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Finance & Development
A quarterly magazine of the IMF
December 2006, Volume 43, Number 4

In Brief

Paying a high price for polluted water

The United Nations is pressing for a global action plan under the leadership of the Group of Eight (G-8) industrial countries to help resolve a growing water and sanitation crisis that causes nearly two million child deaths every year. Across much of the developing world, unclean water is an immeasurably greater threat to human security than violent conflict, according to the 2006 Human Development Report, produced by the United Nations Development Program (UNDP).

According to the report, released in November, 1.8 million children die each year from diarrhea that could be prevented with access to clean water and a toilet; 443 million school days are lost to water-related illnesses; and almost 50 percent of all people in developing countries are suffering at any given time from a health problem caused by a lack of water and poor sanitation. To add to these human costs, the crisis in water and sanitation holds back economic growth, with sub-Saharan Africa losing 5 percent of GDP annually—far more than the region receives in aid.

Yet, unlike wars and natural disasters, this global crisis does not galvanize concerted international action, says the report, entitled Beyond Scarcity: Power, Poverty and the Global Water Crisis.

"When it comes to water and sanitation, the world suffers from a surplus of conference activity and a deficit of credible action. The diversity of international actors has militated against the development of strong international champions for water and sanitation," says Kevin Watkins, the report's lead author.

"National governments need to draw up credible plans and strategies for tackling the crisis in water and sanitation. But we also need a Global Action Plan—with active buy-in from the G-8 countries—to focus fragmented international efforts to mobilize resources and galvanize political action by putting water and sanitation front and center on the development agenda," he says. The plan could be run by a small secretariat, along the lines of the Global Fund to Fight AIDS, Tuberculosis, and Malaria.

UNDP Administrator Kemal Derviş said that progress with water and sanitation was essential for achieving the Millennium Development Goals (MDGs). "Each one of the eight MDGs is inextricably tied to the next, so if we fail on the water and sanitation goal, hope of reaching the other seven rapidly fades," he said.

The report recommends that every government draw up a national strategy for water and sanitation and aim to spend a minimum of 1 percent of GDP. Public spending now is typically less than 0.5 percent of GDP, a sum dwarfed by the level of military spending.

The report highlights huge disparities in the prices that people pay for water. People living in urban slums typically pay 5–10 times more for a liter than people living in high-income areas. And people living in the poorest parts of cities like Accra and Manila pay more than the residents of London, New York, and Paris.

Teachers wanted

The world will need 18 million new teachers in the coming decade in order to meet demand worldwide for primary education—with sub-Saharan Africa facing the greatest challenge—to boost its teacher force by 68 percent, according to United Nations officials. "There can be no viable long-term solution to our education challenges and teacher shortages without investment in training and measures to promote respect for the teaching profession," said a statement signed by UN agency heads to mark World Teachers Day in October.

Already, nearly 100 million children are missing out on primary education—mostly girls, many trapped in child labor—which will compound a current accumulation of 800 million illiterate adults, representing 20 percent of the total adult population, the officials said. Arab states, mainly Egypt, Iraq, Saudi Arabia, and Morocco, will need to create 450,000 new teaching posts during this period, while countries in South and West Asia will need an additional 325,000 teachers, data collected by UNESCO showed.

Remittance flows top $268 billion

Recorded remittance flows have doubled in the past six years from $132 billion in 2000 to an estimated $268 million this year, according to the World Bank. "Counting just recorded remittances sent home by migrants from developing countries, we anticipate a rise to $199 billion in 2006, up from $188 billion in 2005," Dilip Ratha, Senior Economist in the Development Prospects Group of the World Bank, told a conference in London.

"Including unrecorded flows through formal and informal channels, the true size of remittances is even larger, making them the largest source of external financing in many developing countries," Ratha continued.

Events in 2007

January 13-26, Nairobi, Kenya
World Social Forum

January 24-28, Davos, Switzerland
World Economic Forum annual meeting

April 9-10, Doha, Qatar
Arab World Competitiveness Roundtable,

April 14–15, Washington, D.C.
Spring Meetings of the IMF and the World Bank

June 6-8, Heiligendamm, Germany
Group of Eight Summit

October 19-21, Washington, D.C.
Annual Meetings of the IMF and the World Bank