Rural residents bear a substantial 77 percent (Tk. 13,442 School and workplace sanitation-related impacts million) of the time costs of accessing open defecation sites, The economic cost of inadequate sanitation in schools and and urban residents bear the remaining 23 percent (Tk. workplaces, due to the loss of student and worker time, is 3,923 million).79 In the case of shared toilets, urban residents estimated to be Tk. 853.37 million for girls and Tk. 813.96 bear 48 percent (Tk. 6,164 million) and rural residents bear million for working women, totaling Tk. 1,667.33 million.81 the remaining 52 percent (Tk. 6,583 million) of the time For rural girls and women the cost adds up to Tk. 910.14 cost (Table 3.15).80 million (54.59 percent), and for urban girls and women it adds up to Tk. 757.19 million (45.41 percent) (Figure 3.27 and Table 3.16).82 Table 3.15 Economic cost of extra time spent in accessing open defecation sites and shared toilets, urban vs. rural Open defecation Shared toilets Total cost of access time Tk. million Percent Tk. million Percent Tk. million Percent Total 17,366 100% 12,746 100% 30,112 100% Rural 13,442 77% 6,583 52% 20,025 67% Urban 3,923 23% 6,164 48% 10,087 33% Source: Author’s estimates. Figure 3.27 lower bound of economic cost of inadequate sanitation in schools and workplaces 900 433 477 800 700 600 Million Tk. 500 400 300 200 420 337 100 0 Girls’ absence at school Women’s absence at workplace Rural Urban Source: Author’s estimates. 79 In 2009 prices, rural area bears Tk. 4,511.45 million and urban area bears Tk. 15,458.3 million. 80 In 2009 prices, urban area’s share is Tk. 7,088.6 million and rural area’s share is Tk. 7,570.45 million. 81 In 2009 prices, the figures are Tk. 981.38 million for school girls and Tk. 936.05 million for working women, totaling Tk.1,917.43 million. 82 In 2009 prices, rural area bears Tk. 1,046.7 million and urban area bears Tk. 870.77 million. 68 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh Table 3.16 Lower bound of economic cost of inadequate sanitation in schools and workplaces, urban vs. rural Economic loss (Tk. million) Percent Urban Rural Total Urban Rural Girls’ absence from school 420 433 853 49% 51% Women’s absence from work 337 477 814 41% 59% Total 757 910 1,667 45% 55% Source: Author’s estimates. SENSITIVITY ANALYSIS Using the input values for low, base, and high estimates million (equivalent to 3.7 percent of GDP), the high-case of inadequate sanitation in Bangladesh (see Table 2.34 in estimate is Tk. 813,006 million (equivalent to 17.2 percent Chapter 2), Figure 3.28 shows that the low-case estimate for of GDP), and the base-case estimate is Tk. 295,476 million the economic impact of inadequate sanitation is Tk. 176,510 (equivalent to 6.3 percent of GDP).83 Figure 3.28 Low, base, and high-case estimates for total economic impacts of inadequate sanitation 20.0% 813,006 900,000 16.0% 700,000 As percent of GDP 17.2% 12.0% 500,000 8.0% 295,476 300,000 176,510 4.0% 6.3% 3.7% 100,000 0.0% Low Base High (in million Taka) Tk milliom % of GDP Source: Author’s estimates. Figure 3.29 Low, base and high-case estimates for health, water, and access time economic impacts of inadequate sanitation Access time High 149.2 Base 31.8 Low 17.1 High 30.9 Water Base 14.5 Low 9.8 High 632.9 Health Base 249.2 Low 149.6 0 100 200 300 400 500 600 700 (in billion Taka) Billion Tk. Source: Author’s estimates. 83 In 2009 prices, the low-case estimate is Tk. 202,986.5 million (equivalent to 3.30 percent of 2009 GDP), the high-case estimate is Tk. 934,956.9 million (equivalent to 15.2 percent of 2009 GDP), and the base-case estimate is Tk. 339,797.4 million (equivalent to 5.52 percent of 2009 GDP). www.wsp.org 69 Economic Impacts of Inadequate Sanitation in Bangladesh POTENTIAL GAINS FROM SANITATION AND per capita.85 Interventions that increased access to safe HYGIENE INTERVENTIONS quality water could have led to gains worth Tk. 110,559 Estimates show that improved hygiene behavior could million (equivalent to 2.3 percent of GDP) or Tk. 775 have resulted in gains of an estimated Tk. 143,913 per person. Much water contamination occurs due to million (equivalent to 3.0 percent of GDP), or improper containment and disposal of fecal