Global Majority E-Journal
Volume 3, Number 2
(December 2012)
Global Majority E-Journal
About the Global Majority E-Journal
The Global Majority E-Journal is published twice a year and freely available online at:
http://www.american.edu/cas/economics/ejournal/. The journal publishes articles that discuss
critical issues for the lives of the global majority. The global majority is defined as the more than
80 percent of the world’s population living in developing countries. The topics discussed reflect
issues that characterize, determine, or influence the lives of the global majority: poverty,
population growth, youth bulge, urbanization, lack of access to safe water, climate change,
agricultural development, etc. The articles are based on research papers written by American
University (AU) undergraduate students (mostly freshmen) as one of the course requirements for
AU’s General Education Course: Econ-110—The Global Majority.
Editor
Dr. Bernhard G. Gunter, Adjunct Associate Professor, Economics Department, American
University; Washington, DC; and President, Bangladesh Development Research Center (BDRC),
Falls Church, VA, United States. The editor can be reached at gunter@american.edu.
Cover Design
Based on an animated GIF available as Wikimedia Commons, created in 1998 by Christian
Janoff, showing the “Globe” demonstration as it can be found on the Commodore REU
1700/1750 test/demo disk; please see: http://en.wikipedia.org/wiki/File:Globe.gif.
ISSN 2157-1252
Copyright © 2012 by the author(s) for the contents of the articles.
Copyright © 2012 by American University for the journal compilation.
All rights reserved. No part of this publication may be reproduced, stored or transmitted in any
form or by any means without the prior permission in writing from the copyright holder.
American University, the editor and the authors cannot be held responsible for errors or any
consequences arising from the use of information contained in this journal. The views and
opinions expressed are those of the authors and should not be associated with American
University.
73
Global Majority E-Journal
Volume 3, Number 2 (December 2012)
Contents
Chinese Urbanization: Efforts to Manage the Rapid Growth of Cities
Janina Calabro
75
How the Lack of Access to Safe Water and Sanitation Hampers
Growth and Development: The Case of Peru
Emily Platt
86
Rural Poverty in Honduras: Despite Progress, an Ongoing Challenge
Carlos Andréu
100
Water in Ethiopia: Drought, Disease and Death
Morgan Hendrix
110
74
Global Majority E-Journal, Vol. 3, No. 2 (December 2012), pp. 75-85
Chinese Urbanization: Efforts to
Manage the Rapid Growth of Cities
Janina Calabro
Abstract
China has experienced rapid levels of urbanization in recent years. Urbanization has lifted many
out of poverty and helped to raise GDP per capita, ultimately bettering the living standards for
millions of people in China. Although there are many positive results from recent urbanization,
China faces a problem of unsustainability. Urbanization has lead to pollution, income inequality,
water scarcity and high levels of energy use. It is questioned whether China can properly deal
with these negative side effects while sustaining economic growth and overall prosperity. This
article reviews the empirical background of China and discusses positive outcomes as well as
negative implications of urbanization. Furthermore, it examines some strides China has already
made in managing urban growth. The article comes to the conclusion that China has
successfully set up programs and institutions that may potentially lead to economic
sustainability, but suggests that these programs must be strengthened to increase their potential.
I.
Introduction
China’s urbanization started some 4,000 years ago and has come a long way. During the last
three decades, China has achieved rapid economic growth and massive industrialization,
supported by urbanization. Although China has accomplished amazing economic success, it also
faces many challenges. It has to take necessary strides to control pollution, water scarcity, and
negative side effects of urban expansion. It needs to develop plans to ensure economic
sustainability. Although many applaud China on their great success in urbanization, this country
now has to create the proper institutions to ensure sustainability of its success.
Following this introduction, this article first summarizes some major publications concerning
China’s urbanization. It then reviews the empirical background of China such as its population
growth, economic growth, life expectancy, and some statistics regarding the implications of
industrialization in China. It then analyzes some of the main negative implications of China’s
industrialization, which include a sharp increase in energy use, pollution and income inequality.
75
Before providing some conclusions, this article outlines some of China’s efforts to manage rapid
industrialization.
II.
Literature Review
There are many publications that provide information on the positive and negative aspects of
China’s urbanization. It is often debated whether urbanization directly leads to economic growth
or if this is a common misconception. The following three recent publications discuss a variety
of these issues.
First, Xuemei Bai, Jing Cheng and Peijun Shi (2012) uncover a theory that urbanization in China
spills over to other non-developed regions and contributes to overall economic prosperity. They
argue that the accelerated urbanization in China has led to increased economic development and
decreased income disparity. In these authors’ analysis of this relationship, they found that larger
and richer cities gain more income than poorer or smaller cities and that there is a long-term
connection between urban built-up expansion and GDP per capita at the city and provincial level,
and a short-term causality at the provincial level. This overall suggests “a positive feedback
between landscape urbanization and urban and regional economic growth in China.”1 In
layman’s terms, urbanization in China is found by these authors to lead to direct economic
growth in the cities, as well as spillover in the non-city regions. In response to this increased
urbanization in China, Bai, Cheng and Shi (2012, p. 37) predict “it might be difficult for China to
control urban expansion without sacrificing economic growth.” This is a commonly proposed
downfall of China’s urbanization. They also question how China will sustain their growth once
urbanization will reach its limit.
The second article by Jie Chen (2007), entitled “Rapid Urbanization in China: A Real Challenge
to Soil Protection and Food Security”, is about the threat of urban expansion into rural land. This
is a very pressed issue and one that is constantly brought up when one considers China’s ability
to sustain growth. Chen cautions that maintaining rapid urbanization is maintaining some other
downfalls that come with it. There is widespread concern over the increased expansion of urban
development into agricultural land. Chen (2007) expresses that accelerated urban use of
productive soil landscapes may threaten food security and environment sustainability. Chen also
notes that some optimistically believe that with good planning and management, a significant
increase in urban population can be accommodated by limited increase of land area. The
question is if China will develop enough planning and management to ensure that its growth will
be sustainable. Another large concern related to rapid urban development is pollution.
The article by Bingheng Chen et al. (2011) illustrates some major pollution issues that China
faces. They write that pollution is one of the greatest downfalls that China is currently
experiencing and that maintaining urbanization is maintaining the pollution that often comes
with cities. They also reveal the fact that air pollutants in China are at high levels when
compared to the rest of the world. However, China is taking strides to control this particular
causation of their urbanization. China has a Ministry of Environmental Protection who released
an index for controlling/reducing sulfur dioxide (SO2) emissions, which is a concern in China. In
2007, these emissions declined for the first time, revealing the control China has over the
situation.
1
Bai, Cheng and Shi (2012), p. 137.
76
III.
Empirical Background
Urbanization is generally defined as an increase in the urban share of total population in a
country. Therefore, it is important to look at how China’s urban population has developed over
the years, as well as how their whole population has grown. China’s economy has grown
alongside its urban population, suggesting a positive relation between urban growth and
prosperity in China. It is interesting to look at increases in GDP as well GDP per capita. Also, it
is interesting to see if growth in income positively affects Chinese life. High levels of
industrialization tend to come with urbanization. As more people move to the urban areas, more
needs to be built to accommodate people and business. More industry can lead to negatives such
as higher carbon dioxide (CO2) emissions.
III.1. China’s Urban Population Growth
China’s total population is currently about 1.34 billion. As seen in Figure 1, while the rural
population has reached its maximum in 1993, the urban population continues to grow sharply.
Indeed, within the last twenty years (1989-2009), China’s urban population almost doubled. Of
the 670 cities China had in 2007, 89 had a population of over one million people. In comparison,
the United States has about 37 cities of similar size, and India has about 32 cities of similar size
(World Bank, 2008). The World Bank (2008) also projects that by 2025 about 64 percent of
China’s population will live in cities.
Figure 1: China’s Rural and Urban Population, 1960 -2009
Source: Created by author based on World Bank (2011).
III.2. Economic Growth
In their extended research of urbanization in China, researchers Xuemei Bai, Jing Chen and
Peijun Shi (2012, p. 132) conclude that “if measured by a landscape indicator, [urbanization]
does has a causal effect on economic growth in China, and that urban land expansion is not only
the consequence of economic growth in cities, but also drivers of such growth.” This is to say
77
that urbanization and economic growth evolve in a circle that economic growth leads to urban
land expansion and in return urban land expansion leads to more economic growth.
Expressed in current U.S. dollars, China’s GDP amounted to US$5.0 trillion in 2009. Ten years
earlier, it amounted to only US$1.1 trillion (World Bank, 2011). In real terms, China’s average
annual GDP growth rate during 1999-2009 was 10.0 percent. Taking population growth into
account, GDP per capita stood at US$865 in 1999, which increased to US$3,744 in 2009, see
Figure 2. These increases in per capita income are said to have lifted more than 400 million
people out of poverty.
Figure 2: GPD per capita (current US$)
Source: Created by author based on World Bank (2011).
III.3. Progress in Life Expectancy
This increase in income per capita should also positively reflect on the quality of life in China.
For example, life expectancy (see Figure 3) has also increased significantly. Specifically looking
at the experience during the last ten years of available data, average life expectancy at birth
increased from 71.0 years in 1999 to 73.3 years in 2009 (World Bank, 2011).
Figure 3: Life Expectancy at Birth
Source: Created by author based on World Bank (2011).
78
IV.
Negative Implications of China’s Urbanization
Increased urbanization and GDP growth are not all positive. They come with many negative side
effects. Rapid increases in pollution, energy use, emissions of carbon dioxide and water scarcity
are four major issues that China is facing today as a result of urbanization and GDP growth.
Furthermore, there also are some indications of increases in income inequality, which may
threaten China’s social fabric.
IV.1. Pollution in China2
A sharp increase in the level of dangerous pollutants in the air is extremely detrimental to health
in China as well as the health of the world’s environment. Cases of lung disease and respiratory
system problems have increased during the last few decades. According to the World Bank
(2007, p. xiii), “the economic burden of premature mortality and morbidity associated with air
pollution was 157.3 billion yuan in 2003, or 1.16 percent of GDP.”
China’s emissions of sulfur dioxide (SO2) are the largest in the world. SO2 emissions due to
increased fossil fuel use, mainly leads to acid rain. Acid rain damages crops and materials,
resulting in a cost of 30 billion yuan in lost crops and 7 billion in damaged materials. This
reveals that pollution, caused by urbanization, is reflecting on the lives of the rural population,
which is typically much poorer than the urban population. The damaged crops amount to 1.8
percent of the total value of agricultural output.
Another major concern of pollution in China involves water pollution. By 2005, about half of the
seven main rivers in China were polluted and regarded unsafe to consume. In rural China, some
115 million people rely on these waters as drinking water. It is also estimated that around 11
percent of cancer cases in digestive system can be attributed to polluted drinking water. The cost
of water pollution due to water scarcity is about 147 billion yuan or about 1 percent of GDP. The
cost of irrigation with polluted water is about 7 billion yuan per year (or 0.05 percent of GDP),
and the cost of water pollution in commercial fisheries is approximately 4 billion yuan per year
(about 0.03 percent of GDP).
The health and non-health cost of outdoor air and water pollution for China's economy comes to
around US$100 billion a year. It is arguable that urbanization has brought much more economic
prosperity than the pollutants from it are costing. However, it is difficult to put a cost on
someone’s health as well as the health of our world.
IV.2. Energy Use
Especially in the last decade, Chinese energy use has increased majorly, see Figure 4. Urban
residents use 3.6 times as much energy as rural residents do, and the energy intensity in China,
which is expressed by the consumption of energy per unit of GDP, is 7 times the amount it is in
Japan and 3.5 times the amount it is in the United States (World Bank, 2008). These basic
statistics show how extreme energy use is in China compared to some industrialized countries.
These numbers are extraordinary and suggest that China needs to start conserving resources in a
better manner.
2
This sub-section is based on World Bank (2007).
79
Figure 4: Energy Use (kilo tons of oil equivalents)
Source: Created by author based on World Bank (2011).
IV.3. Increases in CO2 Emissions
Another main problem of China’s urbanization process has been the emissions of carbon dioxide
(CO2). As shown in Figure 5, some 30-40 years ago, China’s CO2 emissions were around one
metric ton per capita; in 2008 it was measured to be around 5. This is a huge increase and China
is faced with the challenge to control the emission of CO2 that come with industrialization.
Figure 5: CO2 Emissions (Metric Tons per capita), 1960-2007
Source: Created by author based on World Bank (2011).
IV.4. Growing Scarcity of Water
About 1.1 billion people lack access to clean water today (United Nations Development
Programme, 2006). Water is a shared resource across all nations and it is everyone’s
80
responsibility to learn how to treat water as a valuable resource and reallocate it more efficiently.
Urban development in China has resulted largely in huge amounts of water consumption. China
uses six times more water per unit of GDP than Korea and ten times that of Japan (Shalizi, 2008,
p. 166). However, as Figure 6 shows, water availability per person has been decreasing in
China. Today, China’s per capita availability of water is about one third of the world’s average at
6,794 cubic meters per person, or one quarter of the U.S. average of 9,446 cubic meters per
person (World Bank, 2007).
The combination of using a lot of water while having relatively few water sources implies that
China is facing a severe water crisis. In 2000, the total water shortage was 38.8 billion cubic
meters. Since then, the situation has only gotten worse. It is projected that the shortage will reach
56.5 billion cubic meters by 2050. Therefore, water scarcity in China ends up hurting their
economy in the long run. This is why China needs to be more careful with their water use.
Figure 6: Freshwater Resources per capita (available years)
Source: Created by author based on World Bank (2011).
Possible solutions to this problem is using market price signals to allocate water to its most
needed use. This would result in raising costs of water. China has attempted to fix the water
problem by investing in physical infrastructure such as wastewater plants. More than 1000
wastewater plants were built between 2000 and 2006. However the utilization rate was only 60
percent and about 50 plants located in 30 cities operated below a 30 percent capacity (Okadera,
