Water’s crucial role in shared prosperity and inclusive growth

Globally, there are widespread disparities in access to water resources and services, and in the impacts of climate-related water shocks. A considered response is needed to improve water access and climate resilience, while alleviating poverty and boosting shared prosperity.

Water security is the foundation of shared prosperity. Clean water is essential for drinking and food production, which are the basis for a healthy, productive life. It is a key input for economic production and growth, particularly in the agricultural sector. Water is also vital for healthy ecosystems and makes our uniquely blue planet livable.

However, the world is facing a water crisis, and water “haves” and “have nots” are contributing to rising global inequality and fragility. In 2022, 2.2 billion people lacked access to safely managed drinking water, 3.5 billion lacked safely managed sanitation, and 2 billion lacked basic hygiene services. We must act quickly, collectively, and on a much larger scale if we are to meet the water-related Sustainable Development Goals by 2030.

A new joint publication between the World Bank and the Indonesian government, Water for Shared Prosperity, explores the connection between water and inclusive growth, providing insights that can inform practical solutions to the crisis and better ways of managing our precious water resources. It also highlights the large disparities that exist within and between countries in access to water services and exposure to climate risks.

Disparities in water access remain widespread

There has been an improvement in access to water and sanitation services in all country income groups. However, in low-income countries population growth has outpaced the increase in the rate of access. Between 2000 and 2022, the number of people without access to safely managed drinking water and basic sanitation increased by 197 million people and 211 million people, respectively. Moreover, in these countries access to improved water and sanitation services at schools and health facilities has not increased much since 2014.

The report shows that high poverty overlaps with low access to drinking water and sanitation. Globally, about 1.6 billion people live in hotspots marked by high poverty and low access. This figure is projected to double by 2050 if current trends continue.

Climate change will exacerbate water risks worldwide, as rising temperatures lead to more unpredictable weather and extreme weather events. The report shows that developing countries—which are least able to adapt—experience more widespread and intense droughts, face a higher risk of floods, and experience longer-lasting floods than developed countries. Within countries, poor households are more vulnerable to climate shocks. 

Low-income countries also face higher risk of seasonal variability of available water supply than other income groups. This variability could have implications for job creation and economic growth, given that nearly 60 percent of people in low-income countries work in agriculture.

Pro-poor and inclusive interventions to improve water security

To ensure that water resources, infrastructure, and services are adequately managed, developed, and delivered, the report recommends three areas of intervention that can significantly improve water security while reducing poverty and increasing shared prosperity.

First, enhancing resilience to floods and droughts. Actions include establishing robust and inclusive early warning systems; developing insurance programs for weather risks and mitigating exposure to hydro-climatic risks through regulations and financial support; and scaling up social protection schemes to help vulnerable communities impacted by floods and droughts.

Second, improving water resources development, management, and allocation. This can be achieved by scaling up nature-based solutions through innovative financing schemes and evidence-based approaches; improving coordination and cooperation for water allocation through information sharing and financing incentives; and adopting water accounting to inform water allocation decisions.

Third, improving equitable and inclusive delivery of water services. Actions include introducing institutional and tariff reforms to mobilize investment; establishing participatory water governance to ensure transparency and accountability; creating an enabling regulatory and policy environment to promote innovations; and improving coordination across institutions responsible for water, health, education, and urban planning.

Extending services to rural communities in Indonesia

Water for Shared Prosperity showcases Indonesian innovations in addressing water insecurity and boosting shared prosperity. One example of improving equitable and inclusive delivery of water services is Indonesia’s community-based water supply program, PAMSIMAS. This national program aims to increase the number of underserved rural and peri-urban populations accessing sustainable water supply services as part of the country’s goal to achieve universal access to water supply. 

Supported by the World Bank between 2006 and 2022, PAMSIMAS provides training and grants to communities to plan, build, and manage water service systems. In 2016, the program introduced a disability-inclusive approach to ensure facilities cater for people with physical disabilities. Since inception, PAMSIMAS has provided more than 24.4 million people with access to improved water facilities and 16.4 million people with access to sanitation facilities. These results demonstrate the transformative power of community involvement, inclusivity, and sustainable practices.

The World Bank is prioritizing action on water

Water security is one of the World Bank’s priorities in its mission to end extreme poverty and boost shared prosperity on a livable planet. To drive meaningful change, it aims to strengthen water security and climate adaptation through integrated planning, reforms, and investment in water supply, sanitation, irrigation, water resources management, and disaster risk reduction. Importantly, the World Bank is committed to prioritizing speed, scale, and impact in its efforts to help countries develop inclusive water solutions that benefit all segments of the population, with the goal of achieving a water-secure world for all.