matter; Tk. 1,009 per person (See Table 3.17, a duplication of interventions that aimed at safe confinement and disposal Table 3.3 reproduced here for convenience).84 Improved of fecal matter after appropriate sewage treatment would sanitation could have led to gains of Tk. 111,519 have generated gains of Tk. 93,116 million (equivalent to million (equivalent to 2.4 percent of GDP) or Tk. 782 2 percent of GDP) or Tk. 653 per person.86 Table 3.17 Potential economic gains from sanitation and hygiene interventions Interventions Million Tk. Million US$ Percent Percent of Per-capita Per-capita of GDP economic impacts gains (Tk.) gains (US$) Gains for sanitation Sanitation and 158,423 2,263 3.4% 54% 1,111 15.9 + hygiene hygiene combined interventions Sanitation alone 111,519 1,593 2.4% 38% 782 11.2 Improved hygiene 143,913 2,056 3.0% 49% 1,009 14.4 behavior Water free from Improved access to 110,559 1,579 2.3% 37% 775 11.1 bacteriological safe water contamination Safe confinement and disposal of fecal 93,116 1,330 2.0% 32% 653 9.3 matter (sewage treatment) Source: Author’s estimates. 84 In 2009 prices, gain will be Tk. 165,500 million (equivalent to 2.69 percent of 2009 GDP), or Tk. 1,160.35 per person. 85 In 2009 prices, gain will be Tk. 128,246.85 million (equivalent to 2.09 percent of 2009 GDP), or Tk. 899.3 per capita. 86 In 2009 prices, gain will be of Tk. 107,083.4 million (equivalent to 1.74 percent of 2009 GDP), or Tk. 750.95 per person. 70 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh 4. Conclusion and Lessons Learned SUMMARY OF IMPACTS and the cost due to hauling cleaner water from outside the household premises is Tk. 3.54 billion (24 percent).94 Total economic impacts The financial cost of household water treatment is This report estimates that inadequate sanitation has Tk. 3.04 billion (73 percent), and the cost of piped substantial economic impacts in Bangladesh. The annual water attributable to sanitation is Tk. 1.13 billion (27 economic impact of inadequate sanitation is estimated to percent).95 be Tk. 295.48 billion, equivalent to $4.23 billion.87 This impact is equivalent to 6.3 percent of Bangladesh’s GDP.88 Access time impacts The estimated cost stemming from lost access time is equal Health impacts to Tk. 31.78 billion.96 An extra 5,119 million hours are The total health impact of inadequate sanitation is equal spent accessing open defecation sites and shared toilets (in to Tk. 249,186 million, which is 84 percent of the total 2007). The economic cost of this lost time is estimated at economic impact and equivalent to 5.3 percent of GDP Tk. 30.11 billion.97 Of that total, 3.47 billion hours and in 2007.89 Of the total health-related impact, 13 percent Tk. 17.36 billion (57 percent) in costs are due to the extra (Tk. 31,941 million) consists of productivity losses.90 time used in accessing open defecation sites, and 1,647 The costs of treatment for illnesses makes up another 9 million hours and Tk. 12.75 billion (43 percent) in costs percent (Tk. 22,144 million) and the costs (loss) due are due to the extra time used in accessing shared toilets.98 to premature deaths makes up 78 percent (Tk. 195,101 Separately, the economic cost of inadequate sanitation in million).91 Deaths, treatment cost, and productivity losses schools and workplaces due to the loss of time is estimated from diarrhea alone have the largest impacts in each of to be Tk. 853.37 million for girls and Tk. 813.96 million these categories. for working women, totaling Tk. 1.67 billion.99 Domestic water impacts Potential gains from sanitation and The total domestic water impact of inadequate sanitation hygiene interventions is equal to Tk. 14.51 billion.92 The cost of household Estimates show that improved hygiene behavior could have water treatment is Tk. 9.84 billion, which is 68 percent resulted in gains of Tk. 143,913 million (equivalent to 3.0 of the total economic cost related to domestic water.93 The percent of GDP), or Tk. 1,009 per person.100 Improved cost due to piped water is Tk. 1.13 billion (8 percent), sanitation could have led to gains of Tk. 111,519 million 87 In 2009 prices, it is Tk. 339.802 billion, equivalent to $4.85. 88 In 2009 prices, it is 5.52 percent of the GDP in 2009. 