Watanabe and Xu, 2006). This is perhaps due to the fact that revenues are transferred to the city
budget that does not ensure the plants have all the resources needed to operate.
IV.5. Income Inequality
Income inequality is of some concern in China. Although all areas of China have seen rises in
income, the skilled working populations as well as those living in coastal areas have benefited
more from recent urbanization and economic growth than those living in rural areas. While
Xubei Luo and Nong Zhu (2008, p. 2) state that inequality “can be desirable to some extent as it
unleashes competitive pressure and creates incentives for investment in skills” they recognize
81
that providing education to poor people is important and necessary for sustainable growth and
equitable distribution in the long run. China is worried about rising income inequality as it does
not want to fall into a trap where the rich are getting richer and the poor are getting poorer. This
is not necessarily happening in China at this point, but scholars such as Luo and Zhu (2008) offer
concern that it might. They argue (p. 20) that as the “economic reforms deepen, labor markets
work more efficiently by balancing the demand and supply of skills.” In other words, they are
saying that as the economy continues to change through urbanization and reform, skilled workers
will benefit much more than non-skilled workers and hence, accelerate income inequality.
Figure 7: Income Distribution in China (2005)
Source: Created by author based on World Bank (2011).
As shown in Figure 7, the richest twenty percent of people own about half the income in China.
A well thought out reason for this inequality is the lack of education in poor areas. Under
China’s unique decentralized fiscal system, providing and funding for education is a
responsibility of local governments. Poorer areas will not be able to afford the costs of basic
education leaving these people behind. Luo and Zhu (2008, p. 21) express that a “narrowing of
gaps in education” could lead to “harmonizing income distribution in the long run”. In poor
areas, many Chinese are not receiving a quality education, and the ones who do, are not that well
off either. Among those with nine or more years of education in poor areas of China, the poverty
rate is 10 percent, compared to a national average of 2 percent (Luo and Zhu, 2008, p. 20).
As urbanization continues in China, urban residents will continue to take up opportunities that
are there for them and become wealthier, while poorer rural residents and farmers will continue
to suffer. Furthermore, pollution in urban cities affects the farmer’s crops in ways such as acid
rain. It is up to the Chinese government to properly manage rapid urbanization without allowing
it to hurt the parts of their country that are not urbanizing.
V.
How does China Aim to Manage Its Urbanization?
China needs to find a way to manage its rapid growth and continue to keep it sustainable. In
82
order to control and manage its economy, China must work to manage its urbanization. Leaders
must learn how to address the challenges of large urban life such as land management, finance,
environmental risks, disaster planning, and many more.
V.1.
Environmental Health Action Plan
Presently, an environmental health action plan is being drafted by China’s State Environmental
Protection Administration (SEPA) and the Ministry of Health. This plan intends to tackle the
mortality and morbidity impacts of water and air pollution in China. It will focus mostly on
northern China where air and water pollution is the worst (World Bank, 2007). It also plans to
focus in areas where the poor are affected by a lack of clean water.
Although this plan has only arisen because of the terrible environmental impacts of urbanization,
it is still worth noting it as a positive result. There is a general consensus that our world today
needs to pay much higher attention to the way the environment is treated. Plans to aid the
environment are positive and good examples are important. Any efforts made to help the
environment, no matter what caused environmental damage, are necessary and positive.
V.2.
The World Bank Institute’s Urban Program3
China has partnered with the World Bank Institute, who has made efforts to help China manage
their urbanization, through the so-called Urban Program. This program mainly aims to inform
policymakers, municipal staff and practitioners with cutting-edge knowledge and skills that will
help them manage urbanization in an effective manner. It includes many learning programs that
leaders in China are expected to take part in.
One program element, called “Sustainable Urban Development and Management”, is directed
towards high-level city officials to help them with city management. It gives city officials skills
and information on spatial planning, land management, urban infrastructure finance, urban-rural
linkages, metropolitan management, environmental management, disaster-risk management, and
climate resilience. This specific program has served over 4,000 civil servants in the past eleven
years. Since urban life has changed so much, especially in the past decade, a program like this is
extremely useful in helping officials learn how to deal with all the challenges.
Another program element is that with support of the World Bank Institute, the Chinese Academy
of Governance offers two courses to help city management learn more about successfully
managing urban life. One is called “Urban Planning: Coping with Emerging Challenges” and the
other one is called “Sustainable Urban Land Use Planning”. These courses are delivered at
provincial and municipal level administration schools and have been successful in offering
support to city managers. The World Bank Institute collaborates also with Urban Planning
Society on China on Annual Planning Conference, which is one of China’s biggest events held to
share information on urbanization including discussions on climate change and economic
geography. This conference includes a network of about 20,000 urban practitioners.
These courses and conference offer the support that China needs in urban management. Chinese
officials are able to learn how to manage urbanization successfully through the huge branch of
knowledge that is being supplied. These efforts to channel knowledge into successful managing
practices seem to be working. Yusuf, the Senior Adviser in the World Bank’s Development
3
Unless otherwise noted, this sub-section is based on World Bank Institute (2011).
83
Research Group, says “one of China’s greatest successes in its rapid urbanization has been that it
has managed to contain the process to the extent that there are crowded living conditions but
very few slums.”4 This is most likely due to the way they channel the migrants to smaller or
medium sized urban areas through hukou, which is a household registration system. Perhaps the
“Sustainable Urban Development and Management” program has been successful in sharing
knowledge on spatial planning and land management.
VI.
Conclusion
Shahid Yusuf notes that “cities are expensive to retrofit and modify once they are built,” and that
China “must factor in resource scarcities right away and use available technologies strategically”
(World Bank, 2008, last paragraph). This is a very important point. Although China is currently
experiencing rapid economic growth and millions of people are living much better lives after
moving to urban areas, there is a need to take a serious look into the future. How will they
accommodate high levels of resource depreciation and environmental issues?
Urbanization is taking up large amounts of land needed for agricultural production and food
security. At the rate of the current urban expansion, the government’s designated food security
“bottom line” of 120 million hectares of farmable land will approach in the near future (Bai,
Chen and Shi, 2012). Between now and 2025, it is estimated that another 200-250 million people
will move to China’s cities (World Bank, 2008). Will China’s cities be able to continue to
accommodate this many people? All of this is a lot to consider, but is necessary in preparation
for a successful future for China.
Perhaps, the most important part of managing urbanization is giving policymakers, municipal
staff and all those with power to govern urbanization the skills to deal with the situation at hand.
As shown in this article, there are already many programs which are targeted towards teaching
city officials how to deal with these issues. Furthermore there are programs on spatial planning
and on how to deal with other emerging challenges in China. If these programs are effective,
there is potential for sustainability. If the leaders start today to make decisions concerning the
future of China, there is much promise for sustained growth and development.
References
Bai, Xuemei, Jing Chen and Peijun Shi (2012) “Landscape Urbanization and Economic Growth
in China: Positive Feedbacks and Sustainability Dilemmas”, Environmental Science &
Technology, Vol. 46, No. 1, pp. 132-139.
Chen, Bingheng; Haidong Kan; Renjie Chen; Songhui Jiang; and Chuanjie Hong (2011) “Air
Pollution and Health Studies in China--Policy Implications”, Journal of the Air & Waste
Management Association, Vol. 61, No. 11 (November), pp. 1292-1299.
Chen, Jie (2007) “Rapid Urbanization in China: A real Challenge to Soil Protection and Food
Security”, Catena, Vol. 69, No. 1 (January), pp. 1-15.
4
Quoted in World Bank (2008), third paragraph of the second section on “Strategies that have helped manage
Chinese urbanization”.
84
Economy, Elizabeth (1997) “The Case Study of China - Reforms and Resources: The
Implications for State Capacity in the PRC”, Occasional Paper of the Project on
Environmental Scarcities, State Capacity, and Civil Violence (Cambridge, MA:
American Academy of Arts and Sciences and the University of Toronto); Summary
available at: http://www.library.utoronto.ca/pcs/state/china/chinasum.htm.
Luo, Xubei and Nong Zhu (2008) “Rising Income Inequality in China: A Race to the Top”,
World Bank Policy Research Working Paper, No. 4700 (Washington, DC, World Bank,
August); available at: http://go.worldbank.org/ZFIMAX6400.
Okadera, Tomohiro; Masataka Watanabe; and Kaiqin Xu (2006) “Analysis of Water Demand
and Water Pollutant Discharge Using a Regional Input-Output Table: An Application to
the City of Chongqing, Upstream of the Three Gorges Dam in China”, Ecological
Economics, Vol. 58, No. 2 (June), pp. 221-237.
Phan, Matthew (2007) “Strong Growth Seen in China’s Water Sector”, The Business Times
(Singapore: timesbusinessdirectory.com, June 18th); available at:
http://www.timesdirectories.com/business/news/xxx/83719.
Shalizi, Zmarak (2008) “Water and Urbanization”, in: Shahid Yusuf and Tony Saich (eds.)
China Urbanizes: Consequences, Strategies, and Policies (Washington, DC: World
Bank), pp. 157-179 (Chapter 7); available at:
http://siteresources.worldbank.org/INTEAECOPRO/Resources/30876941206446474145/China_Urbanizes_Complete.pdf.
United Nations Development Programme (UNDP) (2006) Human Development Report 2006 —
Beyond Scarcity: Power, Poverty and the Global Water Crisis (Houndmills, Basingstoke
and New York: Palgrave MacMillan).
World Bank (2007) “Cost of Pollution in China: Economic Estimates of Physical Damages”,
Environment in East Asia and Pacific (Washington, DC: The World Bank, Rural
Development, Natural Resources and Environment Management Unit, East Asia and
Pacific Region and Beijing, China: The State Environmental Protection Administration);
available at: http://go.worldbank.org/FFCJVBTP40.
World Bank (2008) China’s Rapid Urbanization: Benefits, Challenges & Strategies
(Washington, DC: The World Bank, Website Resource); available at:
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentM
DK:21812803~pagePK:64165401~piPK:64165026~theSitePK:469382,00.html.
World Bank (2011) World Development Indicators (Washington, DC: World Bank); as posted
on the World Bank Website: http://data.worldbank.org/data-catalog/ (downloaded on
June 7, 2011).
World Bank Institute (2011) “China: Equipping Cities to Cope with Unprecedented Urbanization
Brochure”, World Bank Institute’s Urban Development Practice (Washington, DC:
World Bank, May); available at: http://wbi.worldbank.org/wbi/document/chinaequipping-cities-cope-unprecedented-urbanization-brochure.
85
Global Majority E-Journal, Vol. 3, No. 2 (December 2012), pp. 86-99
How the Lack of Access to
Safe Water and Sanitation Hampers
Growth and Development: The Case of Peru
Emily Platt
Abstract
Peru's failure to bring clean water and sanitation to many of the rural parts of the country has
hampered its economic development as well as the health and living standards of many of its
citizens. Failed policies for distributing and regulating clean water, coupled with a lack of
urgency to attend to the rural population, are primarily responsible for keeping many Peruvians
poor. The economic advantages of attending to these policy issues far outweigh the costs and
provide compelling evidence for Peru's leaders to value the long-term benefits over the shortterm costs.
I.
Introduction
Peru, one of the seventeen countries in the world with the most freshwater per capita, is also
paradoxically among the top thirty countries suffering from water stress and scarcity. The
country faces multiple problems in sanitizing and distributing this precious commodity, creating
grave effects on the nation’s health and development. Droughts, crop loss, starvation, and water
rationing are only a few of the direct consequences caused by Peru’s inability to properly supply,
distribute, and sanitize its water. Operational, maintenance and service costs that are not covered
by tariffs create challenges for providing good services and create institutional and financial
weaknesses within the country.
In 2006, the Peruvian government recognized the ineptitude of their water supply and sanitation
sector, prompting creation of the Agua Para Todos program, geared towards increasing access to
clean water and sanitation for some of the country’s poorest citizens. The program’s approaches
toward improving service quality, low-cost technologies and corresponding tariffs have
generated important advances in the last two decades. Positive reforms to the water and
sanitation sector have significantly improved Peru’s statistics in terms of clean water and
sanitation access.
86
Through an analysis of Peru’s access to safe drinking water and sanitation facilities, this article
attempts to establish the correlation between the lack of clean water and sanitation and the lack
of sustainable socio-economic development. “Water is a basic essential for all […] of the world’s
inhabitants; health has been shown to be dependent on a good supply of clean water, but water is
also needed for almost all industry, small or large scale” (Berry, 2009, p. 45).
Therefore, we know that sufficient, good quality water and sanitation are critical elements for the
well-being and development of Peru. Scholars have argued that “the viability and longevity of
our fast growing worldwide network of cities is heavily dependent on access to economically
sustainable sources of water” (Berry, 2009, p. 46). Based on actual data for Peru’s access to safe
water, it is clear that there is a scarcity of clean drinking water in Peru despite the fact that Peru
has an abundance of water sources nationally. This paradox is later explained by further
examining water distribution policies, technology, water allocation and inefficient attempts of
reform.
This article discusses the impact and correlation of poor sanitation and water supply in Peru with
its national growth and development. Following this introduction, the article provides a brief
literature review on the topic, followed by some empirical background and a discussion. The
discussion will focus on identifying the national problem, determining its causes and effects,
comparing Peru to other nations, and suggesting potential solutions. The last section provides
some conclusions about Peru’s national development and its correlation with access to clean
water and sanitation.
II.
Literature Review
At the global level, there is a large body of literature linking the access to safe water and
sanitation to economic growth and development. It has been widely recognized that “water is a
component of all states of human economic activity” (Berry, 2009, p. 46). Furthermore, as
Shafik (1994, p. 758) concludes, “there are clear relationships between specific environmental
indicators and per capita incomes. Where environmental quality directly affects human welfare,
higher incomes tend to be associated with less degradation.” Shafik (1994, p. 757) also
concludes that “the poor are often the most vulnerable to health and productivity losses
associated with a degraded environment.” An examination of the literature analyzing the linkage
between access to safe water and development in Peru shows that there are various opinions on
how the limited supply of clean drinking water has affected the nation and what feasible
solutions exist for curing this national crisis.

