Economic Growth Education Environment Gender Issues Population & Health Democracy & Governance

I. Development Challenges in the ANE Region

Due to its physical, social, and economic diversity, the Asia and Near East region (ANE) defies easy categorization. Its boundaries encompass rich natural resources, but these are unevenly distributed, and many countries suffer from serious resource scarcities. While parts of the region have experienced rapid economic growth, this growth has often come at a cost of sacrificing environmental quality, public health, and longer-term economic sustainability, due to urban and industrial pollution and depletion of natural resources.

Demands on natural resources and environmental systems in the ANE region are intensifying due to population growth, urbanization, and industrialization. Including China, the ANE region's population is approximately 3.5 billion, comprising 60 percent of the world's total, and growing at over 2 percent per year. Much of the growth is in urban centers, where the provision of jobs and services strains the infrastructure and political fabric of ANE societies. Air and water quality especially suffer from the rapid growth which has overwhelmed the capacity of urban environmental infrastructure and public health systems to respond.

Throughout the ANE region, there is increasing attention and dedication to sustainable development through environmental protection and conservation. Sustaining progress will require efforts to deepen support for open, participatory, and transparent processes, to encourage decentralization and the resulting empowerment, to build local capacity and enhance participation, and to develop new and innovative partnerships at all levels and between all segments of society.

II. Environment Sector Overview

To address the major environmental issues occurring in the ANE region, USAID focuses its environmentally resources principally on the following five priority areas:

• prevention and control of urban and industrial pollution
• improved management of water and coastal resources
• management and conservation of tropical forests and biodiversity
• promoting environmentally sound energy production and use
• reducing emissions of greenhouse gases.

To address the above issues, in 1997 USAID supported 25 environmental strategic objectives (SOs) with total obligations of approximately $333 million.

Most USAID Missions in the ANE region have at least one environmental strategic objective. In addition, the USAID addresses selected issues through two regional activities:

• The "U.S.-Asia Environmental Partnership" (focusing on industrial pollution prevention); and
• Fostering Resolution of Water Resource Disputes (FORWARD) project

Trends and Issues:

Rapid industrial and urban growth is resulting in increased threats to human health from air and water pollution. Asia's urban population will surpass rural numbers early in the next century.

• 13 of the 15 cities with the worst air pollution in the world are in Asia, resulting in at least 1.5 million premature deaths per year (possibly as much as 2 million per year in China alone, according to a recent World Bank study).
• Levels of suspended particulates and lead from transport and industry are a serious health problem in a number of major ANE cities: Bombay, Calcutta, Karachi, New Delhi, Bangkok, Cairo, Manila, Kathmandu.
• In India's major cities less than 5 percent of total wastewater is collected and less that 1/4th of that is treated.

There is increasing likelihood of global climate change from the rising use of energy and high rates of deforestation in all regions of the world.

• Global climate change increases the potential for sea level rise with major implications for heavily settled coastal areas in India, Bangladesh, and Sri Lanka, as well as for unpredictable shifts in agricultural productivity, loss of animal and plant species, and ecosystem changes. South Asia has an important role to play in fostering preventive action.
• Asia's total carbon dioxide emissions are expected to surpass North America's by 2000 (they already exceed all other regions -- and are more than Latin America, Africa, and the Middle East combined). China and India are the two fastest growing sources of greenhouse gasses worldwide.
• Energy consumption and carbon emissions in Egypt and our Asia presence countries have increased exponentially over the last 20 years. Current levels are further projected to double by 2015.
• India is the second fastest growing source of greenhouse gasses worldwide after China. The impacts from increased fossil fuel use, principally coal, can only worsen as India is expected to add 20,000 megawatts of new power capacity over its installed capacity of approximately 75,000 by the year 2000.
• The Asian Development Bank predicts that the remaining natural forests in Asia will be eliminated within 40 years, with Indonesia, Malaysia, Burma, and the Philippines contributing the biggest amounts of carbon emissions from land use changes as of 1991.

Inadequate water quality and quantity affect health and economic well-being in all ANE countries.

• The poor are most disadvantaged, often lacking ready access and having to pay more. Conflicts over water among urban, industrial, agricultural, and wildlife (including fisheries) uses are mounting, both within and among countries.
• The Middle East and Asia have the lowest average per capita water resources of all regions of the world.
• In addition, Asia's rivers already average 20 times more lead than the rivers in OECD countries (a major threat to children's mental development), and 50 times more fecal coliform bacteria than WHO guidelines allow. It has been estimated that 500,000 Asians per year die from contaminated water and poor sanitation.
• Use by the agricultural sector accounts for the bulk of available water in ANE countries (e.g., Bangladesh 96 percent, India 93 percent, Nepal 95 percent).
• Too little attention is paid in all water subsectors (agriculture, industry, drinking water, sewage conveyance and treatment) to cost recovery for operation and maintenance or to development of alternative and more efficient infrastructure systems.

The ANE region includes the countries with the greatest biodiversity in the world (at 6 each). The ANE region also has among the highest rates of natural habitat loss, both terrestrial and aquatic, due to deforestation, agricultural expansion, and urban and industrial development.

