Press release for ESI


News Release No. 2009/064/WSP

Poor Sanitation Still Causes Heavy Health and Economic Losses in Indonesia

JAKARTA, August 19, 2008The economic costs of poor hygiene and sanitation in Indonesia reached an estimated US$6.3 billion, or 2.3 percent of GDP in 2006, according to a new report today released by the Water and Sanitation Program.

The study, Economics Impacts of Sanitation in Indonesia, finds that the lack of access to sanitation poses heavy financial and economic costs to the Indonesian economy, not only to individuals but also to the public and commercial sectors. 

Indonesia has made progress towards the MDG target, but at current trends, the country will fall short by 10 percent, or 25 million people,” said Senior Economist for the Water and Sanitation Program and author of the report Guy Hutton. “There is a need for greater investment in water and sanitation infrastructure and in promoting improved hygiene practices in Indonesia because of the impact on health and on the economy.”

Poor sanitation, including poor hygiene, causes at least 120 million disease episodes and 50,000 premature deaths annually, the report says. The resulting economic impact is more than US$3.3 billion (IDR 29 trillion) per year. Poor sanitation also contributes significantly to water pollution—adding to the cost of safe water for households, and reducing the production of fish in rivers and lakes.  The associated economic costs of polluted water attributed to poor sanitation exceed US$1.5 billion (IDR 13 trillion) per year.  

In 2006, Indonesia lost an estimated total of US$6.3 billion (IDR 56 trillion) due to poor sanitation and hygiene, equivalent to approximately 2.3 percent of gross domestic product (GDP), the report says.  

Health and water resources contribute most to the overall economic losses estimated in the study. These impacts are expected to cause financial losses to people who have to pay for health services, who pay more to access clean water supplies, or who may lose income from work absenteeism due to poor health. 

Basic water and sanitation services are vital to human life, and in this day in age, no one should be without such basic dignities,” said World Bank Water Sector Manager Abel Mejia. “This report attests to the fact that although there has been progress, much remains to be done to stop these preventable deaths and spread of disease.”

The World Bank currently manages a global portfolio of US$4.3 billion in water and sanitation projects that aim to improve access by poor people to improved water and sanitation services.  

The Water and Sanitation Program is a global, multi-donor partnership administered by the World Bank to alleviate poverty by helping poor people gain sustained access to improved water and sanitation services. Donors include Australia, Austria, Belgium, the Bill and Melinda Gates Foundation, Canada, Denmark, France, Ireland, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, the United Nations Development Programme, the United Kingdom, the United States, and the World Bank.

For a copy of the full report, or for more on the Water and Sanitation Program, please visit www.wsp.org.

For more on the World Bank’s activities in the Water and Sanitation sector, please visit www.worldbank.org/water.


Jakarta:  Yosa Yuliarsa,+6221 5299 3003, +6281 5840 70650
WashingtonChristopher Walsh, +1 202 473 4594