Hubbard, Sarisky, Gelting and Baffigo (2011) discuss a national infrastructure and
development plan for Peru that if implemented may create universal access to sustainable
water and sanitation. Specifically, the construction and installation of a condominial
water system in Peru has the potential to greatly improve water distribution and supply.
With this new water system, money will be saved, maintenance will be simplified and
infrastructure will be enhanced. Progress with the development and planning of a
condominial water distribution system has been delayed due to concerns about population
demands overwhelming the nation’s environmental service capacity. Hubbard et al.
conclude that without improved services in sanitation and water, Peru will not be able to
improve its national health. The points made in this article present potential solutions and
setbacks in terms of building a new, efficient, and coordinated national water distribution
87
system. By executing a new national water system the money saved and infrastructure
enhanced will serve as a catalyst for national growth and development.

In an earlier article, Hubbard, Gelting, Baffigo and Sarisky (2005) discuss the
improvement of national public health through technical assistance with the provision of
health services. The article argues that through the encouragement of these health
services, community involvement can be promoted and the public can be educated about
water sanitation and how to monitor it.

Checkley, Gilman, Black, Epstein, Cabrera, and Sterling (2004) refute the argument that
cleaner and better water is the direct antecedent to accomplishing full health benefits for
Peru. Distribution and rationing of water does not seem to be the main problem presented
by this article. Instead they argue that developments and advancements in national
sanitation will improve national health that will in turn create an improved and more
reliable clean water source.

Beauduin and Norris (1997) claim that the limitation for human development in Peru is
due to the inequality and injustices that fester within the country. They argue that because
of these inequalities citizens are unable to play a participatory role in running and
maintaining health services, and therefore cannot legitimately represent the people,
depriving individuals of the ability to promote change. If citizens had these powers they
would be able to promote health education and environmental hygiene in their
communities.

In a World Bank Policy Research Working Paper, Alcázar, Xu and Zuluaga (1999) argue
that the reason for Peru’s privatized water and sanitation failure is the high marginal costs
allocated towards pumping water from wells and building water storage facilities. A lack
of international experience and technological ability has continued to hamper Peru’s
access to clean drinking water in a practical and cost efficient manner.

Last but not least, Julio F. Alegria (2007), who is Director of Rural Water Supply and
Sanitation Project for the Southern Andes of Peru, argues that Peru’s water problems
mainly stem from an inadequate water policy, a weak and ineffective water authority and
ill-suited institutional arrangements. Based on his analysis, he suggests that there are
serious water use conflicts, which have increased in the last years, and that these conflicts
are a manifestation of a causal problem. This situation has created a vicious cycle that
impairs the governance of water. He also proposes a sweeping reform of water related
institutions and new water policies in order to make them more effective and encourage
public participation in decision-making processes.
III.
Empirical Background
III.1. Historical Background
When examining the effects of poor water quality and the lack of sanitation on Peru’s economic
development, it is important to take into account the nation’s past and current economic states as
well as the country’s historical development. Historically, Peruvians have had much success
obtaining water by adapting to the arid and semiarid climates and mountainous regions through
88
the use of technology and organization. The Incas developed watershed management techniques,
hydraulic infrastructures, channels and aqueducts.
It was not until the Spanish conquered Peru that the water distribution methods of the indigenous
people were dominated by the prevailing privileged ruling class. The ruling class, which then
comprised the Republic, neglected the native culture of Peru and its environmental
characteristics. Spanish domination during the colonial period created a large marginalization
within the country, pushing millions of indigenous people into small communities and villages
with little to say in the functionality and policies of the nation (Alcázar, Xu and Zuluaga, 1999).
Subsequently, from 1968 through 1980, the General Water Law was passed, which gave a
hegemonic role to the state and a limited role to the private sector in terms of water management.
Since the 1990s, the role of the state has started to change positively but the shift from public to
private sectors has not been an easy or fast transition. As pointed out by Alegria (2007, p. 21):
“Water policy and institutional arrangements developed in the last 37 years in Peru have caused
severe deficiencies and flaws in the Peruvian water management situation.”
III.2. Socio-economic Background
Peru went through decades of economic stagnation and recessions during most of the 1980s and
1990s and only started to grow more sustainably since 2001. It was not until 2005 that Peru’s
GDP per capita (measured in purchasing power parity-adjusted constant 2005 dollars) surpassed
the 1980 level, see Figure 1. Figure 1 also shows that Peru did slightly worse than the average
country in Latin America and the Caribbean (LAC) during the 1980s and 1990s, though the
recovery in the first decade of this millennium was stronger than that of the average LAC
country.
Figure 1: GDP per capita (constant PPP-adjusted 2005 dollar, 1980-2009)
Source: Created by author based on World Bank (2011).
89
Reflecting these economic developments, Peru also experienced a significant increase in the
percentage of the population living below $1-a-day from 1986 to 2001, after which extreme
poverty has declined, though there were still nearly 6 percent of Peru’s population that lived
below $1-a-day in 2009; see Figure 2.
Figure 2: Population living below $1.25 (percent), all available years
Source: Created by author based on World Bank (2011).
Furthermore, as Figure 3 shows, in 2000, the richest 20 percent earned always more than 50
percent of the total national income during the last three decades, while that earned by the
poorest 20 percent was always below 5 percent.
Figure 3: Peru’s Distribution of Income for Selected Years
Source: Created by author based on World Bank (2011).
90
As Figures 4 and 5 show, the urban population in Peru has significantly greater access to clean
drinking water sources and sanitation facilities than the rural population. While about 90 percent
of Peru’s urban population had access to clean drinking water during the last two decades, there
were only 45 percent of the rural population with such access in 1990.
Even though access rates of the rural population increased to 60 percent by 2008, they were still
only about two thirds of the urban access rate. The discrepancy between the rural and urban
population with access to sanitation is even higher, as access rates of the rural population were
about one third of access rates of the urban population during the last two decades.
Figure 4: Rural and Urban Access to Safe Water (all available years)
Source: Created by author based on World Bank (2011).
Figure 5: Rural and Urban Access to Sanitation (all available years)
Source: Created by author based on World Bank (2011).
91
IV.
Discussion
In Peru, as in all countries, clean water and sanitation are necessary to fulfill many aspects
related to economic development: basic human needs, agricultural production, industrial
production, energy production, transportation, recreation and environmental sustainability. Given
these competing needs, sufficient and effective means of clean water distribution and sanitation
must be implemented (Alcázar, Xu and Zuluaga, 1999).
The United Nations Environment Programme (UNEP) published findings stating that, “poor
countries with access to clean water and sanitation services experienced faster economic growth
than those without: one study found the annual economic growth rate was 3.7% among poor
countries with better access to improved water and sanitation services, while similarly poor
countries without access has an annual growth of just 0.1%” (underwater.org). Even though Peru
is currently among the top 30 countries that suffer most from water stress and scarcity, it is also
true that Peru is one of the top 17 countries of the world with the most freshwater available per
capita (Alegria). Therefore, it is essential to examine why a country with such an abundance of
resources is unable to deliver these resources throughout the country.
Unfortunately for Peru, the way in which its water systems are managed, significantly adversely
affects the efficiency of water use, which is needed to promote and sustain domestic economic
activity (Alcázar, Xu and Zuluaga, 1999). Studies have shown that, “sanitation and drinking
water investments have high rates of return: for every $1 invested, there is a projected $3-$34
economic development return.”1 This discussion first addresses the overarching problem of the
lack of clean water and sanitation, and then further explains the cause and effects of this
problem. Then, after comparing Peru on a global and international platform, potential solutions
will be discussed.
IV.1. Water and Sanitation Problems
This article proposes that the lack of clean water and sanitation in Peru is a problem that has
contributed to hindering the nation’s economic development. Alegria (2007) shows that 24
percent of Peruvians have no access to water supply services, 43 percent have no basic sanitation
facilities, and only 22 percent of total domestic wastewater is properly treated. These hauntingly
low numbers communicate the gravity of the Peruvian water and sanitation crisis.
More importantly, these statistics underscore the exclusion, inequality, and corruption
obstructing municipal water and sanitation authorities from effectively allocating and distributing
economic resources. This in turn hinders certain sectors of Peru from transitioning out of poverty
as lack of access to basic sanitation and health services prevents them from recognizing their full
economic potential and productivity. In order for Peru and its citizens to prosper, the nation must
improve its water and sanitation policies, systems, and efficiency by allocating tariffs towards
physically improving the nation’s sanitation plants, facilities, and transportation; enforcing
national policy regarding water and sanitation standards and regulations; and improving
efficiency by reducing waste and coordinating national water and sanitation efforts.
Though recently some positive actions have been taken to improve Peruvian water distribution
and sanitation, not all facets of the issue have gotten better; “Some indicators have
unambiguously improved over time, such as water, sanitation, particulates, and sulfur oxides.
1
See: http://www.underwater.org.
92
But others, such as fecal coliform in rivers, has unambiguously worsened” (Shafik, 1994, p.
769).
Two major contributors to the continuing problem are implementing inadequate and unstable
water policies and having a weak national water authority that is unable to fulfill its mandated
role (Alegria, 2007). Table 1 illustrates the causes and effects of water-policy-related problems
in Peru, while Table 2 illustrates the causes and effects of water-authority-related problems in
Peru.
Table 1: Water-Policy-Related Problems in Peru
Cause
Effects
Water law biased to agricultural
irrigation and coastal region
conditions.

