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 ( ), 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 ApproachesMarket-based Approaches Heavy subsidies for capital costSubsidies for market development. Full capital cost recovery from users Standardization of modelsA range of affordable options Decision making by external agencies Users decide what and how to buy Focus on infrastructure targetFocus on behavioral targets Focus on centralized service provision Focus on diversified local service provision

Project Processes Situational Analysis1Market Assessment2 Development of Market-Based Solutions 3 Monitoring & Evaluation5 Implementation of Interventions4

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 and adoption of hygiene practices Facilitate demand-supply linkages

Supply Mason Demand HH Household without a hygienic latrine Implementation Structure District Steer. Com. Commune Steer. Com. VP Village Promoter

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:  Poor people’s willingness to pay can be stimulated  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!