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A Christmas wish: focus on toilets to create growth in 2015

Economic growth
By Paul Hodges on 23-Dec-2014

Toilets  Aug14a2.5bn people in the world still lack access to toilets, according to the World Health Organisation.  That’s down just 7% from the 2.7bn people without toilets in 1990.

What have we been doing over the past 20 years to allow this terrible situation to continue?  Why have we not focused on this area as a way of boosting economic growth and global health?  As the UN’s deputy secretary general, Jan Eliasson has warned:

This failure to address the issue of sanitation is potentially disastrous.

“Sanitation is cross-cutting: if you make progress on sanitation, then you dramatically improve the achievement of at least four other goals” :

  • “One of the main reasons for child mortality is diarrhoea and dysentery because of bad water and a lack of sanitation
  • “You get a much better way of working with maternal health issues: I can’t tell you how many women are dying in childbirth because of a lack of clean water
  • “You’ll affect education, because people can’t go to school when they have these huge problems
  • “You will have productive people who can go to work.”

Eliasson also argues that building toilets for women is fundamental to gender equality, education – and safety:

“In Africa, in particular, there is an unfortunate situation where girls don’t have toilets in their schools.  It’s very easy to arrange them for the boys, but girls require more privacy.

“And then you get into the area that we saw in that horrible example in India, when the girls went out at night and were raped and killed. This is done in innumerable cases: men preying on young girls who are going out like that.”

India under new Premier Modi is the great example of the sea-change in thinking that is now underway on this issue.  Major Indian companies such as Indian Oil and many others are now following his lead.

The Bill and Melinda Gates Foundation is similarly prioritising this key issue, awarding $100k prizes to universities for designing better toilets for the developing world.

Of course, moving into this new market represents a challenge.  But it will also be a stepping-stone to further, currently untapped markets focused on basic needs, as we described in Chapter 7 of ‘Boom, Gloom and the New Normal’.

The New Normal is now just around the corner.  The Boomer-led economic Supercycle will not return.  Companies and investors who continue to focus on producing ‘affordable luxury’ will soon find themselves out of business.

Too late, they will then wonder,  “Why did we not see what happening in front of our eyes?”.