Concentration of decision at the
central level of government,
decisions are taken in Lima.

No acknowledgement of
indigenous water rights.




Assigning an oversized role to
water management from the
supply side.

Allocation efficiency is not
pursued (water transfers
prohibited).
A welfare approach for state
investment and expenditures.


No access to water supply for
38% of rural families; no basic
sanitation services for 70% of
rural families.






Inappropriate water law framework for people of the Sierra and
Jungle regions.
Sierra region stagnated, with little support to aid agricultural
development.
Laws and regulations are not appropriate for the regions and
provinces outside of Lima.
Sense of frustration and discontent; people see a hierarchical and
authoritarian decision-making process.
Mining users and Coast and Jungle regions’ users are allocated
water and land resources, which were formerly in hands of
indigenous people.
Indigenous people’s quality of life worsens and poverty
increases.
During the period 1971-2001, US $ 5,000 million were invested
in large scale irrigation schemes with few results.
End-use efficiency measures/improvements are not emphasized.
Externalities from irrigation projects: 33% of irrigated area on
the Coast region is affected by saline soils and flooded lands.
Low productive agriculture due to low-yield crops allocation.
Farmers are not given incentives to be efficient (low end-use
efficiency).
Subsidized water tariffs (irrigation and domestic).
Private initiatives are discouraged; therefore a lack of private
investment for water resources development and for responding
the demand.
High incidence of infant mortality and water-related diseases
among deprived families.
Increasing poverty in deprived people.
Source: Adopted from Alegria (2007), Table 6, pp. 9-10.
93
Table 2: Water-Authority-Related Problems in Peru
Cause
Effects
Water authority is subordinated to
the agricultural sector administration.

Concentration of power of the public
administration at the central level
(capital city of Lima).

Politicians’ interference with water
authorities’ decisions and/or
noncompliance of the law.

Fragmentation, overlapping and/or
poor coordination between various
state water-related agencies.
Corruption of some functionaries and
officials.







Water authority decisions are biased to agricultural sector,
which limits its leadership.
Water authority lacks a comprehensive view of the problems;
therefore it cannot accurately assess supply and demands, nor
propose solutions.
Laws and norms are not appropriate for regions and provinces
outside of Lima.
Government decisions and actions are not supported by
people.
Unjust and/or incorrect decisions are made against society’s
interests.
Water tariffs do not cover O&M, water conservation nor
water treatment costs.
Public budget is wasted or ineffectively allocated.
Inefficient and/or ineffective use of scarce public budget.
Pollution and depletion of water resources.

Sense of mistrust and discontent among the people in relation
to government actions.
Pollution and depletion of water resources
Insufficient budget to fulfill waterrelated agencies’ functions and plans.

Agencies’ functions and plans cannot be accomplished.
Illegal and informal users in water
supply systems (irrigation and
domestic), with no sanctions.


Financial deficit by water management organizations.
Encouraging a norm-disobedient culture.
Source: Adopted from Alegria (2007), Table 7, p. 11.
One can conclude from the above tables that Peru’s water and sanitation problems stem from
poor policy and a partially ineffective water authority. The country’s failures to implement good
policy and to manage governmental authority create flaws in terms of agriculture, irrigation,
water rights, investments, and distribution. These flaws have resulted in negative national effects,
overall decreasing the quality of life of those deprived of and excluded from such resources.
IV.2. Effects of Water and Sanitation Problems
The direct effects of lacking access to clean water and sanitation facilities on Peru’s development
and growth are difficult to determine. As Shafik (1994, p. 757) explains: “The relationship
between income and the costs and benefits associated with any given level of environmental
quality is complex because it operates through a number of different channels, such as
preferences, technology and economic structure.” To understand how the failure of each of these
channels has contributed to Peruvian development issues, it is important to individually analyze
how these failures have led to poor national results in terms of clean water and sanitation.
Inefficient end-use, inefficient allocation of water, pollution and depletion of water resources are
only some of the unfavorable results that have been created due to national failures (Alegria,
2007). Water resources are unevenly distributed and water management is strongly sectorial,
94
fragmented and inefficient due to failed Peruvian water policies, a weak legal framework and
less than adequate institutional arrangements (Alegria, 2007). Primarily, the General Water Law
has six major features, which have made obtaining and distributing water to rural and
impoverished citizens more challenging. Some of these features include the facts that water
resources are the property of the State, water rights transfers are prohibited, the water authority
for quantity issues lies within the Ministry of Agriculture, and that the current law is biased
toward agricultural use and to the coastal region while customary land and the Andean region is
ignored (Alegria, 2007). These features allow for national water quality issues to be poorly
addressed or even sometimes, neglected.
In addition to the poor implementation of laws, bureaucratic divisions of tasks and
responsibilities have caused many problems in terms of efficient and effective water distribution
and sanitation facility access. Water authority’ roles, sectors and agencies can be described as
disperse and overlapping. Currently eight ministries and thirteen main state agencies exist within
Peru while the nation is divided into 68 irrigation districts (Alegria, 2007).
Alegria explains how and why the General Water Law, implemented by the Peruvian
government has failed in successfully allocating water resources. He describes the law as
“inadequate and obsolete” and argues that proposed reforms have failed because there is
opposition from stakeholders and an inability to achieve consensus. What is inadequate and
obsolete about this set of laws is originally, a hegemonic role was given to the State on the water
supply side but the private sector was given a limited role from the demand side. Currently, the
role of the State is to promote, enhance, oversee, and regulate the participation of the private
sector but recently, Peru is realizing that the system of oversight to regulate national water and
sanitation is ineffective due to the inequality of power between the public and private sector.
Instead, plans for the modernization of the nation’s legal framework need to be implemented
rather than perpetually failing to change.
Often times, economic results indicate that “most societies choose to adopt policies and to make
investments that reduce environmental damage associated with growth” but “where the costs of
environmental degradation are borne by others (by the poor), there are few incentives to alter
damaging behavior.”2 Therefore, it is of no surprise that little has been done to resolve sanitation
and water distribution issues as it primarily affects the nations marginalized and disenfranchised
poor.
IV.3. Causes of the Water and Sanitation Problems
The causes resulting in poor sanitation and water quality can be categorized into three major
effects: inefficient water end use, inefficient water allocation use, and conflicts among water
users and stakeholders (Alegria). These main categories have many more specific effects that fall
into their groupings. Water stress, water scarcity, poverty, job loss, food loss, droughts,
starvation and unwillingness to invest are all direct effects resulting from the poor management
and distribution of water and sanitation. Without resolving this Peruvian problem the water and
sanitation crisis will continue to hinder national growth and development while also having
increasingly grave consequences on the population and environment. Explicitly, “this situation,
in turn, increases environmental degradation, the depletion of natural resources, and widespread
poverty” (Alegria). By closely examining the outcomes of Peru’s poor water distribution and
2
Shafik (1994), p. 771.
95
sanitation access, it is easy to argue that these negative results impede national growth. By
failing mass industries such as agriculture, destroying citizen’s health, and creating social and
governmental conflicts, it has deterred investors, stakeholders, and plans for development. The
trepidation to invest and develop Peru is in part caused by the listed national problems created by
the failure to provide adequate clean water and sanitation.
Investment is one of the core ingredients in perpetuating economic development. Therefore, it is
essential for Peru to attract and gain domestic and foreign investors. Most businesses demand
water in order to efficiently operate and run their factories and provide for their employees and
employers. By making these correlations, it is evident Peru’s economic development and growth
is dependent on water as it affects all areas of business. As explained on the webpage of
Lifewater International, “water is a cornerstone of development, and access to safe water is a
fundamental catalyst for economic development in many communities around the globe.”3 With
a national and stable water supply, businesses can generate their own electricity, irrigate their
croplands, and transport goods. Clean water is becoming increasingly valuable and hard to come
by as businesses demand more and more of it. Hence, it is essential that Peru has the ability and
capacity to provide a clean and proficient source of water to maintain and attract investors and
businesses.
The use of water and sanitation access is essential for small, medium and large businesses and
corporations.



