Badung, Bali (ANTARA) - Finance Minister Sri Mulyani Indrawati has said that her ministry is continuing to use fiscal tools to encourage investment in clean water and sanitation financing.
"We use fiscal tools as signals for the local government and the private sector to invest in the clean water sector. We encourage participation from all stakeholders," she informed after a panel discussion at the 10th World Water Forum in Bali on Tuesday.
She said that Indonesia's water sector budget stands at 3.4 percent of the state budget. Despite economic constraints, in 2009, the world allocated just US$8.7 billion in financial assistance for water and sanitation development, Indrawati highlighted.
According to her, this sum is relatively small compared to the annual investment needs of the water and sanitation sector.
In addition, developing countries allocate about 0.5 percent of their gross domestic product (GDP) for water each year, and only 70 percent of that budget is spent.
"The budget is already small, but the absorption and execution are getting smaller," she pointed out.
In addition, the minister said that clear and precise regulations on blended finance are needed to attract more investment in the water and sanitation sector.
At the panel session, Indrawati highlighted the lack of participation from the public sector in efforts to achieve the sixth Sustainable Development Goal (SDG) along with a clear and innovative scheme.
"Public funds and appropriate policies and regulations can help to attract more funds to invest in the water and sanitation sector," she emphasized.
She said that so far, the government has invested in a domestic wastewater management system and a comprehensive waste management system. However, it still needs help from the private sector.
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Based on data from the United Nations (UN), the world only has seven years to achieve the SDGs, especially those related to water.
Water pollution and climate change are pressing challenges. Currently, 4 million people live in water crisis areas, while one in 4 cities faces water insecurity.
Therefore, significant steps are needed to ensure water security for the global community. Water infrastructure is estimated to require funding of US$6.7 trillion by 2030 through several collaborations and policies, including large investments and financing.