Micro-credit financing for water infrastructure, but excludes slum-dwellers

Jakarta will continue to face water supply and sanitation challenges, but some new financing schemes have emerged. However, they are marginally successful at supporting slum dwellers and could widen a healthy-sick, rich-poor inequality gap.

The Strategic Foresight Group writes,

"Some innovative schemes have been developed to make it easier for low-income families in Jakarta to have easier access to clean water but so far, they have met with limited success. A small credit Shariah bank has signed a deal with one of Jakarta’s water suppliers to institute a micro-credit financing system to facilitate the installation of a citywide pipeline network.

Greater Jakarta’s current population of about 25 million is projected to swell to 35 million by 2020. Since the slum population is also expected to increase rapidly, the existing water problems in the city will be aggravated. Slum residents and the impoverished will face severe water shortages due to lack of piped water and will be forced to use groundwater or contaminated water for drinking and other purposes, causing serious health issues."

Implications

The Strategic Foresight Group points out, "The catch is that only families with legal ownership of their land can avail of this credit system. The slum population will be excluded since they have no ownership of land." IFTF adds that this new arrangement includes clamping down on illegal water piping and water theft, which is one of many ways the poor have access to clean water. This new scheme could even further cut out the urban slum from safe water and exacerbate the healthy-sick rich-poor divide.