In the case of small businesses (such as informal ones run from the home) they often lack
a formal right to the water supply they use and are dependent on larger economic and
political actors for their water usage rights. This is threatening to small business owners
as they can do little to protect this essential and precious resource that their livelihood is
dependent on. If these small business owners live in fear that they will not be able to
obtain and maintain water as a commodity it may deter them from expanding their
business or investing in it.
For medium size businesses, water is a major factor affecting profits. In order for these
businesses to obtain functionality they must capitalize on the amount of obtainable water.
This may often result in cutting corners. For example, a restaurant not efficiently
preparing its food safely. Businesses violating necessary procedures not only have grave
effects on businesses but have greater implications as well. These repercussions may
additionally affect national productivity and health.
For larger businesses, national and international companies rely on a consistent water
supply to process their products. If the Peruvian government cannot ensure these
corporations a proficient and consistent water supply the companies may question their
ability to process their products and may decide not to invest in Peru or may decide to
leave Peru, resulting in a loss of GDP and national employment opportunities (Lifewater
International).
Accessibility to a clean water source and sanitation facilities has a large implication nationally in
terms of Peruvian health, business, investment, agriculture, and productivity. If these aspects are
hindered by the lack of clean water this in turn hinders Peru’s economic growth and
development. By identifying the negative effects resulting from an absence of adequate water
and sanitation the problems creating these results can be acknowledged and reversed.
3
See: http://www.lifewater.org/.
96
IV.4. Potential Solutions
Many feasible solutions exist for resolving Peru’s poor water sanitation purification and
distribution but all of them require a unified effort from lawmakers, stakeholders, politicians, the
government, and citizens. Each of these assemblages is a vital part in undertaking this national
issue because the nation’s current strategies have been atrociously ineffective in distributing,
purifying, and allocating water efficiently. This failure is a result of uncoordinated municipal and
private sector strategy, communication, and laws.
Changes such as “implementing a new water policy and water law; developing a strong,
autonomous, reliable and participative water authority; encouraging public participation and
decentralization; and promoting education and awareness in the public” (Alegria, 2007, p. 21)
are vital for Peru to prosper. With the involvement of all factions in Peru, these changes can be
implemented to include: national ownership of water, integrated water resource management,
technological improvements, no subsidies to operation and maintenance costs, coordination
between water sector policy-makers and macroeconomic policy-makers, stakeholder joint
participation, allocation of money towards environmental services, and promotion of private
investment and development especially in indigenous regions (Alegria, 2007, pp. 15-16).
National improvements such as these would greatly increase water and sanitation quality and
distribution and therefore, increase economic growth and development.
Changes in the Peruvian Government are essential in order to make the distribution of water and
sanitation greater and more efficient. First, service quality must be improved so that inadvertent
flaws such as wasting immense amounts of water in its transportation and distribution can be
prevented. Second, the development and enhancement of low-cost technologies would greatly
improve efficiency by losing less water due to leakage from old, cracked piping and hoses. These
service and technological based changes can be made by allocating collected national tariffs
towards repairing and upgrading water and sanitation technologies.
Other potential solutions can be suggested so that water may be distributed to the nation’s more
remote regions. One of the most obvious solutions is to have only one sector in charge of water
sanitation and distribution instead of having two existing and competitive fractions. The national
government should oversee all water and sanitation regulations and distribution, eliminating
constant competition with independent contractors. By implementing overarching national
regulations inconsistencies that currently exist within the nation, such as private and state water
pipes that sabotage the others functionality will be dissolved.
By creating a unified national effort with consistent policies, regulations, and laws, both public
and private sector adoption of these efforts and policies will strongly develop. If Peru develops a
national unified water and sanitation sector, this will result in a more harmonized country,
strongly reducing the chance of regional conflict and the need for government interference. In
achieving national stability through the means of resolving Peru’s water and sanitation
distribution problems, domestic and foreign investors may be more prone to invest in and
develop the nation as there would be less financial risk in doing so.
Lastly, the Peruvian government needs to increase spending on national education programs to
teach the population about proper hygiene, storage techniques and purification, resulting in the
improvement of national health. A paradigm shift, changing the way Peruvian society
understands the realities of clean water and sanitation, is necessary for a progressive shift
towards awareness (Alegria). Through a national education process shared values and attitudes
97
about water and sanitation will be acquired resulting in raised awareness and attentiveness
towards proper and improper sanitation methods and practices. By simply changing the type of
water storage bins used by poor Peruvian families and teaching citizens how to boil water to kill
bacteria significant decreases in illnesses such as childhood diarrhea would take place.
Improving national health would prevent sick children from missing school and employees
missing work. Creating a more educated and therefore healthier population would result in a
more productive and prosperous society, improving national efficiency, growth, and
development. Thus having a healthy population may attract investment because there is an
increased security in the dependency of employees’ and local consumers.
Implementing these solutions can greatly improve Peru’s national health by reducing sickness
and death; increasing national and local security by eradicating the cause of water right conflicts;
and improving water and sanitation efficiency by upgrading and repairing treatment facilities and
transportation. All suggested resolutions if implemented would generate confidence in
shareholders, investors, developers, and businesses that Peru is a sustainable environment for
business, growth, and development.
V.
Conclusion
The analysis of this article has shown that improvements in Peru’s water and sanitation would
support Peru’s economic growth and development strategy. It is imperative to understand how
the neglect of water and sanitation had helped to cause a devastating crisis in Peru, felt by all
segments of Peru’s population, especially the poorest citizens.
Even though the country is making rapid progress, much more needs to be done to advance clean
water distribution and sanitation in order to improve the nation’s overall physical health and
development. Access to clean water and sanitation are a fundamental component for Peru’s
economic development and growth. In order for Peru and its citizens to prosper the nation must
enforce the policies and regulations already in place, further enhance its water and sanitation
policies, modernize its systems, and create greater efficiency by reducing waste and coordinating
national water and sanitation efforts.
It is essential that the Peruvian government not only recognizes the errors of its past ways but
also works to reform and implement new laws and practices for self-betterment. The government
must also allocate a greater share of public funds towards physically improving the nation’s
sanitation plants, facilities, and transportation. In doing so, it will improve national health,
increase domestic and foreign investment, and achieve sustainable growth and development.
References
Alcázar, Lorena; Lixin Colin Xu; and Ana Maria Zuluaga (1999) “Institutions, Politics, and
Contracts: The Attempt to Privatize the Water and Sanitation Utility of Lima, Peru”,
World Bank Policy Research Working Paper Series, No. 2478 (Washington, DC: World
Bank); available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=632548.
Alegria, Julio F. (2007) “The Challenges of Water Resource Management in Peru”, " Toward
Environmental Stability; available at:
http://www.uwgb.edu/envsustain/Full_paper%20Challenges%20Water%20Resources%2
0_JF%20Alegria_.pdf.
98
Berry, Leonard (2009) "Economic Development and Water." In Maria Concepcion Donoso and
N. Vargas (eds.) Water Interactions with Energy, Environment, Food and Agriculture,
Volume 2, pp. 45-59; partly available at: http://www.eolss.net/Sample-Chapters/C07/E224D-04-03.pdf.
Checkley, William; Robert H. Gilman; Robert E. Black; Leonardo D. Epstein; Cila Cabrera; and
Charles R. Sterling (2004) “Effect of Water and Sanitation on Childhood Health in Poor
Peruvian Peri-Urban Community”, The Lancet, Vol. 363, No. 9403 (January 10th), pp.
112-118.
Hubbard, Bryan; Richard Gelting; Virginia Baffigo; and John Sarisky (2005) “Community
Environmental Health Assessment Strengthens Environmental Public Health Services in
the Peruvian Amazon”, International Journal of Hygiene and Environmental Health,
Vol. 208, Nos. 1-2, pp. 101-107.
Hubbard, Bryan; John Sarisky; Richard Gelting; and Virginia Baffigo (2011) "A Community
Demand-Driven Approach toward Sustainable Water and Sanitation Infrastructure
Development”, International Journal of Hygiene and Environmental Health, Vol. 214,
No. 4, pp. 326-334.
Shafik, Nemat (1994) “Economic Development and Environmental Quality: An Econometric
Analysis”, Oxford Economic Papers: Special Issue on Environmental Economics Vol.
46, pp. 757-773.
United Nations Environment Programme (UNEP) (2010) Water Quality, Facts and Statistics
(New York et al.: Underwater.org. UNEP, UN Habitat for a Better Urban Future, World
Water Day 2010 Clean Water for a Healthy World).
World Bank (2011) World Development Indicators (Washington, DC: World Bank); as posted
on the World Bank Website: http://data.worldbank.org/data-catalog/ (downloaded on
June 7, 2011).
99
Global Majority E-Journal, Vol. 3, No. 2 (December 2012), pp. 100-109
Rural Poverty in Honduras:
Despite Progress, an Ongoing Challenge
Carlos Andréu
Abstract
The Republic of Honduras is with approximately 7.7 million inhabitants the second most
populated country in Central America. Honduras is also the second poorest country in Central
America. Even though poverty affects the country as a whole, Honduras’ poverty is essentially a
rural problem. This article analyzes rural poverty in Honduras by first providing some empirical
background of Honduras and its economic history. It then analyzes the obstacles that cause this
extreme rural poverty and finally it presents possible solutions to reduce rural poverty in
Honduras by attacking the problem of rural poverty at its core.
I.
Introduction
In rural areas in Honduras poverty affects 63 percent of the population and 50 percent of rural
households are subject to extreme poverty.1 This means that half of the rural population lacks the
basic necessities to maintain a healthy lifestyle. This article analyzes rural poverty in Honduras
and how it affects rural communities and consequently the country as a whole. Among the main
factors that add to rural poverty in Honduras, a lack of assets (human, capital, financial…), lack
of access to non-farm jobs and opportunities, geographic isolation, and low agricultural
productivity are among the most important contributors. Therefore, providing access to strong
education and infrastructure to create economic opportunities for the poor in non-agricultural
sectors, giving rural areas the needed resources to stimulate agriculture (assets), and providing
the proper infrastructure to connect remote areas to opportunities and services in urban areas are
important factors that can help reduce Honduras’s rural poverty.
This article focuses on two major policies: first, increasing the participation of the rural poor in
non-agricultural employment opportunities by subsidizing rural education, and second,
improving infrastructure in rural areas (such as roads) to facilitate their access to this
opportunities and to improve rural living conditions. This article is divided into a brief literature
1
International Fund for Agricultural Development (IFAD) (undated).
100
review on rural poverty in Honduras, an empirical background of Honduras history of economic
growth, a discussion of possible solutions and interventions to reduce the severe problem of rural
poverty, and some conclusions.
II.
Brief Literature Review
Even though many of the sources point out that rural poverty in Latin America has been reduced
over the last thirty years, others point out that success has been uneven across countries. There is
a decent amount of literature on rural poverty in Honduras; but the majority of the literature is
based on a broad look of rural poverty in Latin America and the Caribbean as a whole. However,
the majority of the literature on Honduras agrees that Honduras’s rural poverty is among the
most severe in Central America.
Furthermore, most of the sources link Honduras’ rural poverty to the same essential problems:
lack of physical and human capital, low agricultural productivity, low non-agricultural
employment, and geographical isolation. However, many sources agree that these problems
result from a combination of government failures and market imperfections. Also, they suggest
that economic growth brings about an increasing regional concentration of economic activities,
which excludes the rural poor.
Moreover, some sources argue that the effect of education in agriculture is relatively small and
that the effect of geographical isolation is also small in income per capita differences. Another
major problem that the literature points out is the impact that rural family characteristics
(especially size) can have on GDP per capita and rural poverty. Therefore, most of the literature
comes to a consensus and points out that strong education to prepare people for non-agricultural
employment and a multi-dimensional and asset approach along with effective government policy
are major poverty reduction strategies. Even though the majority of the literature agrees with the
prior assumptions, there is a constant debate about their effectiveness. Furthermore, some
sources point out that the poverty reduction achieved over the last thirty-years has been due to
migration and not rural economic development.

Ramón López and Alberto Valdés (2000)2 synthesize six case studies of rural poverty in
Latin America (Chile, Colombia, El Salvador, Honduras, Paraguay, and Peru) and present
several studies that examine land, labor and poverty in each country. The case studies are
based on rural household survey data that includes demographics, farm production,
household income and expenditures. They focus on the effects that economic growth and
government failures have on the rural poor, who lag behind on every aspect. They also point
out the influence that human and physical capital, education for nonfarm employment, and
family planning can have on poverty reduction.

De Janvry and Sadoulet (2000) focus on rural poverty in Latin America, its determinants and
possible exit paths. Janvry and Sadoulet stress that even though rural poverty in Latin
America has declined over the last three decades, success has been uneven across countries
and rural poverty remains huge (including in Honduras). They also point out that reduction in
the number of rural relative to urban poor has been mainly the outcome of migration, not of
successful rural development. Furthermore they present four possible exit paths out of
2
Ramón López is an Agricultural Research Economics Professor at the University of Maryland. Alberto Valdés is
an Agricultural Advisor for the World Bank.
101
poverty: migration, successful agricultural development, a pluriactive path (the
diversification of activities carried out by a household in order to secure its economy and
welfare), and assistance. De Janvry and Sadoulet (2000) also stress the importance of
regional development, decentralization and participation.

Jansen, Siegel, Alwang and Pichón (2008) point out that the vast majority of the rural
population lives in remote hillsides with limited agricultural potential. Consequently, a
central theme of this literature is that agriculture cannot serve as the sole engine of poverty
reduction. In addition, they point out that in order to reduce poverty in rural areas, the rural
population must participate in non-agricultural activities, which improve household income
per capita. They call attention to the lack of assets in rural areas and how this affects their
livelihoods. Finally, they present a balance between agriculture and a multi-sectoral approach
towards poverty reduction such as investment in human capital, an asset based approach and
public investment to connect excluded rural areas to urban areas and non-agricultural
employment opportunities.

