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Investing in Basic Improvements in Sanitation Yield Major Economic Gains for East Asia’s Poor Households

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Today the Water and Sanitation Program, a multi-donor partnership administered by the World Bank released a series of reports pointing out that households that invest in basic sanitation have a better quality of life and could increase up to seven fold the return on investment in economic benefits.
 
The reports, which are the second phase of the Economics of Sanitation Initiative (ESI) launched initially in East Asia in 2007, found that all types of sanitation improvement evaluated have benefits that exceed costs. The new reports analyze benefits and costs of sanitation interventions in Indonesia, Cambodia, China (Yunnan Province), Philippines, and Vietnam.
 
They recommend that countries:
 

  • Intensify efforts to improve sanitation access for the entire population by focusing on developing viable sanitation markets, collective behavior change, and disseminating widely information on household sanitation options and models.
  • Go beyond basic sanitation provision in contexts where pit latrines are not feasible and where populations demand higher levels of service. At the same time, decision-makers should be aware of the full range of sewage removal and treatment options and their related costs and benefits, in order to avoid investing in expensive technologies that are difficult and costly to sustain.
  • Promote evidence-based sanitation decision-making.  The variation in economic performance of options between different sites suggests that careful consideration of site conditions and local demand and preferences is needed to select the most appropriate sanitation option and delivery approach.

 
Decisions should take into account not only the measurable economic costs and benefits, but also other key factors, including intangible impacts and socio-cultural issues that influence demand and behavior change, availability of suppliers and private financing, and actual household willingness and ability to pay for services,

lead author Guy Hutton, economist and WSP consultant said.
 
The high net benefits from low-cost sanitation options, such as pit latrines, suggest these technologies should be centerpiece to increasing access for rural households, the reports said.  For example, among the various sanitation options in Indonesia’s rural areas, the most favorable economic performance was for wet pit latrines.  The annual economic rate of return was more than 100 percent, requiring less than one year to recover the economic value of the initial investment costs.
 
To improve quality of life in East Asia’s increasingly populated cities, where pit latrines have limited feasibility, decision-makers need to take into account the economic benefits from improved waste removal and treatment options, the reports said.
 

The first phase of ESI demonstrated for the first time the huge economic toll of poor sanitation, up to seven percent of GDP in some countries,” said WSP Senior Regional Team Leader for East Asia, Almud Weitz.  “The findings from phase two give countries, more specifically sanitation decision-makers, improved evidence on the costs and benefits of alternative sanitation options in different contexts.
 
Despite significant growth among some countries in East Asia, access to, and the quality of sanitation facilities are closer to that of comparable low-income countries.  For example, 60 million people in Indonesia still defecate in the open.
 
For a copy of the reports, visit: http://www.wsp.org/wsp/content/economic-impacts-sanitation
 
The Water and Sanitation Program (WSP) is a multi-donor partnership created in 1978 and administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services.  WSP’s donors include Australia, Austria, Canada, Denmark, Finland, France, the Bill & Melinda Gates Foundation, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom, United States, and the World Bank.
 
The World Bank Group is the largest external financier (US$7.5 billion in fiscal year 2011) in water supply and sanitation, irrigation and drainage, water resources management, and other water-related sectors, and provides strong advisory and analytical support to client countries.
 
 
Contacts:
In Washington: Christopher Walsh, +1 (202) 473-4594, [email protected]
In Stockholm:  Sara Sultan, +1 (703) 474-2355, [email protected]
In Jakarta: Yosa Yuliarsa, + 62-21-5299-3179  [email protected]
For Broadcast Requests: Natalia Cieslik, +1 (202) 458-9369, [email protected]
 
 

Finance

Guarantor loans surge to top of UK financial complaints chart

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Guarantor loans surge to top of UK financial complaints chart 1

By Huw Jones

LONDON (Reuters) – Complaints about guarantor loans by companies such as Amigo soared last year, eclipsing grievances over payment protection insurance (PPI) that have dominated for more than a decade, Britain’s Financial Ombudsman Service (FOS) said on Wednesday.

Consumers have turned to loan providers since last March as lockdowns to fight the COVID-19 pandemic strained their finances.

“For more than a decade, the Financial Ombudsman Service received an unprecedented number of complaints about PPI. We’re now seeing thousands more complaints about credit – including about guarantor loans,” FOS said in a statement.

Guarantor loans require a friend or family member to guarantee they will take on repayments if the borrower falls behind. Complaints about this type of loan reached more than 10,000 in October to December, up from just over 300 in the same period a year before, the FOS said.

Complaints about other types of home credit jumped to over 6,000 from 430 over the same period.

The complaints about consumer loans usually focused on inadequate affordability checks, FOS said.

Amigo describes itself as Britain’s leader in guarantor loans. FOS said complaints about the company totalled 12,854 in the second half of 2020, up from 1,163 in the first half.

Amigo said it launched a scheme of arrangement, or court-approved compensation process, in January after receiving a high number of complaints last year.

“We are a new leadership team that wants to correct past mistakes in a way that is fair and equitable to all our customers – including our 700,000 past borrowers and guarantors,” Amigo said in a statement.

Provident Personal Credit Ltd was the second most complained about company, with 10,390 complaints in the second half of 2020, FOS said. Provident had no comment.

