The Impact of Access to Safe Drinking Water on GDP Growth Rates in Latin America

Jack Klukas

Introduction This paper analyzes how GDP growth rates are affected by the accessibility of safe drinking water in Latin America and the Caribbean. The twenty countries that were selected were chosen as countries in the region with the strongest data available. A list of the countries along with several tables and datasheets are included in an appendix. Latin America is the area of focus because the region has made great strides in the recent decades in water management, but a large proportion of its population still has less than satisfactory access. From 1960-2000, the percentage of people in this region with access to a sanitation method grew from 14 to 49. However, this still leaves over 100 million people with no access to any sanitation measures at all, according to the World Water Council (WWC, 2004). Therefore, this region is expected to provide insight into the effect that access to safe drinking water has on GDP growth. This expectation follows from the fact that there has been improvement in safe water access to measure against GDP growth, but there still remains a large portion of the region with poor access to measure against growth. This paper will analyze this effect by running regression on the relation between GDP growth rates and the variable of “access to water from an improved water source,” which will be defined later. The main areas of focus will be on the health effects of unsafe drinking water, the impact of unsafe drinking water or far proximity to nearest safe water source on education, and the direct and indirect costs of lacking safe drinking water. It is expected that countries with higher levels of access to water from an improved water source will have higher levels of GDP growth. The impact on health that the lack of access to safe drinking water has on a population can be detrimental to the economic growth of a country or region. Nearly 3.4 million people die every year due to water-related diseases, according to the UN Development Programme (Watkins, 2006). This is roughly equivalent to the entire city of Los Angeles. Due to sheer loss of life alone, it can be seen that health concerns caused by water-related issues have drastic effects on populations. The economic impacts of a lack of access to safe drinking water will be elaborated on this paper. The impact of unsafe drinking water on education is a less intuitive effect than the health concerns, but studies suggest that improving the quality of education standards in the developing world is dependent upon access to safe drinking water. For instance, the table below, published by the UN, illustrates the correlation between access to safe drinking water and the percentage of children reaching the fifth grade. For the readers’ reference, “safe drinking water” is defined by the Joint Monitoring Programme (JMP), an organization established by the WHO and UNICEF to monitor water sanitation and supply around the world, as water from an “improved water source.” Furthermore, “access” to safe drinking water is defined as the availability of at least 20 liters (the volume required to meet basic needs per day) of water per day per person from an “improved” source within 1 kilometer of the user’s dwelling (Fogden, 2009).

The table (Fogden, 2009) shows that correlation coefficients across the regions is greater than zero and therefore shows a strong link between high levels of access to safe drinking water and high levels of education.
More intuitively, there is an obvious negative effect on the income of people who live without access to safe drinking water and a negative impact on contribution to the economy as well. Populations who live without safe drinking water are riddled by health costs caused by frequent disease. The contribution to the economy is then greatly impacted due to the portion of the work force that has been