Villa and Lobo (2009) analyze rural poverty in Honduras by analyzing its characteristics and
its macroeconomic as well as microeconomic indicators. They discuss the actions that have
been taken to deal with rural poverty in the past and in the present. They also discuss new
possible rural poverty reduction strategies and approaches.
III.
Empirical Background
Even though Honduras has experienced economic growth since the beginning of the 2000s, it
still lacks far behind economically and it still has high poverty rates compared to most other
Central American countries. Honduras is the second most populated country in Central America
with 7.7 million inhabitants, but it is also the second poorest country after Nicaragua. 3 In terms
of nominal GDP, Honduras’ economy is ranked 106th in the world and 18th in Latin America and
in the Caribbean. As of 2010, Honduras was ranked 123rd in the world in terms of GDP per
capita (PPP).4 Even though Honduras’ GDP per capita has been increasing since the 1960s (see
Figure 1), still 63 percent of the rural population is affected by poverty. Likewise, 50 percent of
rural households are affected by extreme poverty due to low agricultural productivity.
Consequently, compared to Latin America and the Caribbean as a whole, Honduras has lacked
far behind in terms of GDP per capita growth (see Figure 1).
Honduras’ low economic growth (which is clearly visible in Figure 1) throughout the 2000s was
the result of an economic structural adjustment beginning the 1990s: “The traditional economic
income substitution model was gradually replaced by an export growth-led model focused on
market and trade liberalization”.5 However, even though the government has achieved a higher
level of economic stability since it opened its doors to international trade, this progress has not
resulted in improved living conditions or reduced poverty for the country’s huge proportion of
poor people. Furthermore, while the population is divided almost evenly between rural and urban
areas, poverty is essentially a rural problem. Poverty is prevalent in central hillside areas in the
3
International Fund for Agricultural Development (IFAD) (undated).
See: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita.
5
Jansen, Siegel, Alwang and Pichón (2008), p. 223.
4
102
interior highlands of Honduras, which are home to 75 percent of the rural population.6
Ultimately, Honduras’ rural poverty is among the most severe in Central America and the
Caribbean after Haiti, Bolivia and Nicaragua.
Figure 1: GDP per capita in constant 2000 dollar, 1960-2009
Source: Created by author based on data from World Bank (2011).
III.1. Employment and Agriculture
The fact that most of the poor live in remote rural areas makes rural poverty harder to deal with
because of this so-called geographic isolation. Therefore, most of the rural population in
Honduras lacks connection with opportunities in non-agricultural sectors, which are important to
improve per capita income and to reduce poverty in rural households. “Throughout Latin
America, rural households that diversify their economic activities into occupations outside the
agricultural sector tend to earn higher income than those who rely exclusively on primary
agricultural production.”7 However, Honduras population still relies greatly on agriculture
because of their lack of connection to non-farm employment opportunities.
Even though currently the agricultural sector accounts for a small percentage of GDP (12.5
percent), Honduras economy has been supported in the past strongly by the agricultural sector.
As of 1999, agriculture still accounted for 22 percent of GDP.8 In addition, due to the high
number of rural population, many of these families depend on agriculture as the main source of
income and subsistence. Consequently, the agricultural sector employs 39 percent of the
population and subsistence farmers make up 70 percent of agricultural based families. Therefore,
like many countries of Central America such as Nicaragua, Honduras population is mostly
economically vulnerable. Natural disasters and climate changes expose Honduras population,
6
International Fund for Agricultural Development (IFAD) (undated).
Jansen, Siegel, Alwang and Pichón (2008), p. 224.
8
See: http://en.wikipedia.org/wiki/Economy_of_Honduras.
7
103
especially the rural, to food and job insecurity9. Consequently, the rural population must
participate in non-agricultural activities in order to assure their sustainability if natural disasters
affect agriculture. This is why participation in non-farm employment is one of the main topics of
this article’s discussion in the next section.
Figure 2: Female and Male Labor Participation Rates, 1980-2009
Source: Created by author based on data from World Bank (2011).
As pointed out in the USAID (2006) report, Honduras has a labor participation rate of 67
percent, which means that labor is low and underutilized. Even though low labor participation
rates are common in Latin America because of underemployment, low labor participation is
problematic for economic growth. Furthermore, as the female labor participation rate is about
half of that of males (see Figure 2), there also is an inequality of employment opportunities
between females and males.
III.2. Violence and Government Instability
Honduras is also one of the most violent countries in the world because it is a key transit point
for drug trafficking and has more gang members, or maras, than all other Central American
countries combined. Violence and government corruption are two of the main obstacles that
make Honduras private sector lag behind because citizens lack confidence in their business
environment. Therefore, many citizens and foreign investors retreat from taking the risk of
opening businesses and of doing business with Honduras government. As pointed out in USAID
(2006, pp. 16-17), based on the 2005 Transparency International Corruption Perceptions Index,
Honduras scored a 2.6 in corruption of a possible 10 (with 10 being the lowest level of
9
See: http://www.usaid.gov/hn/economy.html.
104
corruption). By contrast, Chile scored a 7.3 and Costa Rica a 4.2.10 The poor are also the most
affected by violence and government instability and corruption, because without security they
cannot protect their land and with government corruption and instability they do not receive the
aid they need to help reduce poverty.
III.3. Education
Even though public education in Honduras is free for children between the ages of 7 and 14, the
public education system is characterized by lack of schools, understaffing, and lack of funds for
school equipment. The lack of funding of the public education system is evident based on student
to teacher ratio, which normally in Honduras are about 34.4 students per teacher in urban areas.
This ratio is substantially higher than the average in countries like Costa Rica, which has an
average of 22.6 students per teacher.11 This implies that there is a big difference in school
staffing between Honduras and the neighboring countries of Central America.
Furthermore, rural students are the most disadvantaged in terms of education because schools in
rural areas are harder to reach and, therefore, have less resources and teachers than in urban
schools. As pointed out by the USAID report, rural classrooms can have as much as 80 students
per teacher (2006). By the same token, education expenditure for primary education in Honduras
in 2005 was only 2.37 percent of GDP, which is low relative to the average 2.93 percent of the
rest of the region (USAID, 2006, p. 35). Ultimately, Honduras needs to increase spending on
rural public education, in order to empower the young rural population so that they can have
more opportunities throughout their life. Education is crucial for the reduction of poverty.
Finally, education is not only crucial to reduce poverty, but it also provides a multi-dimensional
impact for the country as whole. Education shapes society by inspiring good morals and
important family values. Likewise, even primary and secondary education provides a discipline
and common knowledge that children would not receive without proper primary and secondary
education. In a society like Honduras, which has suffered from government corruption and
abuse, education is crucial to protect society from the government’s misdeeds. By educating the
people, especially the poor, people become active in civic life, which makes them aware of the
government’s actions and at the same time reduces their chances of being abused or tricked by
the government. Furthermore, education serves as fuel for economic growth. More educated
people means better jobs and wages and a stronger labor force. At the same time, education
results in higher productivity, higher income per capita, more businesses and poverty reduction.
Consequently, education is crucial not only for the reduction of poverty, but for the sake of the
country’s economic and social stability and growth.
IV.
Key Interventions and Solutions
IV.1. Education and Non-agricultural Activities
Agriculture in rural areas in Honduras is characterized by low productivity combined with low
access to technology and assets.12 Agricultural growth and employment in the agricultural sector
are important for the rural poor, but higher agriculture growth alone is not sufficient to reduce
rural poverty substantially in Honduras. Therefore, participation in non-agricultural sectors,
10
USAID (2006), pp. 16-17.
USAID (2006), p. 35.
12
International Fund for Agricultural Development (IFAD) (undated).
11
105
along with higher agricultural productivity, must go hand in hand to reduce rural poverty in
Honduras: “Throughout Latin America, rural households that diversify their economic activities
into occupations outside the agricultural sector tend to earn higher income than those who rely
exclusively on primary agricultural production. However, a salient characteristic of rural
Honduras is the relative lack of non-agricultural activities compared to other countries of Central
America.” 13 In 1997, non-agricultural activities in Honduras accounted only for 22 percent of
rural income, compared to 60 percent in Costa Rica, 42 percent in Nicaragua and 38 percent in
El Salvador.14 Therefore, this proves that it is important to empower the rural poor in Honduras
in order for them to diversify their source of income to improve their standard of living by
participating in non-agricultural activities.
However, in order to increase participation in non-agricultural sectors, the government must
focus on subsidizing education in rural areas. Even though education contributes only somewhat
to agricultural productivity, higher returns of schooling are obtained in non-farm employments.15
Furthermore, research suggests that in Honduras, every year of schooling raises income by 10
percent, with upper secondary education having the highest returns because acquiring higher
professional skills allow people to sell their labor at a higher price. 16 Nevertheless, Honduras has
a problem of lack of funding for public education as mentioned in the previous page in section
III.3. Furthermore, rural students are the most disadvantaged in terms of education because
schools in rural areas are harder to reach and, therefore, have less resources and teachers than in
urban schools. As pointed out by the USAID report, rural classrooms can have as much as 80
students per teacher (2006). The USAID report goes on to argue that: “In 2005 the education
expenditure for primary education was 2.37 percent of GDP, which is low in absolute terms as
well as low relative to the LMI-LAC average of 2.93 percent” (USAID, 2006, p. 35). Therefore,
government must reset its priorities and increase spending in education, which is essential for the
reduction of poverty.
This means that by subsidizing rural education and, therefore, opening new opportunities for the
rural population in non-agricultural sectors the rural poor have the opportunity to improve the
status of the household, even if it means only an improvement from ‘‘extremely poor’’ to merely
‘‘poor’’. 17 Furthermore, Honduras’ workforce has a low participation rate of only 67 percent of
the population. This means that subsidizing education to create opportunities for the poor in nonfarm sectors not only reduces rural poverty; it also enlarges the workforce participation, which is
a positive factor for the country’s economy as a whole. The question that remains now is how
should Honduras deal with geographical isolation in order to provide the rural poor education
effectively and to facilitate their access to other economic sectors?
IV.2. Dealing with Geographical Isolation and Lack of Infrastructure
Rural poverty predominates in the central hillsides in the interior highlands of Honduras.
Therefore, access to these rural areas can become a challenge for the effectiveness of
government policies that can reduce rural poverty and improve living standards (education,
electricity, clean water, etc.). Likewise, the rural poor are limited to their surroundings and have
13
Jansen, Siegel, Alwang and Pichón (2008), p. 224.
Jansen, Siegel, Alwang and Pichón (2008), p. 225.
15
López and Valdés (2000), p. 199.
16
Jansen, Siegel, Alwang and Pichón, 2008, p. 235.
17
López and Valdés (2000), p. 201.
14
106
problems accessing other economic sectors and markets in order to take advantage of non-farm
opportunities. Therefore, in order to reduce rural poverty, the government must connect these
isolated rural areas with economically prosperous areas, through an improvement and expansion
of the country’s infrastructure.
A key example of a problem that lack of proper physical infrastructure in Honduras causes is the
lack of access to roads: “many rural communities in Honduras are isolated from major (primary
or secondary) roads and/or are isolated during the rainy season when roads are impassable,
especially in the hillside areas where the road network is less well developed than in the
valleys.”18 This means that many rural communities are isolated from non-farm economic
activity, employment opportunities, and new markets for agricultural products that are crucial to
improve income per capita and reduce household poverty. Likewise, if people are isolated from
roads in the hillside areas, they have difficulty accessing medical services, proper education and
other professional services, which makes their living conditions even more difficult to withstand.
The author has seen this lack of well-developed roads in the hillside areas of Honduras, when he
visited Honduras in March 2010 and March 2011. A trip of a few miles from El Progreso (a
partly industrialized city) to a community called Monte Verde (in the high mountains of the
Department of Intibuca) took about 6 hours in a pick-up truck. For most of the rural population it
does not make sense to even try to reach urban areas. Therefore, in order to promote nonagricultural employment opportunities in order to reduce poverty, government must reach out to
the poor and connect them through the use of infrastructure, such as properly paved roads and
more accessible public transportation, to allow the rural poor to take advantage of opportunities
outside their communities.
Figure 3: Overall Infrastructure Quality Index
Source: USAID (2006), Figure 3.12, p. 30.
18
Jansen, Siegel, Alwang and Pichón (2008), pp. 231-233.
107
Other problems are the lack of electricity and lack of water and sanitation infrastructures in
Honduras’ rural areas. Even though 70 percent of the rural population is covered by water and
sanitation infrastructure, access and services for this type of infrastructure are not always
available. 19 Furthermore, electricity coverage in rural areas is around 20 percent, which is
extremely low compared to the urban 80 percent.20 This means that people do not have as much
electricity for machinery and to operate capital, which affects productivity. Also, lack of
electricity makes people rely exclusively on sunlight, which limits their hours of work and
production. As shown in Figure 3, Honduras has a low infrastructure quality index and plenty of
room to improve its infrastructure.
Access to safe water, sanitation, and electricity are essential for poverty reduction because they
promote health and a better standard of living, which are crucial in order for a person to produce
income. If a person were sick, he/she would not be able to work and if he/she does not work then
he/she does not produce income, which makes the person poorer. That is why strong
infrastructure is essential for poverty reduction and that is why the government should focus on
subsidizing this type of physical capital.
Finally, basic social infrastructures (clinics, schools teachers, and even school materials) are
scarce and difficult to access in rural areas. As mentioned above in section III.3, rural students
are the most disadvantaged in terms of education because schools in rural areas are harder to
reach and, therefore, have less resources and teachers than in urban schools. In rural areas school
is not consistent because of the difficulty teachers have of reaching the schools. Also, schools in
rural areas are small and, therefore, many students take class together in a single room with a
single teacher. As pointed out by the USAID (2006) report, rural classrooms can have as much as
80 students per teacher. Likewise, clinics lack medics and proper equipment and technology. 21 If
a person suffers an emergency, she/he is vulnerable to suffer death because of lack of medical
assistance.
Therefore, subsidizing physical and social capital is essential to reduce poverty and to improve
standards of living. Physical capital gives the poor access to new opportunities outside the rural
areas, as well as social capital (education), and, capital that deals with health related issues (such
as clinics and sanitation infrastructure) are essential to improve standards of living to make the
rural population capable of taking advantage of those outer opportunities that education and
physical capital would provide. Therefore, in order to reduce poverty substantially, the
government of Honduras must focus on connecting rural areas to urban areas to give the poor
access to the world beyond their surroundings.
V.
Conclusion
Based on the analysis of this article, it can be concluded that there must be a multi-dimensional
strategy in order to substantially reduce Honduras’ chronic poverty problem. Even though the
government has achieved a higher level of economic stability since it opened its doors to
international trade, extreme poverty still affects a high percentage of Honduras’ population.
Furthermore, many rural areas still lack proper sanitation infrastructure and access to a strong
19
Jansen, Siegel, Alwang and Pichón (2008), pp. 231-233.
Jansen, Siegel, Alwang and Pichón (2008), p. 231.
21
Jansen, Siegel, Alwang and Pichón (2008), pp. 231-233.
20
108
education. Consequently, this means that the government must restructure its public spending
strategy by directing more of its public spending to the poor rural areas of Honduras’ hillsides.
As part of the multi-dimensional strategy to reduce Honduras chronic poverty problem, there has
to be a major improvement in rural education, which would allow an increased involvement of
the poor in non-agricultural sectors. There also have to be more initiatives to improve
infrastructure (such as roads and sanitation infrastructure) to connect the poor to non-agricultural
employment opportunities and to improve rural living conditions. Investing in the poor is not
only good for the poor; it is a positive investment for the country as a whole. Honduras’
government must break the chains of government corruption and attack poverty before it is too
late. As long as the poor are set aside from the rest of the population, they will continue to be
poor and they would continue to be a burden for the country as a whole. Therefore, Honduras’
government must put an end to this economic inequality not only for the sake of the poor, but
also for the sake of the whole country.
References
