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How does Bhutan’s Economy Look?

Tenzin Lhaden's picture
Bhutan Economic Update
Bhutan has maintained solid economic performance to date in 2017 but delays in hydropower construction may affect its economic outlook with growth expected to slow to just under 7 percent in 2018. 

Bhutan is one of the smallest, but fastest-growing economies in the world. Its annual economic growth of 7.5 percent on average between 2006 and 2015, placed the country 13th of 118 countries, compared to the average global growth rate of 4.4 percent.

This growth has been shared by a majority of Bhutanese, with extreme poverty dropping from 25 percent in 2003 to 2 percent in 2012, based on the international poverty line of $1.90 a day (at purchasing power parity). This is among the rate in South Asia and compares favourably to the regional poverty rate of 19 percent. Equally impressive improvements were made in access to basic services such as health, education and asset ownership.

The recent developments on strong lending growth, inflation, exchange rates and international reserves show that Bhutan maintains a solid and stable growth in the first half of 2017. Gross international reserves have been increasing since 2012, when the country experienced an Indian rupee shortage. Reserves exceed $1 billion, equivalent to 10 months of imports of goods and services in mid-2017 which makes the country more resilient to potential shocks. This is also very much in line with the requirement spelled in the 2008 Constitution which outlines minimum reserve requirements. The Bhutanese ngultrum, pegged to the Indian rupee, have been stable or slightly appreciating against the U.S. dollar.

Despite recent solid growth and macroeconomic stability, we need to carefully monitor its Development. According to the latest Bhutan Economic Update, the hydropower construction and the implementation of the 2016 Economic Development Policy are expected to support this solid growth during the next few years. However, with confirmed delays in the completion of two hydropower projects, the contribution of the hydropower sector to growth will be lower than the originally projected. Therefore, the World Bank revised down its growth forecasts in 2019/20 by a few percentage points to 7.6 percent, still among the fastest in the world.

Water flows through development – big ideas from World Water Week

Guangzhe CHEN's picture
Guangzhe Chen, Senior Director, the World Bank’s Water Global Practice, 
speaks at the opening plenary of World Water Week 2017. Credit: Tim Wainwright

It was inspiring to see so many committed water practitioners at World Water Week in Stockholm the last week of August, coming together to share experiences and advance global action to achieve the Sustainable Development Goal of safe and accessible water and sanitation for all (SDG6) by 2030.  As we know, access to water and sanitation is key to thriving communities. It determines whether poor girls are educated, whether cities are healthy places to live, whether industries grow, and whether framers can withstand the impacts of floods and droughts.

Without it, we are limiting our full potential. In fact, today we face a “silent emergency”, with stunted grown affecting more than a third of all children under five in countries such as Bangladesh, Indonesia, Niger and Guatemala. This was presented in the new World Bank report WASH Poverty Diagnostics, provides new data on water, sanitation and hygiene (WASH) for 18 countries and finds that we get the biggest bang for the buck when we attack childhood stunting and mortality from many angles simultaneously, in a coordinated way. While improving water and sanitation alone does improve a child’s well-being, the impacts on child height are multiplied when water, sanitation, health, and nutrition interventions are combined. The report also pinpoints the geographical areas in a country where access to services are low or missing completely, and suggests that to move the needle on improving poverty indicators, policies need to be implemented and resources have to be better targeted to reach the most vulnerable.

Africa Hydromet Forum: Improving climate and weather forecasting to build disaster resilience

Ede Ijjasz-Vasquez's picture

Photo: JC McIlwaine / UN Photo

There is no doubt that extreme weather events are increasing in frequency and severity. In Africa alone, 90% of all disasters in recent decades have been driven by weather and climate. While we cannot stop them from striking, we can tell people about them, managing the risk that they present – by advancing our work in hydromet.

Hydromet is the union of hydrology and meteorology, combining water, weather, and climate studies as a formidable force in a government’s ability to accurately understand, forecast, and communicate storms and hazards. This means that something as simple as an accurate weather forecast, or the monitoring of river levels could make the difference between a farmer losing his/her entire crop or a fisherman knowing when best to head out to sea.  

Because of the lack of high-quality hydromet services, countries suffer GDP losses every year from flooding, cyclones, and other storms. Madagascar and Nigeria, for example, each lost more than 1 percent of GDP in a single year from storms.

However, instead of looking at potential future damages, we must look at how hydromet services can help cities and communities flourish with greater resilience today:

How can we make water and sanitation more inclusive and accessible?

Kamila Anna Galeza's picture

“What’s wrong with this picture?” Louisa Gosling of WaterAid asked the participants at her training on Disability-inclusive Water Operations at the World Bank Water Week in March 2017. She pointed to a photo of a woman standing on the wall of a well. It was round and high, the ground around it muddy, and there was no lifting mechanism in sight.

More pictures followed… latrines and water sources with steep steps, narrow doorways, unstable construction without handles or rails. The more pictures we saw, the clearer it became what was wrong - all the facilities shown were inaccessible and dangerous, quite likely impossible to use for many people. 

Photo Credit: WaterAid

The biggest bang for our limited water and sanitation buck: can investing in small towns lead the way?