89 In 2009 prices, it is Tk. 286,563.9 million and 4.66 percent of GDP in 2009. 90 In 2009 prices, it is Tk. 31,941 million. 91 In 2009 prices, costs of treatment is Tk. 22,144 million and the impact of premature deaths is Tk. 195,101 million. 92 In 2009 prices, it is Tk. 16.69 billion. 93 In 2009 prices, the economic cost is Tk. 11.316 billion. 94 In 2009 prices, the costs due to piped water is Tk. 1.3 billion and due to cloth-filtration is Tk. 4.071 billion. 95 In 2009 prices, the financial cost of household water treatment is Tk. 3.5 billion and the cost of piped water for sanitation is Tk.1.3 billion. 96 In 2009 prices, it is Tk. 36.5 billion. 97 In 2009 prices, it is Tk. 34.63 billion. 98 In 2009 prices, the economic cost for accessing open defecation sites is Tk. 19.964 billion and for accessing shared toilets it is Tk. 14.7 billion. 99 In 2009 prices, the economic cost of inadequate sanitation for girls is Tk. 981.4 million and for women 936.04 million, totaling Tk. 1.9205 billion. 100 In 2009 prices, it is Tk. 165,499.95 million (equivalent to 2.69 percent of 2009 GDP), or Tk. 1,160.35 per person. www.wsp.org 71 Economic Impacts of Inadequate Sanitation in Bangladesh (equivalent to 2.4 percent of GDP), or Tk. 782 per capita.101 education outreach. In primary schools, for example, Interventions that increased access to safe quality water could children should be educated about safe water, sanitation, have led to gains worth Tk. 110,559 million (equivalent to and personal hygiene. They should also be trained and 2.3 percent of GDP) or Tk. 775 per person.102 Interventions encouraged to disseminate what they have learned to other that aimed at safe confinement and disposal of fecal matter children and to their families and communities so that after appropriate sewage treatment would have generated the information and good practice spread throughout the gains of Tk. 93,116 million (equivalent to 2 percent of population. There is also a need to give primary stakeholders GDP) or Tk. 653 per person.103 the knowledge and the means to make informed choices about hygiene practices and water and sanitation facilities, KEY LESSONS LEARNED including options for safe disposal of excreta. A functioning 1. Increased investment in water and sanitation institutional framework must be in place in order to support is needed. these needs. It is important to ensure that every household has access to sanitary latrines within easy distance, including in urban 4. Local government needs to have a more areas, by promoting multiple technology options ranging proactive role. from pit latrines to water-borne sewerage systems, with a It is absolutely necessary to build the capacity of local special focus on supporting households in transitioning governments and communities so they can deal more from very basic latrines to sustainable options. The increased effectively with problems relating to water supply and investment should also aim to install public latrines in sanitation. The structure of local governments should be schools, bus stations, and important public places, as well as strengthened by establishing and/or proactivating water and community latrines in densely populated poor communities sanitation committees. This can empower people to take that lack sufficient space for individual household latrines. It sustained action at a local level. is also very important to ensure proper storage, management, and use of surface water and to prevent its contamination. 5. Relevant health interventions are needed, especially for rural children. 2. A comprehensive communication campaign This study documents the fact that health-related losses, is needed. specifically mortality and morbidity due to diarrheal disease, Bangladesh’s progress in sanitation has been largely due to are the single largest contributors to the financial and economic social action mobilized by a communications campaign. impact of inadequate sanitation. Therefore, to mitigate the While there has been an admirable use of a wide variety of ill effects of inadequate sanitation, relevant and significant communication materials, standardization and uniformity health interventions are needed. Interventions should be have been missing, and the materials have often been used in made with attention to equity, special emphasis being given an ad hoc fashion without a systematic and reinforcing media to poor rural people, particularly children, and people living plan. Therefore, to improve the situation further, a more in hard-to-reach areas like the haor and char regions. Health dynamic communications strategy, including a comprehensive interventions should be executed by grassroots-level facilities, media plan, is needed to mobilize communities. such as the Thana health complex, community clinics, satellite clinics, and family welfare centers. 