de Janvry, Alain and Elisabeth Sadoulet (2000) “Rural Poverty in Latin America: Determinants
and Exit Paths”, Food Policy, Vol. 25, No. 4 (August), pp. 389-409.
International Fund for Agricultural Development (IFAD) (undated) Rural Poverty Portal: Rural
Poverty in Honduras, internet resource; available at:
http://www.ruralpovertyportal.org/web/guest/country/home/tags/honduras.
Jansen, Hans; Paul Siegel; Jeffrey Alwang; and Francisco Pichón (2008) “Geography,
Livelihoods and Rural Poverty in Honduras: An Empirical Analysis using an Asset-based
Approach”, in Stephan Klasen and Felicitas Nowak-Lehmann (eds.) Poverty, Inequality
and Migration in Latin America, Vol. 20 (Frankfurt, Germany: Peter Lang), pp. 221-241.
López, Ramón and Alberto Valdés (2000) “Fighting Rural Poverty in Latin America: New
Evidence of the Effects of Education, Demographics, and Access to Land”, Economic
Development and Cultural Change, Vol. 49, No. 1, pp. 197-211.
United States Agency for International Development (USAID) (2006) Honduras: Economic
Performance Assessment (Washington, DC: USAID, May); available at:
http://egateg.usaid.gov/sites/default/files/Honduras_Economic_Performance_Assessment.pdf.
Villa, Manuel and Horacio Lovo (2009) “Crisis y pobreza rural en América Latina: el caso de
Honduras”, Santiago, Chile: Rimisp - Centro Latinoamericano para el Desarrollo Rural,
Programa Dinámicas Territoriales Rurales, Documento de Trabajo, No. 46.; available at:
http://www.rimisp.org/FCKeditor/UserFiles/File/documentos/docs/pdf/DTR/N46_2009_
Villa-Lovo_crisis-pobreza-rural-caso-Honduras.pdf.
World Bank (2011) World Development Indicators (Washington, DC: World Bank); as posted
on the World Bank website (downloaded on March 26, 2012).
109
Global Majority E-Journal, Vol. 3, No. 2 (December 2012), pp. 110-120
Water in Ethiopia:
Drought, Disease and Death
Morgan Hendrix
Abstract
For the last thirty years, drought has consistently suffocated the landlocked country of Ethiopia.
Several additional factors have made Ethiopia’s water crisis worse. The lack of water and
sanitation has created and spread food shortages and famine across the country, forced children
to seek clean water over attending school, and water-borne illnesses have claimed many lives.
Solutions do exist for Ethiopia and many organizations are willing help Ethiopia. However, if
present conditions continue, the only things certain in Ethiopia’s future are drought, disease,
and death.
I.
Introduction
Ethiopia boasts a population of about 83 million people and which only 38 percent have access
to safe drinking water sources and only 12 percent of the population use improved sanitation
facilities.1 Ethiopia has found itself in an extreme water crisis situation, brought on mainly by
severe drought, little governmental funding and assistance, and lack of water management and
sanitation resources. The country is forced to battle the causes of the water crisis, but is in an
unwinnable fight if the water problem is not solved first. The shortage of water and rainfall has
brought an overwhelming spread of famine and food shortage.
Due to the lack of rainfall, some Ethiopians are forced to walk up to six hours in order to collect
water that is often found riddled with disease. This is causing women and children to put water
collection above all else, including school. It also is creating water-borne illnesses to infect and
claim thousands of Ethiopian lives. Around 7.5 million Ethiopians suffer problems related to
high fluoride levels.2 This number is only the tip of the iceberg when it comes to water related
disease in Ethiopia and without improving sanitation within the country, the numbers are set to
only increase.
1
2
World Bank (2011).
Getachew and Guenet (2007).
110
Luckily, there does seem to be hope along the way for the people of Ethiopia, with many
organizations around the world focusing their efforts for a better and cleaner tomorrow. World
Vision and Water.org are dedicated to finding solutions for Ethiopia, by raising money and
establishing water and sanitation resources in parts of the country that will help to slowly abolish
the water problems once and for all. However, these organizations are not an end all solution to
Ethiopia’s problems and more needs to be done in every aspect to end the crisis once and for all.
II.
Literature Review
With awareness for the global water crisis increasing, the availability of information on the
Internet has also increased exponentially. Ethiopia has become a focal point country of the water
crisis and many organizations and websites have posted various resources. However, there are
still problems related to reliable information. Much of the information posted implies basic data
but lacks the depth needed to acquire full understanding of the many aspects of Ethiopia’s water
crisis. The following paragraphs summarize first some traditional publications (like reports and
articles in academic journals), and then some helpful internet resources on the water crisis in
Ethiopia.
II.1.
Some Traditional Resources
One of the first substantial contributions focusing on Ethiopia’s droughts is a report by the Relief
and Rehabilitation Commission (1985). The report analyzed Ethiopia’s challenges due to major
droughts in the 1970s and how Ethiopia struggled for a decade to recover from those droughts.
Haile (1988) published an article in the Ethiopian Journal of Agricultural Sciences in which he
writes that drought is a recurrent phenomenon in Ethiopia, with droughts having occurred quasiperiodically during the last several centuries. He also writes that scientific investigations have
revealed that the primary cause is the fluctuation of the general atmospheric circulation. As a
consequence of such fluctuations the rain-producing components for Ethiopia have been
weakened or dislocated during drought years. However, human interferences such as
deforestation, overgrazing and over cultivation enhance the severity and prolongation of drought
recurrences.
Webb, von Braun, and Yohannes (1992) examined the policy implications of coping failures at
national and household levels to famine in Ethiopia. They found that even in a country like
Ethiopia, where nearly everybody is poor, the depth of poverty is important in determining the
impact of famine.
A World Bank Technical Report by Benson and Clay (1998) calculated the impact droughts have
on Ethiopia and other Sub-Saharan African countries. Benson and Clay develop a new
framework that allows understanding the wider economic impacts of drought. The new
framework also explains why some economies are more susceptible to drought than others. One
of their key findings was that different regions of Africa are experiencing different long-term
climatic trends, implying that different regional strategies are required for mitigation and relief of
droughts.
Most of the more recent publications are linking Ethiopia’s water crisis to climate change. For
example, Conway and Schipper (2011) analyze the challenges and opportunities of adaptation to
climate change in Ethiopia. They show that there are large uncertainties in climate change
111
projections for Ethiopia but that there is potential for low-regrets measures to reduce the
vulnerability to current climate.
II.2.
Some Internet Resources
The IRIN Humanitarian New and Analysis (2003) reports that the African water crisis was
brought to the attention of some UN officials and the African government ministers representing
more than 40 countries at a high level five-day summit in Addis Ababa in December of 2003.
Desperately wanting to set a plan in action to start solving the water crisis, the summit
participants discussed and established many options that would help Africa’s present situation
and hopefully change the projected future. The water crisis was discussed as a factor that must be
solved before any real progress could be made in the countries’ political and economic
situations.
World Vision, which is a Christian humanitarian organization that has dedicated its efforts to
help relieve Ethiopia of the detrimental effects of the water crisis, has posted various data and
project information on their Ethiopia country website.3 This website attributes problems with
sickness, hunger, poverty, and education to the current water situation. It also reports on World
Vision’s efforts to improve the situation in the Ethiopian towns of Tongo and Fitiwalo.
An UNICEF background brief on Ethiopia’s Water and Sanitation Program compiled by Morris
(2007) reports that the effective access to safe water is far lower than is typically reported as 3060 percent of existing water schemes are not functioning and many constructed latrines are not in
use. Morris also reports that not only do the most frequent culprits like animal and human waste
contaminate water, but that high fluoride levels in groundwater are a huge problem. The brief
goes on to describe the action planned to take place through Ethiopia’s water and sanitation
program and the financing needed for the program (some US$112 million).
Last but not least, MacDonald, Calow, Nicol, Hope, and Robins (1997) created a map that
highlights areas in Ethiopia where groundwater may be available during periods of drought. The
map, which is available freely on the internet,4 provides broad information that can be used to
help target water supply programs or highlight critical monitoring areas.
III.
Empirical Background
Ethiopia is an entirely landlocked country, located in East Africa, in what is called the Horn of
Africa, see Figure 1. A combination of varied rainfall and temperature patterns are mostly
responsible for Ethiopia’s classification in Africa’s tropical zone and the country’s assorted
topography.5 A year in Ethiopia characteristically sees three seasons of varying amounts of
rainfall. These seasons include: kremt, the main rainy season running from June- September;
bega, the dry season running from October-January; and belg, the small rains season running
from February-May.
The average rainfall ranges from about 2000 millimeters in the Southwest regions to about 100
millimeters in the Northeastern Lowlands.6 Figure 2 shows the average mean of rainfall (in
3
See http://changeeverything.wvpartner.us/watercrisis.html.
See http://www-esd.worldbank.org/esd/ard/groundwater/pdfreports/Struggle_for_Water_App6_Pt2.pdf.
5
CIA (2012).
6
Encyclopedia of Earth (2012).
4
112
millimeters) from 1951-1995. It clearly shows large differences across different regions of
Ethiopia, with most of the central western regions getting a sufficient amount of rain during the
rainy season, but the rest of the country, especially towards the Horn of Africa, being very dry
for most time of the year.
Figure 1: Map of Ethiopia and the Horn of Africa
Source: Google Maps (2011)
Figure 2: Ethiopia’s Average Mean of Rainfall from 1951-1995 (in Millimeters)
Source: MacDonald, Calow, Nicol, Hope and Robins (1997).
113
With a purchasing power parity (PPP) adjusted Gross Domestic Product (GDP) per capita of
only US$849 in 2009, Ethiopia is one of the world’s poorest countries.7 As shown in Figure 3,
GDP per capita was stagnating for decades in Ethiopia. Only since 2003 has GDP increased for
more than a few years. Figure 3 also shows that Ethiopia’s GDP per capita was about a third of
the average GDP per capita of Sub-Saharan Africa (SSA).
Figure 3: GDP per capita for Ethiopia and Sub-Saharan Africa (SSA), 1981-2009
Source: Created by author based on World Bank (2011).
A substantial reason for Ethiopia’s economic stagnation is due to frequent droughts, which have
a significant impact on the economy as agriculture is Ethiopia’s largest sector, accounting for
nearly half of Ethiopia’s GDP, see Figure 4. Furthermore, as of 2005, 80.2 percent of the
Ethiopian labor fore was employed in the agricultural sector.8 Agriculture also accounts for 90
percent of exports. In other words, Ethiopia is a country completely dependent upon its
agriculture and the need of progress in this sector is necessary for the survival of Ethiopia as a
whole.9
Within agriculture, 64 percent of value added comes from crops, 23 percent comes from
livestock and 13 percent comes from forestry. Of the crops grown in Ethiopia, 73 percent are
cereals and 20 percent are pulses, oilseeds, and annual crops. Less than 7 percent is devoted to
permanent crops. Ethiopia’s agriculture is almost entirely dependent on rainfall for the
maintenance of crops, but with the constant amount of drought plaguing the country, the sector is
failing to produce the amounts that it needs. The main outcome of Ethiopia being unable to
supply the numbers needed for a successful agricultural yield is increased poverty rates. There
are indications that the situation may actually get worse, as with temperatures rising and
droughts becoming more common, it has been projected that climate change will reduce yields of
the wheat crop by 33 percent in coming years.10
7
World Bank (2011).
World Bank (2011).
9
African Development Bank (2011).
10
World Bank (2012).
8
114
Figure 4: Sectoral Shares of Ethiopia’s Economy, 1981-2009
Source: Created by author based on World Bank (2011).
IV.
Causes of the Water Crisis
There are a few, very serious factors that contribute to the water crisis in Ethiopia. It is the
combination of these factors together that makes the situation so destructive to the country.
These factors include: (1) climate change, (2) government resistance against external help, and
(3) a lack of water management.
IV.1. Climate Change
Climate change refers to a period of time where a country or region goes through changing
weather or temperature patterns than what is accustomed. Not only that, but it also refers to
changes in seasons over long periods of time. Notably these changes have become more drastic
in recent years, mainly due to global warming. Global warming is the process of the Earth’s
surface and overall temperatures rising due to the amount of greenhouse gases being emitted into
the atmosphere by humans. The burning of fossil fuels, like oil, coal, and natural gas is
contributing to these emissions and therefore speeding up the gradual increase of Earth’s
temperatures. The current level of carbon dioxide (CO2) emission is at the highest it has ever
been in the past 650,000 years.11
Ethiopia has seen at least five major droughts since 1980 accompanied by an abundance of local
droughts as well. Global warming is a significant reason as to why these droughts are becoming
more frequent and prolonged. The effects of drought on the country of Ethiopia are becoming
increasingly worse with time, especially due to the fact of how dependent the country is on
rainfall. The continued failure of the October to December rains has been one of the biggest
contributors to the water crisis. The lack of expected rainfall has also lead to water and pasture
shortage within the country, which is absolutely one of the biggest problems.
11
NOAA National Weather Service (2007).
115
IV.2. Government Resistance against External Help
Due to their struggles with famine, poverty, and drought, the country of Ethiopia received help
and assistance from outside groups and non-profit organizations for many years. However, after
a significant drought in 2008 plastered Ethiopia’s problems all over the world the Ethiopian
government decided that the negative attention towards their country could be avoided if they
took matters into their own hands. In 2009, Ethiopia’s parliament decided to pass a new law that
would regulate charities and foreign humanitarian groups coming into the country and offering
assistance.
This law categorized a foreign group as an organization, local or not, that received more than 10
percent of their funding from abroad.12 This new law restricted many organizations like World
Vision and Water.Org (a non-profit led by Spokesman and actor Matt Damon) from being able to
enter the country and officially provide the Ethiopian population with water resources and
sanitation. These groups specifically bring water resources such as wells and irrigation systems,
along with sanitation practices and buildings to allow the changes to be maintained and improved
for years to come.13
IV.3. Lack of Water Management
The poor infrastructure of Ethiopia has exacerbated the water management problems. With about
80 percent of Ethiopia’s population living in rural communities and being employed in
agriculture, these people are almost entirely dependent on groundwater sources.14 However, as
shown in Figure 5, during a drought these sources become depleted or almost eliminated
completely. While some companies and organizations have implemented wells or water systems
within these rural communities, these sources are not widely abundant. Therefore, in some cases,
individuals, particularly women and children, are forced to walk up to six hours to retrieve water.
Figure 5: Ethiopia: Groundwater Availability during Drought
Source: MacDonald, Calow, Nicol, Hope and Robins (1997).
12
Addis (2009).
World Vision (2011).
14
African Development Bank (2011).
13
116
V.
Effects of the Water Crisis
The Water Crisis has rooted its way into being one of Ethiopia’s top problems and a necessary
hurtle in the progression of the country’s overall economy. The effects of the water crisis include
(1) poverty, (2) sickness and disease, and (3) a lack of education.
V.1.
Poverty
Poverty in Ethiopia has turned into an overwhelming effect of the water crisis. As mentioned,
there is 85 percent of the population living in rural areas and virtually everyone in these areas
maintains a lifestyle directly intertwined with the drought-stricken agricultural sector. Between
1999 and 2004, more than 50 percent of all households experienced at least one major “drought
shock”. A “drought shock” can be defined as “a severe disturbance caused by events outside a
country’s control that have nonmarginal impacts on domestic economic values”. 15 These shocks
are directly related to the cause of poverty. In 2004, poverty would have been at least 14
percentage points lower (see Table 1), which is equivalent to about 11 million people that would
no longer be below the poverty line. With the shock of drought, causes the shock of a nonprofitable agriculture yield. With the country being mostly dependent on agriculture for the
sustainment of the economy, the poverty increases with a drought. This is why it can be
concluded that the poverty increases as a result of the drought shock and lack of water.
Table 1: The Impact of Drought Shocks in Ethiopia
Observed poverty
Predicted poverty with no drought shocks
Predicted poverty with no shocks of any kind
People in Poverty (percent)
47.3
33.1
29.4
Source: United Nations Development Programme (2007), Table 2.3, p. 85.
The spillover effects of the poverty resulting from the water crisis can be seen in a multitude of
areas within Ethiopia. Two of these areas are analyzed below as continued effects of the water
crisis: Sickness and Disease and Education. These effects of the water crisis also partly come
from the increased poverty. Due to an inability to buy medicine or receive medical attention, the
healthcare and health of Ethiopia’s population is suffering. The education sector of Ethiopia
could also be seen as affected by the poverty increase in the country because children are being
required to leave school in order to help provide for the family, whether that is working and
earning money or acquiring water and necessities. The spillover effects of poverty are so
intertwined with the effects of the water crisis that it is almost impossible to directly attribute
these problems to either one entirely independently.
V.2.
Sickness and Disease
While it seems that the lack of access to water could be one of the biggest problems the
Ethiopian people face, the reality is that sometimes even having access to water could be just as
detrimental. Water quality and sanitation in Ethiopia is an effect of the water crisis that causes
15
Benson and Clay (2009).
117
multiple complications in a variety of ways. The biggest problems relate to disease and sickness,
in which there are about three different types that are water-related:16

