Water supply and sanitation in Latin America is characterized by insufficient access and in many cases by poor service quality, with detrimental impacts onpublic health.[1] Water andsanitation services are provided by a vast array of mostly local service providers under an often fragmented policy and regulatory framework. Financing of water and sanitation remains a serious challenge.
Access to water and sanitation remains insufficient, in particular in rural areas and for the poor. It also differs substantially among and within countries. According to the Joint Monitoring Program of theWorld Health Organization andUNICEF, in 2004 the share of the population which was connected to animproved water source varied from 54% in Haiti to 100% in Uruguay. Altogether, 50 million people, or 9% of the population of Latin America and the Caribbean did not have access to improved water supply,[2] and 125 million or 23% did not have access toimproved sanitation.[3] Increasing access remains a challenge, in particular given the poor financial health of service providers and fiscal constraints on behalf of central and local governments. After the Mediterranean, theCaribbean Sea is the second most polluted sea. Pollution (in the form of up to 300,000 tonnes of solid garbage dumped into the Caribbean Sea each year) is progressively endangeringmarine ecosystems, wiping out species, and harming the livelihoods of the local people, which is primarily reliant on tourism and fishing.[4][5][6]
As far as sanitation is concerned, only 51% of the population has access to sewers.[3] Only an estimated 15% of the collected wastewater finds its way intowastewater treatment plants, which often are not properly functioning.[7] 26% of the population has access to forms of sanitation other than sewers, includingseptic tanks and various types oflatrines.[3] Many scholars have found that while 20% of potable water is effectively treated in Latin America, there is sufficient infrastructure to treat 30% to 35% of water.[8]
The per capita water use inLatin America varies greatly among countries, among cities in the same country, and between urban and rural areas, and obviously among those with a house connection, a public tap or no improved water source at all. The average net urban water use (i.e. excluding distribution losses) was estimated at 240 liter/capita/day,[9] a level that is about as high as in the United States and almost twice as high as in Central Europe. The highest water use can be found in some utilities in Brazil and Argentina, where water resources are abundant and water use is almost 500 liter/capita/day.[10] The lowest water use is in Aguas de Illimani servingLa Paz, the capital ofBolivia, with less than 50 liter/capita/day. In rural areas water use is sometimes even lower than this level.
Studies in Latin American cities have shown that consuming water that has not been treated with adequate sanitation services introduces many human health issues to the public, especially to residents of poor and informal settlements. Low-income urban residents consuming polluted water are more likely to become ill with "poverty diseases" such as gastrointestinal and infectious water-borne diseases, as well as chronic diseases that degrade human health over time.[11] Consumption of contaminated water and lack of access to clean water are also associated with health disorders that stem from emotional and physical stress and water-use conflicts.[11] One of the most notable disease outbreaks in Latin America was the region's 1991-1993 cholera epidemic.[12]
One study in the shantytowns of Lima, Peru reported that approximately 15% of these poor settlements have in-house water provisions, which forces these residents to obtain water from informal water vendors not administered by local governments or utility companies. The quality of this water is unhealthy, their origin and state of sanitization is unclear, and this water has reportedly contained visible contaminants. Coupled with unsanitary storage tanks that further contaminate this water, water-borne gastrointestinal diseases affected 22% of this poor urban population at the time of the study.[11] Other studies in Argentina have reported that formal provisions of potable water by municipal governments have been found to contain dangerous levels of contaminants and bacteria. 10% of the country's population are exposed to consuming arsenic found in the water they consume, principally in areas that lack water treatment infrastructure.[11]
Even for those having access to water supply, poorquality of service is often experienced, in the form of intermittent supply, low pressure and poor drinking water quality.[13] However, differences in service quality between countries and between cities in Latin America are vast, and some service providers achieve a quality of service on par with developed countries.
Responsibility for water supply and sewerage service provision in Latin American countries is vested either in municipalities, or in regional or national companies.[14] Municipalities are in charge of water and sanitation service provision inBrazil,Colombia,Ecuador,Guatemala,Mexico andPeru. In some countries, such as in Colombia and Mexico, municipalities took over this responsibility from national service providers during thedecentralization of the 1980s. Subsequently, especially the larger municipalities have often created specialized municipal (and sometimes inter-municipal)public utilities, whose finances are kept separate from the city's finances. While in most cases the companies are public, in a few notable cases they are mixed or private companies operating underconcession,lease or management contracts.Chile andVenezuela are examples of countries that have created regional water companies; however, in the case of Venezuela, the United Nations reports that Venezuela remains one of the poorest in water service provision in this region.[15] State-level regional water companies also exist in all 26 states of Brazil, where they provide services on behalf of some (but not all) municipalities in each state. National public water and sewer companies, which have for the most part been created in the 1960s and 1970s, still exist inCosta Rica, theDominican Republic,El Salvador,Haiti,Panama,Paraguay andUruguay. About 90% of urban water and sanitation services in Latin America are provided by public entities. Many private concession contracts signed during the 1990s in Latin America have been either renegotiated or cancelled. The most notable cancellations include the concession for Aguas Argentinas inBuenos Aires, Argentina, and the concessions forCochabamba andLa Paz, Bolivia. Private and mixed companies, however, continue to provide services in many cities of Colombia, in most of Chile, some Brazilian cities, and inGuayaquil, Ecuador.
