Creating and meeting demand for sanitation: lessons from Viet Nam

Government subsidised interventions have failed to provide rural poor people with sanitation. In Vietnam evidence is emerging that a market-based approach can be both more sustainable and cost-effective. A project has shown that willingness to pay for sanitation should not be underestimated, provided that quality products and services are offered and effectively promoted.

Areport from the World Bank’s Water and Sanitation Program for East Asia and the Pacific looks athow a non-governmental organisation, International Development Enterprises(IDE), has worked to stimulate the purchase and use of hygienic sanitation invillages in two provinces in central Vietnam.

IDE’s initial survey found that only 16 percent ofhouseholds in the project area were using hygienic latrines. Few masons knewhow to build them or could give customers accurate quotes. Householders did notconsider masons to be reliable sources of information and the masons did notregard latrines as a regular source of income.

Thesurvey found that households lacking a latrine prioritised buying a televisionset or a karaoke player, assets commonly found in rural households in Vietnam. The challenge forsanitation programmes is to persuade potentialcustomers to reorient their priorities so that improved sanitation also becomesan important asset to have for every household.

People in the project areaare appreciably poorer than most Vietnamese – their average per capita annualincome is only US$ 126. However, within a year of the project’s commencementhalf of those officially classified as poor had invested in sanitation – on averageUS$ 55 per household, 15 percent of their annual household income. None appliedfor loans available from state agencies because of the paperwork involved andbecause the minimum amount of US$ 200 was more then they needed. Most usedsavings from agricultural earnings or borrowed from relatives living in urbanareas.

Within a year of projectintervention there was a 100 percent increase in sanitation access compared tothe pre-project access rate. Unlike traditional sanitation projects no capitalcost subsidies had been employed to promote sanitation facilities.

Amongactivities undertaken by IDE to increase buyer’s awareness and stimulate demandwere:

• constructing demonstration models to show the variety of latrinesavailable at a range of costs and possibilities for people to reduce costs bycontributing labour and recycling existing materials
• helping small-scale operators to understand the size of the market and developbusiness strategies in response
• training village masons in technical and business skills, understandingcustomer behaviour and the importance of offering quality and service guarantees
• encouraging local government’s health service institutions to endorse themasons’ new credentials, thus boosting customers’ confidence in their abilities
• working with advertising professionals to design a public information anddemand creation campaign
• collaborating with community leaders to spread hygieneimprovement messages.

Theprivate sector can now continue to serve rural communities after IDE departs. Themasons have shown that they can supply spare parts, provide post-sale servicesand expand their customer base. The experience shows that:

• It is wrong to automatically assume that low-income families cannotafford improved sanitation on their own.
• When households spend a sizeable proportion of their annual budget andhave themselves chosen the kind of latrine, it is more likely they will lookafter it than if they were given subsidies.
• Using subsidies to develop business is more efficient than subsidisingsanitation hardware: once demand is stimulated and the market is established, localsuppliers will take over promotion.