Water-Washed: Water-Washed diseases are considered those caused by lack of personal
hygiene. One of the most common of these diseases is shigella, which causes dysentery,
scabies, leprosy, trachoma, skin infections, and even ulcers.

Waterborne: Waterborne diseases are spread when humans ingest contaminated water.
Typhoid, cholera, hepatitis, and dysentery are the most common diseases resulting from
animal and human waste contaminated water. Diarrheal diseases are also seen regularly
and can be some of the most harmful. The symptoms and effects of diarrheal diseases can
be fatal for those that already suffer from inadequate immune systems.

Water-Based: Diseases are considered water-based when aquatic organisms transmit
them. Worms can infect humans by penetrating the skin during a bath or be ingested in
contaminated water. These worms cause schistosomiasis, which is the second most
deadly parasitic disease only behind Malaria. Four in every five people infected with this
disease are living within Sub-Saharan Africa.
V.3.
Lack of Education
Water contamination and lack of water have also taken tremendous effects on education in
Ethiopia. While 86 percent of males and 81 percent of females are enrolled in primary school,
the net attendance ratio for each is only about 45 percent.17 Children are finding themselves
unable to attend school because they are either sick or must chose finding water as the first
priority over their education. With children unable to attend school, they are unable to learn.
These children failing to receive an education now will result in them failing to become
employed in the future, which will increase the poverty rate. The ability for Ethiopia’s economy
to recover or even make progress is directly related to an educated population, if the population
is not becoming more educated, then Ethiopia has no hope in a better future.
VI.
Conclusion
While the water crisis in Ethiopia does have overwhelming causes and effects, there are things
that can be done to help lessen and hopefully obliviate the entire crisis in the future.
First and foremost is the need for the Ethiopian government to realize that the wellbeing and
survival of their people is more important than the consequences of receiving negative attention,
which is their main reason for limiting foreign aid after the 2008 draft. If the Ethiopian
government were to allow organizations like Water.Org and World Vision to re-enter the country
without the overbearing rules and regulations they would be able to provide help and assistance
to hundreds and even thousands of people. These non-profit organizations will be able to set up
water management systems and teach the Ethiopian people how to operate and run them which
will result in long-term benefit. These groups will be able to implement systems of sanitation and
educate about water-related diseases and infections to ensure an increase in health for years to
come. The Ethiopian government could also begin spending more money and efforts in these
16
17
National Academy of Sciences (2008).
World Bank (2011).
118
areas to help alleviate their countries problems, but in recent years that has either been something
they have been unable to do or unwilling to fully commit to accomplishing.
Regardless of who is the one to take action, it is still imperative that Ethiopia is provided with
water management and water sanitation resources. The reality is that water in Ethiopia is actually
rather abundant, but has a water crisis because at 50 cubic meters per person it has one of the
lowest reservoir storage capacities in the world (World Bank, Ethiopia Country Note). If
management sources and sanitation solutions were introduced and sustained, the country would
experience a complete turnaround in terms of poverty, education, health, and economy.
Ethiopia is suffering from a water crisis that has the potential to destroy the country beyond
repair. Due to frequent and abundant amounts of drought, the result of global warming; problems
within the government; and lack of water management the water crisis continues escalate. Under
these current conditions, the country of Ethiopia is experiencing sickness and disease, poverty,
and lack of education. With the future holding no foreseeable changes to these areas, the country
of Ethiopia is only set to have an increase in problems. The necessity for a drastic change is
becoming immediate. While hope is apparent in a variety of solutions, if Ethiopia continues to
attempt to solve the water crisis alone, they are likely fighting an unwinnable battle.
References
Addis, Kassahun (2009) “Drought and Famine: Ethiopia's Cycle Continues”, Time News Report,
World section (August 15, 2009; available at:
http://www.time.com/time/world/article/0,8599,1915544,00.html.
African Development Bank (2011) Ethiopia: Humanitarian Relief Assistance to Victims of
Drought (Tunis, Tunisia: African Development Bank (AfDB), Country and Regional
Department - East B, July).
Benson, Charlotte and Edward J. Clay (1998) The Impact of Drought on Sub-Saharan African
Economies: A Preliminary Examination (Washington, DC: World Bank).
Conway, Declan and E. Lisa F. Schipper (2011) “Adaptation to Climate Change in Africa:
Challenges and Opportunities Identified from Ethiopia”, Global Environmental Change,
Vol. 21, No. 1 (February), pp. 227-237.
Haile, Tesfaye (1988) “Causes and Characteristics of Drought in Ethiopia”, Ethiopian Journal of
Agricultural Sciences, Vol. 10, Nos. 1-2, pp. 85-97.
IRIN Humanitarian News and Analysis (2003) “Ethiopia: Warning of Serious Water Crisis in
Africa”, IRIN Internet Resource, Humanitarian News and Analysis from Africa, Asia and
the Middle East (December 8, 2003); available at:
http://www.irinnews.org/report.aspx?reportid=47575.
MacDonald, A. M.; R. C. Calow; A. L. Nicol; B. Hope; and N. S. Robins (1997) “Ethiopia:
Water Security and Drought”, London, UK: British Geological Survey: Natural
Environment Research Council; available at: http://wwwesd.worldbank.org/esd/ard/groundwater/pdfreports/Struggle_for_Water_App6_Pt2.pdf .
119
Morris, George (2007) “Ethiopia's Water and Sanitation Program”, New York, United Nations
Children’s Fund (UNICEF), UNICEF Background Brief, available at:
http://www.unicef.org/ethiopia/ET_WES_background.pdf.
National Academy of Sciences (2008) Safe Drinking Water is Essential: Waterborne
(Washington, DC: National Academy of Sciences, Global Health and Education
Foundation); available at: www.drinking-water.org/html/en/Treatment/Waterborne.html.
National Oceanic and Atmospheric Administration (NOAA), National Weather Service (2007)
“Climate Change”, Washington, DC: U.S. Department of Commerce, NOAA, National
Weather Service (October); available at:
http://www.nws.noaa.gov/om/brochures/climate/Climatechange.pdf.
United Nations Development Programme (UNDP) (2007) Human Development Report
2007/2008 — Fighting Climate Change: Human Solidarity in a Divided World
(Houndmills, Basingstoke and New York: Palgrave MacMillan); available at:
http://hdr.undp.org/en/media/HDR_20072008_EN_Complete.pdf.
Webb, Patrick; Joachim von Braun; and Yisehac P. Yohannes (1992) “Famine in Ethiopia:
Policy Implications of Coping Failure at National and Household Levels”, Washington,
DC: International Food Policy Research Institute (IFPRI), Research Report, No. 92;
available at: http://www.ifpri.org/sites/default/files/publications/rr92.pdf.
World Bank (2011) World Development Indicators (Washington, DC: World Bank); as posted
on the World Bank website (downloaded on March 26, 2012).
World Bank (2012) “Ethiopia: Climate Risk Factsheet”, Washington, DC: The World Bank;
available at: http://siteresources.worldbank.org/INTAFRICA/Resources/Ethiopia_Country_Note.pdf.
World Vision (2011) “Water Crisis”, Addis Ababa, Ethiopia: World Vision, Ethiopia, Internet
Resource (September); available at: http://changeeverything.wvpartner.us/watercrisis.html.
120