• Habitat loss is considered the biggest current threat to biodiversity in the ANE region. Bangladesh has lost more than 90 percent of its original forest area and similar trends appear in other ANE countries.
• Indonesia has been classified by Conservation International as the most important megadiversity country on earth. Yet it has one of the world's highest deforestation rates and the world's longest list of species threatened with extinction.
• Some observers predict that Cambodia's forests will be completely liquidated in as little as 10 years. This can be expected to cause major disruptions to hydrological regimes and food security in an already unstable country.
• None of the ANE countries are protecting a substantial proportion of their national land areas. For example, less than 2 percent of the Philippines and less than 1 percent of Bangladesh is protected land. The situation is even worse for the Near East region, where only 1 percent or less of the land is protected.
• The economic value of these biological resources is apparent as tourist attractions, but less appreciated is their role in providing genetic resources for crop improvement, protection from pests, production of vital medicines, and ecosystem services such as watershed protection. Each wild plant that provides the chemical basis for developing a new drug generates an average of $290 million per year.
• Even less obvious is the importance of these natural habitats to rural and indigenous communities for their daily subsistence -- food, medicines, fuel -- and cultural traditions. In India today, 54 million tribal people largely live in forest areas, and an additional 250-300 million rural people have significant biomass dependencies on forest resources.

III. Approaches

As one of its overarching goals, USAID supports the achievement of broadly-based, sustainable economic growth. USAID's environmental Strategic Objectives for the ANE region provide the substantive focus for environmental investments in the region, and most involve considerable synergy with Economic Growth, Health and Population, and/or Democratic Growth objectives. While specific tactics vary by country, the general strategies behind these programs are fairly uniform, focusing on:

• policy reform (e.g., cost recovery and correcting incentives)
• building national and local capacity
• increasing public involvement in governance and decision making
• encouraging private sector participation
• technology development, demonstration, and replication

IV. Results

Given the different levels of maturity of ANE's environmental programs, progress at the national level is easier to measure in activities such as water and wastewater management, where USAID has over a decade of investment experience and adequate data. In areas which are newer or for which reporting data is scarce, national-scale biophysical improvements are unlikely to be apparent for another five to ten years. We can, however, begin to see annual qualitative results at the program level that give us the confidence that we are on the right track. Highlights of results reported in 1997 include:

Global Climate Change

• In India, USAID has been instrumental in restructuring the power industry to allow expansion of more efficient, private sector production of energy, yielding 330 MW of new, efficient, independent power online, with over 10,000 MW under construction and efficiency gains worth 1,750 MW.
• USAID has helped Egypt retire less efficient power plants and make better use of new, combined-cycle thermal power plants.
• In Nepal, USAID's efforts led to the ratification of a major treaty to share hydropower with India, and the investment of several hundred million dollars in the sector, which will help mitigate the pressure for increasing thermal power generation.

Urban Infrastructure

• Due to USAID assistance, Indonesia increased access to piped water for 3.3 million people in 1996, the Asian Development Bank committed $200M to support further USAID-designed water supply system improvements, and the government of Indonesia is issuing its first municipal bond for urban infrastructure. Furthermore, recent studies indicate that women in urban areas have benefited significantly from piped water distribution as well as other improvements in environmental infrastructure.
• In Jordan, USAID completed the $10 million refurbishment of the Greater Amman sewage treatment facility (serving 1 million people) ahead of schedule, greatly improving the quality of wastewater so that it can be reused for irrigation, thereby improving water conservation and economic efficiency.
• Privatization of water and sewerage by USAID in Tirrupur, India introduced the concept of municipal bonds to India, leading to a $1.2B World Bank infrastructure program.

Natural Resources: Biodiversity, Forests, Coastal Resources, and Water

• In Cambodia, USAID rapidly became a catalytic force amongst the donor community in strengthening the new Ministry of Environment, protecting national parks from illegal logging, increasing pesticide awareness, and instituting water quality monitoring before the coup in July 1997 halted our operations. We are continuing to work on developing a small activity to address the topic of transboundary water conflict resolution in the Mekong River Basin.
• In Egypt, USAID's new sustainable tourism program in the Red Sea has taken off, reducing solid waste and damage to coral reefs from tourism operations, and improving monitoring of the reefs' state of health.
• In Morocco, 6 million cubic meters of water were conserved through USAID's work in the irrigation sector.

Industrial Pollution

• In Morocco, USAID has reduced highly toxic chromium pollution from leather tanneries by 10 percent in just one year.
• In Egypt, spectacular progress is being made in reducing lead emissions (a major human health concern), due to the rapid phaseout of leaded gasoline and efforts to quickly modernize lead smelters.
• The US-Asia Environmental Partnership helped APEC develop its newly approved "Cleaner Production Strategy," modeled on USAEP's own strategy to promote a "Clean Industrial Revolution" in Asia.

V. Innovative Partnerships

Implementation of the ANE environment program requires USAID to be a lead organization in marshalling and coordinating technical and programmatic expertise both within and outside of government. This demands effective collaboration with other Federal agencies, including the Department of State, Environmental Protection Agency, U.S. Department of the Interior, and the U.S. Department of Agriculture, in implementing environmental programs abroad. In addition, USAID is pioneering new and innovative partnerships with the private sector through programs such as USAEP. Given shrinking resources, USAID continues to seek out opportunities to leverage or cost-share activities with these other agencies and organizations.

VI. Conclusions

Sustained economic growth and public health in Asia and the Middle East are fundamentally dependent upon proper management of ANE's environment and natural resources by the people who depend on them. In FY 98, USAID plans on providing approximately $50 million in DA resources and $280 million in ESF Resources to support the overall ANE environmental portfolio. The Bureau is seeking to increase support to the region in the area of natural resource management, and increase synergy with our economic growth, health/population, and democracy programs.

USAID will continue to work with other US agencies (e.g., State, EPA, Commerce, USDA, and NOAA) as well as other international organizations to develop and support environmental programs in the ANE region. The ultimate goal is to sustain economic progress and improve the quality of human life while preserving environmental resources and options for future generations.