In rural areas, the provision of water services is usually the responsibility ofcommunity organizations (Juntas de Agua). While the infrastructure is funded primarily by transfers from the national governments, typically community labor and sometimes cash contributions are mobilized. When communities are associated in the choice of service level and other key choices, this instills a sense of ownership that makes it more likely that communities will maintain the infrastructure.
At the level of national governments, responsibility for policies in water and sanitation is typically fragmented between various Ministries, making the development of coherent policies in areas such as transfers to local service providers a challenging undertaking.[16] Theeconomic regulation of service providers is sometimes entrusted to Ministries and sometimes to autonomous regulatory agencies. These agencies sometimes cover only water and sanitation or multiple infrastructure sectors; they can be either at the national (as inChile,Colombia and Peru) or at the state level (as inArgentina and in some states ofMexico).[14] Their functions vary and may include tariff approvals, monitoring of service quality and handling of complaints. Environmental regulation is entrusted to environmental agencies and the regulation of drinking water quality to Ministries of Health.
Supporting the numerous community organizations that provide water and sanitation services in Latin America – mainly in rural areas – is a key public function that is often underestimated and neglected. Responsibility for this function, if it is defined at all, can be assigned to a government Ministry and its regional branches, a Social Fund or municipalities. OftenNGOs also carry out this function, either on their own initiative and with their own resources, or under contract by the government.
InHonduras support to community organizations (Juntas de Agua) is entrusted to the Social Fund FHIS, in cooperation with a national agency for technical assistance in water and sanitation (SANAA). InEl Salvador it is done by the Social Fund FISDL and various NGOs. In Peru it is carried out through NGOs and municipalities with the support of a national program (PRONASAR) implemented by the Ministry of Housing. In Paraguay it is the responsibility of a national agency in charge of promoting specifically water supply and sanitation in rural areas and small towns (SENASA). InEcuador it is carried out under a national program (PRAGUAS) by consultants working for the Ministry of Housing. In Panama such support is provided by the Ministry of Health. InHaiti such support is provided by NGOs, some of which are under contract with the national urban water agency SNEP and its specialized unit for rural areas. There thus is a wide variety of institutional arrangements to support community organizations, so that one cannot speak of a uniform model for such support in Latin America.
According to a 2006 World Bank study average water tariffs in Latin America are the highest of any region of the developing world. Tariffs are about four times higher than in South Asia, three times higher than in Eastern Europe and Central Asia and almost twice as high as in East Asia. However, tariffs are less than half as high as inOECD countries. Based on a sample of 23 major cities in Latin America the average residential water tariff for a monthly consumption of 15 cubic meter was US$0.41, equivalent to a monthly bill of only about US$6.[17]
It appears that most utilities in Latin America recover more than their operating costs and thus generate surpluses to self-finance a portion of their investments. The average recovery coefficient of operating costs among a sample of 48 private and public utilities from 8 countries was 1.64.[18] The highest coefficients of more than 2 can be found in utilities inChile, as well as inPereira andManizales inColombia.[19]
Despite the ostensibly high levels of tariffs and cost recovery estimated based on the sample of utilities analyzed, utilities do not generate sufficient revenue to finance a substantial share of their investments internally, or to be credit-worthy enough to mobilize commercial, long-termcredit.[20] The reasons include low levels of operational efficiency, as detailed further below, poor recovery of bills, poorprocurement practices andpolitical corruption.[21]
There are few studies on the affordability of water and sewer bills in Latin America. ThePan-American Health Organization (PAHO) analyzed multi-purpose household surveys conducted between 1995 and 1999 in 10 countries to assess the share of household income spent on water supply services.[22] These data show that the expenditures on water vary from 0.4% of total expenditures in rural Panama to 3.0% inKingston, Jamaica. For the households in the poorest incomedecile expenditures on water are higher, varying from 0.6% in rural Panama to 6.5% in Kingston, Jamaica. However, these figures have to be interpreted with caution. First, it is not clear how water expenditures were defined in the surveys. It seems that in some cases expenditures to buy bottled water and water from tankers were included, while in other cases they were excluded. Second, the sample includes both households with and without access to piped water systems. Therefore, especially in rural areas where coverage tends to be low, the shares are only a poor indication on the affordability of water bills. Third, it is not explicit if sewer bills are included in the analysis, although this is most likely the case, since sewer bills are always a surcharge on the water bill and are thus perceived by most households as part of their water expenditures.
