Piloting of a market-based approach to rural sanitation in Vietnam EASAN Vietnam Task Force November 2007
Background • Challenges in achieving MDGs & national targets for sanitation with conventional approaches • Resources available from community and private sector • Potential market for sanitation
The Project • Some figures: – 3 years (2003 -2006), US$ 538, 000 (DANIDA), IDE supported – 30 coastal communes, 6 districts, 2 provinces – 54, 000 rural families, 19% poor • Two research questions: (i) would rural families invest in latrines when a range of low-cost models are available? (ii) can promotional campaigns influence household decisions to invest and change their sanitation practices?
The Approach • Treat poor people as potential customers, rather than recipients of charity No material subsidy or handout • Using business principles to facilitate unsubsidized market systems in which the rural poor can participate Project to be implemented through profitable private sector/small micro enterprises
Conventional vs. Market Based Approaches Conventional Approaches Market-based Approaches Heavy subsidies for capital cost Subsidies for market development. Full capital cost recovery from users Standardization of models Decision making by external agencies Focus on infrastructure target Focus on centralized service provision A range of affordable options Users decide what and how to buy Focus on behavioral targets Focus on diversified local service provision
Project Processes 1 Situational Analysis 2 Market Assessment 3 Development of Market-Based Solutions 4 Implementation of Interventions 5 Monitoring & Evaluation
Key Market-Based Activities • Conduct market assessment • Select/adapt appropriate technology options for the poor • Build capacity for private sector service providers (local masons) • Develop, test and deliver marketing campaigns to stimulate demand adoption of hygiene practices • Facilitate demand-supply linkages
Implementation Structure District Steer. Commune Steer. Com. VP VP HH Mason VP Mason Village Promoter VP HH Mason Supply Commune Steer. Com. VP HH HH Demand Household without a hygienic latrine
Project Results • Coverage increase: from 16% (2003) to 46% (mid 2006) • ~16, 000 latrines/per year: ~4 times compared with average previous 4 years • Families invested more than USD 1 million • Leverage ‘Project : Household’ ratio = 1: 2 • 90 masons involved: 250, 000 USD profit
Lessons Learned • The market-based approach CAN work for sanitation: v Poor people’s willingness to pay can be stimulated v Local private sector can respond to market demands • Market-based approach shown to be more cost-effective and sustainable
Way Forward • Test/pilot ways to scale up recommendations in the WSP-supported study 2005 (not initiated yet) • Test scaling up at the provincial level (initiated in one northern province) • Replicating market-based approaches to very poor, ethnic minority communities (on-going in a central province) • Disseminate to other countries (planned for Cambodia next year through SAWAP)
Challenges to Scaling-up • High degree of segmentation requires tailored strategies and designs • Limited buy-in from social sector • Limited grass roots level implementation capacity
Never underestimate the poor’s willingness to pay!
Thank you!
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