Table of Contents

  • Expanding access to clean reliable water sources entails a number of direct and indirect economic benefits. Clean reliable water supplies strengthen human capital by improving both health and economic outcomes, and attracting human migration and commerce. According to the latest edition of the Economic Outlook for Southeast Asia, China and India, demand for clean water supply and infrastructure remains high throughout the region, and has become an even greater concern in times of COVID-19. Difficulty accessing clean, reliable water means that COVID-19 can spread more easily, with potentially deadly consequences.

  • Countries in the Mekong region recorded impressive economic growth in the last decades, mainly due to the economic opportunities provided by the Mekong River, at the same time, they also face multiple challenges. For instance, water infrastructure needs are increasing but private sector participation in water infrastructure remains dismal and options of infrastructure financing are limited. In addition, there remains ample room for improvement of water regulations. Innovative approaches are therefore needed to address these challenges. Innovation for Water Infrastructure Development in the Mekong Region covers five main topics: the socio-economic contributions and environmental challenges of the Mekong River (Chapter 1), the potential of digital infrastructure financing, with a focus on Fintech and blockchain (Chapter 2), the merits of inducing private finance to water supply and inland water transport using spillover tax revenues (Chapter 3), the resilience of water infrastructure to natural disasters and COVID-19 (Chapter 4), and the challenges of water regulation in the Mekong region (Chapter 5).

  • This overview summarises the main points contained in the five chapters of the publication on Innovation for Water Infrastructure Development in the Mekong Region. Chapter 1 provides a snapshot of the key socio-economic and environmental challenges facing the Mekong River and underlines the importance of transboundary initiatives to address these challenges. Chapter 2 explores the benefits of innovative financing models enabled by technologies, such as crowdfunding and tokenisation. Chapter 3 analyses infrastructure investment needs and focuses on spillover tax revenues to boost private sector participation. Chapter 4 presents a variety of initiatives that could enhance the resilience of water infrastructure in the face of natural disasters, putting particular emphasis on community engagement and digital tools. Chapter 5 completes the picture with a discussion about the weaknesses of water and wastewater regulations in the Mekong countries and highlights a few priority areas for reform.

  • This chapter provides an overview of the socio-economic and environmental challenges concerning the Mekong River. It also discusses the initiatives towards further regional co-operation, with a focus on mutual efforts to enhance climate resilience. The chapter also reviews the economic benefits of the Mekong River in terms of agriculture and fisheries, navigation and trade, tourism, hydropower, water supply and sediment extraction. The likely impact of climate change on wetlands, biodiversity and aquaculture is subsequently addressed. The chapter concludes with a discussion about the need to build on transboundary co‑operation efforts to preserve both the economic gains and ecosystem services that benefit millions of people in the Mekong River Basin.

  • The public sector continues to finance the bulk of infrastructure in Asia and the Mekong region, although the private sector is increasingly involved through public-private partnerships (PPPs) and privatisation. This chapter explores alternative finance mechanisms that harness digital technologies (e.g. Fintech) to fund infrastructure, including crowdfunding and tokenisation. It suggests such platforms can help transcend the limits of traditional banks, providing a lower entry cost for retail investors. They can also build community support, sending a reassuring signal to larger institutional investors. The chapter also highlights the use of crowdfunding and blockchain tokens to support a variety of projects, including in real estate, energy, parks, transport and water. Despite these successful case studies, the use of Fintech to finance public infrastructure remains marginal.

  • This chapter assesses the merits of inducing private finance in water supply and inland water transport. It discusses infrastructure investment needs in the region, with particular focus on private participation. It introduces the concept of spillover tax revenues, which are also known as indirect or secondary revenues, or externality effects. The chapter also shows the importance of the spillover effect of water supply and inland water transport on the economy. It then examines financing for water supply through bank loans, insurance funds, pension funds, revenue bonds and equity investment. Finally, it proposes alternatives for financing water supply and inland water transport. This includes returning fractional spillover tax revenues to investors in water projects and offering financing for start-up businesses and small and medium-sized enterprises near the water supply.

  • Countries in the Mekong region are particularly prone to natural disasters such as floods, storms, drought, earthquakes, landslides and epidemics. Climate change, rapid and unplanned urbanisation, as well as environmental degradation, are among factors that increase countries’ vulnerability to natural hazards. Since these external shocks can threaten livelihoods, destroy infrastructure or other physical capital and lead to significant socio‑economic consequences, improving resilience against natural disasters is essential. The COVID-19 pandemic has also demonstrated the need to build resilience against shocks to curb the infection rate and minimise damage. This chapter discusses the role of resilient water infrastructure, community engagement and the use of digital tools in strengthening preparedness against natural disasters. It also addresses water-related challenges and several preparedness and response initiatives during the pandemic.

  • Universal access to drinking safe water, sanitation and hygiene can provide benefits to health, well-being, the economy and the environment. However, the Mekong region faces a number of challenges, including financing the water infrastructure needed to meet the demands of growing economies and populations. This chapter explores the characteristics of good water and wastewater regulations before turning to priorities in Mekong countries: Cambodia, Lao People’s Democratic Republic, Myanmar, Thailand and Viet Nam. This chapter addresses issues such as financial sustainability, quality standards, law enforcement, public service obligations, delivery standards, risk management, incentives for more efficient water use in agriculture, public-private partnerships, water demand management, information gathering, licensing, public participation, dispute resolution and consumer protection.