PPI became Britain’s costliest retail financial scandal that dominated FOS work until the final deadline for complaints passed in August 2019.

(Reporting by Huw Jones; editing by Barbara Lewis)

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Sunak promises to do ‘whatever it takes’ to shield the economy

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Sunak promises to do 'whatever it takes' to shield the economy 2

LONDON (Reuters) – British finance minister Rishi Sunak plans to say in a budget speech on Wednesday that he will do “whatever it takes” to support the economy, and that the task of fixing the public finances will only begin once the country is recovering from the COVID-19 crisis.

“We’re using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people,” Sunak will say, according to excerpts of the speech to parliament released by the finance ministry on Tuesday.

“First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis,” he said in the excerpts.

“Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that. And, third, in today’s budget we begin the work of building our future economy.”

Britain has suffered the biggest COVID-19 death toll in Europe and the heaviest economic shock among big rich countries, according to the headline measures of official data, after shrinking by 10% last year, its worst slump in three centuries.

Sunak has so far spent almost 300 billion pounds ($419 billion) on emergency support measures and tax cuts.

But Britain has also rushed out Europe’s fastest COVID-19 vaccination programme, raising the prospect of an economic bounce-back once its current, third lockdown is relaxed.

Sunak said in media interviews on Sunday that he would not rush to start addressing Britain’s yawning budget deficit, which is approaching 400 billion pounds – its highest as a share of the economy since World War Two.

Prime Minister Boris Johnson plans to lift lockdown measures gradually, starting with next week’s reopening of schools in England, before most measures are removed by late June.

Sunak is expected to announce an extension of his emergency support measures, including huge income subsidies that are on track to cost more than 100 billion pounds, to provide a bridge for the economy until then.

But he has also said he will “level with people” about how Britain’s 2.1 trillion-pound debt pile would carry on growing without action, which is likely to mean future tax increases.

(Writing by William Schomberg; Editing by Catherine Evans)

 

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UK gilt issuance to be second-highest on record at almost 250 billion pounds – Reuters poll

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UK gilt issuance to be second-highest on record at almost 250 billion pounds - Reuters poll 3

By Andy Bruce

LONDON (Reuters) – Britain is likely to sell nearly 250 billion pounds ($347 billion) of government bonds in the coming financial year – the second-highest total on record – to help power an economic recovery from the COVID-19 pandemic, a Reuters poll of dealers showed on Tuesday.

The survey of all 15 wholesale primary dealers, or banks tasked by the government with creating a market for its bonds, pointed to gilt issuance of about 247.2 billion pounds for the 2021/22 financial year starting in April.

Such a sum marks a sharp drop from the 485.5 billion pounds of gilts that the United Kingdom Debt Management Office (DMO) plans to issue in the current 2020/21 year to finance the economic response to the COVID-19 pandemic.

Finance minister Rishi Sunak is due to deliver his budget around 1230 GMT on Wednesday, after which the DMO will publish its 2021/22 gilt issuance remit.

Sunak has said he would not rush to fix the public finances as he readies a budget, which will add more borrowing to almost 300 billion pounds of COVID-19 spending and tax cuts.

In November, the Office for Budget Responsibility (OBR) forecast borrowing in 2020/21 would reach 393.5 billion pounds, or 19% of GDP, a peacetime record. The latest official data suggests borrowing will fall below this, partly because more taxpayers than expected have opted against deferring payments to 2021/22.

The poll showed Sunak is expected to announce a budget deficit forecast for 2021/22 of 180 billion pounds, 16 billion pounds more than the OBR had predicted in November.

“Our current estimate is that the latest lockdown will ‘cost’ around 16 billion pounds in terms of additional fiscal support,” said RBC economist Cathal Kennedy.

He cited the fact that more workers are now furloughed than the OBR had assumed in November, as well as expanded support for self-employed people and business grants announced in January.

In addition to the budget deficit, the government must also refinance 79.3 billion pounds of gilts due to mature in 2021/22.

As in the current year, much of the issuance will be soaked up by the Bank of England’s asset-purchase programme, which is due to buy around 100 billion pounds of government debt during the next financial year.

The poll suggested the government will finance borrowing almost entirely through gilts in the next financial year, rather than additional issuance of T-bills or via the government’s retail investment arm.

The DMO is likely to ramp up its issuance of inflation-linked gilts in 2021/22 to around 14% of the total, compared with 7% in the current financial year, the poll showed.

The DMO reined in sales of index-linked gilts through most of 2020 due to uncertainty caused by a review into the future of the retail prices index measure of inflation, which is used to price the bonds.

“Given pent-up demand, we think that this target is achievable,” said Deutsche Bank analysts Sanjay Raja and Panos Giannopoulos.

The dealers did not expect much change in the split between short, medium and long-dated gilts. Britain already has a longer average maturity for its debt than any other major economy, but the recent jump in global bond yields has prompted some commentators to say the DMO should do more to lock in low rates.

The government has also said it will issue the first “green gilts” – bonds to finance environmentally friendly projects – in 2021/22. Most respondents expect one or two bonds to be issued, of around 10 billion pounds in total.

(Reporting by Andy Bruce, editing by Larry King)

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