Aroha Bahuguna's picture



While the share of poor people in Sub-Saharan Africa decreased from 56 percent in 1990 to 43 percent in 2012, the region’s rapid population growth outpaced the decrease in poverty, resulting in higher number of poor people than before. More specifically, Africa’s urban population is expected to triple in size in the next half century, which is putting pressure on scarce resources in cities, exacerbated by capacity, budget and governance bottlenecks. The densely-populated areas with low levels of water and sanitation services pose a serious threat to public health – cholera epidemics have broken out in urban areas in several African countries in recent years.

What do "Sustainable Cities" look like to you? Enter our global photo contest by October 6 (deadline extended to October 15)

Dini Djalal's picture
Also available in: Español | Français | العربية | 中文
Enter our global photo contest by October 15

Building healthy and well-functioning cities and communities that continue to thrive for generations is the goal of the Global Platform for Sustainable Cities (GPSC), a collaboration that unites cities across continents in their endeavors towards achieving sustainable, resilient development.
 
What would these cities and communities look like to you? The GPSC, its partner cities, and the Global Environment Facility (GEF) invite you to articulate sustainability through the medium of photography.


Whether it be elements of your city that represent sustainability, or a moment in time that captures the spirit of inclusive, resilient, and sustainable urban development, we invite you to share your vision with us, through your photographs.
 
The winners of the photo competition will each win exciting prizes: a $500 voucher for purchasing photography equipment, as well as a chance to be recognized at an award ceremony and have their photographs featured in the World Bank / GPSC’s online and print materials.
 
Here’s how the Sustainable Cities Photo Contest will work:

Starting life strong in slums: the role of engaging vulnerable groups on sanitation and nutrition

Claire Chase's picture
This blog is co-authored with Lawrence Haddad, Executive Director, The Global Alliance for Improved Nutrition (GAIN)

Other co-authors: 
Beatrice Montesi, GAIN  
Martin P. Gambrill, The World Bank 
Rebecca Jean Gilsdorf, The World Bank

 
Children in a slum in Dhaka, Bangladesh.
Credit: UN Photo/Kibae Park

Crowded slums, poor sanitation and unhealthy diets.  It’s a potent cocktail and for too many families across the world, a daily reality.  Right now, an estimated one billion people live in slums and that number is expected to double by 2030. Slums are where the many deprivations facing the urban poor collide, including lack of access to clean drinking water, sanitation, safe and nutritious foods, sufficient living space, durable housing and secure tenure (UN Habitat).  They’re where human waste is routinely emptied into streets, canals, and garbage dumps. And where overcrowding and low rates of immunization and breastfeeding combine to exacerbate the already perilous problems children face.

Children growing up in these surroundings are at a higher risk of death and disease and are more likely to be chronically malnourished (Ezeh et al. 2017). For example, forthcoming World Bank research from Bangladesh shows that children living in slums are 50 percent more likely to be stunted than children living in other urban areas. This doesn’t just have implications for today - children who are stunted early in life go on to learn and earn less, and face a higher risk of chronic disease as they grow older. Tragically, these effects are often passed on to offspring, trapping families in poverty and malnutrition for generations, as per findings in a forthcoming World Bank report called Uncharted Waters.

Leveraging commercial finance for water: will it hurt the poor?

Sophie Trémolet's picture
Water investments are lumpy and costly: financing is essential to spread the costs of these investments out over time. For water, development finance institutions still provide the bulk of such financing. It can no longer be the only one, however. The costs of extending universal access to safe water and sanitation has been estimated at US$ 114bn per year, which is a substantial increase compared to what was invested to reach the Millenium Development Goals. In contrast, in 2014 total official development finance for water, including grants and loans with varying degrees of concessionality, reached a mere US$18 bn per year, three times more than in 2003 but still woefully insufficient to meet all investment needs.

To meet the Sustainable Development Goals, governments will need to better target their investments and leverage more financing from private sources, including from households that can afford it (via more realistic and fair tariff policies and incentives to invest in things like toilets) and from commercial finance providers, including microfinance institutions, commercial banks, bond investors or venture capitalists.

A this year’s Stockholm World Water Week, the World Bank is releasing  a report which provides guidance to governments and private financiers on “Easing the Transition to Commercial Finance for Sustainable Water and Sanitation”. This report brings together strands of analysis and key messages that were developed for the High Level Panel on Water and for the Sanitation and Water for All Partnership in the run-up to the 2017 High Level Ministerial Meetings hosted by the World Bank.
Download Easing the Transition to Commercial Finance
for Sustainable Water and Sanitation

Learn more about the session Private Finance and
Equitable Delivery of WASH services
 at World Water Week.  

Watering the Future: Seizing Water’s Potential to Support Development and Stability in the Middle East and North Africa

Torgny Holmgren's picture
Water in Gaza - Ahmad Dalloul, Palestinian Water Authority

History repeats, history rhymes and sometimes history regresses. Wandering through cities and fields in the Middle East and North Africa a thousand years ago, you would have been struck by the security of water supplies, the irrigation enabling highly productive farms and governance structure in place to allocate and value water in a sustainable way, supporting a flourishing civilization.

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