3. Effective and replicable hygiene education intervention strategies are needed. 6. Strategies need to be made complementary. Effective and replicable hygiene education outreach strategies Complementary strategies should be developed to address to promote behavior change are needed. It is imperative to rural sanitation, hygiene, and water needs. Such strategy develop and assess different models for health and hygiene development can happen by: 101 In 2009 prices, it is Tk. 128,246.85 million (equivalent to 2.08 percent of 2009 GDP), or Tk. 899.3 per capita. 102 In 2009 prices, it is Tk. 127,142.85 million (equivalent to 2.06 percent of 2009 GDP), or Tk. 891.25 per person. 103 In 2009 prices, it is Tk. 107,083.4 million (equivalent to 1.74 percent of 2009 GDP), or Tk. 750.95 per person. 72 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh • Informing and supporting the choices of individuals l enhancing the national policy and by using an appropriate mix of mass media and legislation, and interpersonal communication. • Developing sanitary engineering and safe water l promoting good governance in order to engineering solutions, based on an understanding enable local government—particularly of good practices in hydrogeology and geochemistry. the DPHE, the Union and Upazila This will ensure Parishads, and WatSan committees—to l an adequate supply of safe and respond to the needs of the community. affordable water, 7. Progress needs to be closely monitored. l good practice in the control and mitigation Progress toward achieving the MDG water and sanitation of pollution, targets needs to be closely monitored. This should l addressing users’ preferences, and be done and reported out to the country as a whole: levels of access to safe water and adequate sanitation; l monitoring of water supplies and sanitation. how much governments are allocating to water and sanitation; what external support they are receiving; • Bringing building management practices into a more their capacity to meet the challenge of achieving the supportive institutional framework at both national targets; and highlights to warn when and where progress and local levels by is lagging. www.wsp.org 73 Economic Impacts of Inadequate Sanitation in Bangladesh Annex A: Algorithms A1: Total loss A3: Water-related loss due to poor sanitation Total loss due to poor sanitation: Total cost for treating drinking water: L = HL + WL + UL Total health-related loss due to poor sanitation: Cost of treating drinking water for mth method: HL = HL_PD + HL_T + HL_P Total water-related loss due to poor sanitation: Total cost of piped water: WL = WL_DWT + WL_PW + WL_WF Total user preference loss due to poor sanitation: Total cost for fetching drinking water: UL = UL_AT + UL_AS + UL_AW A2: Health-related loss due to A4: User preference loss due to poor sanitation poor sanitation Total cost of premature death due to poor sanitation: Cost of access time for unimproved latrine: Cost of premature death for ith disease: Cost of days absent from school: Total treatment cost related to poor sanitation: Cost of days absent from work: Treatment cost for ith disease: Total productivity loss due to poor sanitation: Productivity loss for ith disease: 74 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh A5: Variables Table: Variables Symbol Description L Total loss due to poor sanitation L Total loss due to poor sanitation HL Total health-related loss due to poor sanitation WL Total water-related loss due to poor sanitation UL Total user preference loss due to poor sanitation HL_PD Cost of premature death from diseases attributable to poor sanitation HL_T