Water Pricing in Mongolia

Growing Blue

The Wealthy Propelled Forward while the Poor Fall Behind

In the mountainous, landlocked Asian nation of Mongolia, ineffective regulations have led to an inequitable water pricing scheme in which those with the lowest income often pay the most for water, and where the wealthy (who often consume more) often pay less.

Officially, the Mongolian government gives priority to the interests and water needs of the poor. But its weak regulations and decentralized water tariffs have allowed the current water pricing system to benefit businesses and wealthy consumers.

As of 2004, 40 percent of Mongolia’s 2.7 million citizens lacked access to safe water resources, and only 25 percent had adequate access to sanitation facilities. These statistics are likely linked to prevailing poverty and a water pricing structure that makes it difficult for members of the population to afford water. In many rural communities, for example, individual consumers pay as much as 84 times more than what local mining companies would pay for the same amount of water.

In Mongolia, the government’s struggle to effectively manage its water resources – and its inability to institute a more equitable water pricing structure – has resulted in uneven economic growth for the few at the expense of the poor. Instead of reducing the gap and ensuring water for everyone, the country’s pricing scheme has had the opposite result: low income populations are not given the opportunity to access a major driver for growth: water.

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