The Role of the Utilities Sector in Expanding Economic Opportunity

Abstract

Utilities firms play integral roles in creating wealth in both the developed and developing worlds. Water and sanitation, for instance, are fundamental to human sustenance, health, and dignity, and by extension to economic opportunity. Affordable and reliable energy is integral to household productivity and the development of most industries, from agriculture to finance to health care to communications. Critical gaps in water, sanitation, and energy services exist in developing countries, particularly among the poor - whether in rural villages or urban slums. Worldwide, at least 1.2 billion people lack access to clean water,' 2.6 billion lack access to basic sanitation services,"" and 1.6 billion lack access to electricity." While the utilities sector, construed broadly, can include engineering, infrastructure, natural gas distribution, and even telecommunications, this report focuses on water, sanitation, and electricity. Within these sectors, the report focuses primarily on multinational corporations. It is nevertheless important to keep in mind the integral and often predominant roles that local, often publicly-owned utilities play in their home countries. These local firms can offer innovations and best practices of increasing relevance to the industry as it seeks to include the poor as consumers, suppliers, and distributors. It is also important to keep in mind that the poor have demonstrated their willingness to pay for water, sanitation, and electricity services. Indeed, according to the United Nations Development Programme (UNDP), the urban poor often pay five to 10 times more for bottled or trucked-in water than their wealthier neighbors pay for water piped into their own homes.' In Jakarta, Nairobi, and other developing world cities, poor consumers pay not only more than their wealthier neighbors but also more than residents of London and New York."