Cost of treatment of all diseases attributable to poor sanitation HL_P Cost of productivity loss from diseases attributable to poor sanitation WL_DWT Cost of treating drinking water WL_PW Cost of piped drinking and non-drinking water WL_WF Cost of fetching clean water UL_AT Cost of access time for open defecation and using shared latrine UL_AS Cost of days absent from school UL_AW Cost of days absent from work pop Total population 〖uhealth〗_ih Unit price of treatment for ith disease and hth health provider 〖dh〗_i Duration of ith disease 〖vtime〗_j Value of time per day for jth age group 〖death〗_ij Number of premature death for ith disease and jth age group 〖vdeath〗_j Value per premature death for jth age group 〖pop_ul〗_j Population having unimproved latrine by age group taccess Average access time per day per person for using unimproved latrine egirls Number of girls aged 11-19 years attending secondary school days Days missed from school by the girls vstime Value of time per day missed from school ewomen Number of working women dayw Days missed from work by the women vwtime Value of time per day missed from work 〖HH〗_m Number of households using mth treatment method cdwater Consumption of drinking water per household 〖udwater 〗_m Unit price per 1 liter drinking water using mth treatment method 〖HH〗_p Number of households using piped water cwater Consumption of water per household 〖uwater 〗_p Unit price per 1 liter piped water 〖HH〗_f Number of households fetching drinking water ftime Average fetching time per household per day vtime Value of time per day www.wsp.org 75 Economic Impacts of Inadequate Sanitation in Bangladesh Table: Parameters δ Symbol Description α_ij Incidence rate per person for ith disease and jth age group δ β_i Proportion of cases attributable to poor sanitation τ_ih Proportion of cases treated for ith disease and hth health provider ω_ij Proportion of death attributable to poor sanitation μ Proportion of school without separate toilet for girls Proportion of women missed days from work due to poor sanitation ∆ Water pollution attributable to poor sanitation Table: subscripts Code Description Components i Disease type Diarrhea, malaria, ALRI (etc.)w j Age group < 5 years, 5-14 years and 15+ h Treatment provider Treated at medical facility, at pharmacy, or by traditional treatment m Treatment method Boiling, bleaching, straining through cloth, or using filter 76 Bangladesh Impact Study Economic Impacts of Inadequate Sanitation in Bangladesh References Barkat, A., and A. 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The study aims to provide evidence that supports sanitation advocacy, elevates the profile of sanitation, and acts as an effective tool to convince governments to take action. The first study completed in Southeast Asia found that the economic costs of poor sanitation and hygiene amounted to over US$9.2 billion a year (2005 prices) in Cambodia, Indonesia, Lao PDR, the Philippines, and Vietnam. Its second phase analyzes the cost-benefit of alternative sanitation interventions and will enable stakeholders to make decisions on how to spend funds allocated to sanitation more efficiently. Due to the study’s successful traction, WSP carried out ESI studies in Bangladesh, India, and Pakistan. ESI studies are also planned for countries in the Latin America and the Caribbean region, as well as several countries in Africa. www.wsp.org 79 WSP FUNDING PARTNERS The Water and Sanitation Program (WSP) is a multi-donor partnership created in 1978 and administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. WSP provides technical assistance, facilitates knowledge exchange, and promotes evidence-based advancements in sector dialog. WSP has offices in 25 countries across Africa, East Asia and the Pacific, Latin America and the Caribbean, South Asia, and in Washington, DC. WSP’s donors include Australia, Austria, Canada, Denmark, Finland, France, the Bill and Melinda Gates Foundation, Luxembourg, Netherlands, Norway, Sweden, Switzerland, the United Kingdom, the United States, and the World Bank. Water and Sanitation Program E-32, Sher-e-Bangla Nagar, Agargaon, Dhaka Phone: (+880-2) 8159091-14 E-mail: wspsa@worldbank.org Web site: www.wsp.org, www.worldbank.org.bd