The level of investment in water supply and sanitation in Latin America is tentatively estimated at 0.12% ofGDP in the 1990s.[24] A large share of these investments is needed to maintain and rehabilitate existing infrastructure. However, the World Bank has estimated that the investments needed to increase access to achieve theMillennium Development Goals (MDGs) in water and sanitation in Latin America by itself is 0.12% of GDP, not taking into account maintenance and rehabilitation.[25] It can thus be concluded that, on average, a significant increase in investments is needed to achieve the MDGs.
KfW has provided a €25.7 million funding agreement to eliminate marine trash and boost thecircular economy in the Caribbean'sSmall Island Developing States. The project will assist remove solid waste and keep it out of the marine and coastal environment by establishing a new facility under the Caribbean Biodiversity Fund (CBF).[4]
The modalities of financing water and sanitation infrastructure differ substantially between countries. Some countries that have reached higher levels of cost recovery, such asChile and some utilities inBrazil andMexico, rely on commercial credit financing. However, the vast majority of utilities relies on transfers from national governments. These can take various forms: InColombia municipalities are legally entitled to receive transfers calculated through a formula based on their costs and poverty levels; inMexico municipalities can apply for matching federal grants provided they fulfill certain conditions that vary by program; inEcuador municipalities receive transfers based on a formula that takes into account their choice of management model and improvements in cost recovery; and in other countries utilities simply receive transfers that can vary from one year to the other without any conditions. The level of transfers from national governments is highly variable and often far from sufficient to increase coverage and improve service quality.[26] Some countries pass loans from international financial institutions on to utilities in the form of credits. However, these international loans only account for a relatively small share of water and sanitation financing in Latin America.
There are wide differences in the operational efficiency among urban water and sanitation utilities in Latin America. The two most common measures of operation efficiency arelabor productivity andnon-revenue water (water losses). In terms of labor productivity, the most productive utilities have less than 2 employees per 1000 connections. They includeEPM in Colombia,SEDAPAL inLima, Aguas del Valle in Chile's 4th region, as well as Aguas deFormosa and Aguas deSalta in Argentina.[27] The utility with the lowest labor productivity in the sample is EPSEL from theLambayeque Region in Peru with more than 15 employees per 1000 connections. The average of the sample is about 5 employees per 1000 connections.
Concerning non-revenue water, the average of Latin American utilities in the sample considered is 40% and thus much higher than estimates of efficient levels, which vary between 15 and 25%.[28] The highest level (73%) is registered by Interagua, the utility servingGuayaquil in Ecuador. The lowest level of any larger utility with a high share of household metering, which is a precondition to accurately measurenon-revenue water, is registered in Aguas Cordillera in Chile with 20%.
There is a significant disparity in access to water and sanitation services between the rural and urban populations of Latin America. While there are inequities to water services between low- and high-income households in Latin American cities, urban regions often receive better water supply and sanitation services because of better political recognition, much greater population, and more developed infrastructure than rural communities. A study of households in eleven countries in the region between 1995 and 1999 showed that while 86.7% of the surveyed urban population had access to in-home drinking water, only 37.64% of the rural population had this service.[29]
Similarly, 7.02% of urban households lacked any water supply services, while 38.78% of the rural population did. There is a significant gap in access to clean water in Latin America between rural and urban regions: 26 million urban residents lacked any water supply services, compared to 51 million rural residents who lacked this. The study did show, however, that 23.58% of rural households had easy access to potable water, while only 6.28% of urban households did.[29]
What is true for both rural and urban populations in Latin America is that poor households always pay more, in proportional terms, than wealthy households to obtain potable water. This increased cost that poor households are burdened by is combined with the fact that they must also pay more for medical treatment from drinking contaminated water and may spend hours to retrieve water from distance sources.[29]
TheMillennium Development Goals (MDG) aim at halving, by 2015, the proportion of people without sustainable access to safe drinking water and adequate sanitation, from a base year of 1990. According to a 2006 World Bank brief, this is achievable for some countries in Latin America and the Caribbean, while it represents a mammoth task for others. According to theWorld Bank even those countries on track to achieve the MDG targets face tremendous challenges in improving service quality, in particular to attain continuity of supply and to increasewastewater treatment. To meet these challenges Latin American and Caribbean countries, according to the World Bank, would have to advance on several fronts, including:
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