The Great Business Opportunity in Asia Nobody is Talking About
Asia is marching forward as the torchbearer for developing economies. China and India are leading up from the front and countries like Indonesia, the Philippines, and Thailand are fast catching up, attracting FDIs and witnessing higher GDP growth rates than the global average. The development which, at a macro level, is indicated by rapid urbanization, increased consumption, growing population is also posing new challenges to the Asian countries to manage and tackle the gargantuan scale of managing the wastes generated by its cities.
Asia, home to five of the 10 fastest growing economies in the world, is also now a home to eight out of 10 rivers, including Indus, Yellow, Brahmaputra, Ganges, Pearl, Amur and Mekong, which cause 90 per cent of oceanic plastic pollution.
Asia is predictably the biggest waste generator. As per the World Bank Report in 2018, South Asia and Asia Pacific together generate a staggering 802 million tons of waste annually. This is 37 per cent of the total global waste generation of 2.01 billion tons. If we include Central Asia and Middle East, the figure rises to 50 per cent of the total waste generation, making Asia the world’s biggest waste generating continent. By 2050, South Asia, Asia pacific countries together will generate 1.5 billion tons of waste.
The big challenge that lies ahead both for the world and Asia is the staggering volume of plastic waste being generated by the Asian countries.
The Challenge Ahead
China, the Philippines, Indonesia, Thailand, Vietnam contribute to half of the world’s total mismanaged plastic wastes. China, the biggest producer of plastic waste, is taking major efforts to curb it. The recent ban of plastic waste imports to China took the world by shock; it is not so easy to impose ban and put an end to the plastic recycling industry worth US$ 3.7 billion but the Chinese government described it as “symbolic measure for the creation of an ecological civilization in China”.
On the other side, India is on its path to become one of world’s largest plastic waste generator. India, which currently generates 9.25 million tons of plastic waste, is expected to generate 31.2 million tons by 2031, an alarming 5x increase fuelled by growing consumerism and penetration of FMCG, ecommerce companies into Tier II, Tier III cities. Although India’s plastic consumption per capita is lower than the global average, it shows the tremendous scope of improvement and higher levels of plastic waste generation in the near future.
Lack of Importance to Waste Management Practices
Last year, we have witnessed beaches like Boracay (the Philippines) and Maya Bay (Thailand) shutting on account of pollution caused by millions of sprawling tourists, wastes discharged by the beachfront hotels. These two tourist spots generate more than US$1 billion in annual revenue for the respective governments and provide employment to 36,000 people. While these shutdowns will be first of many to follow, imagine the economic impact it will cause if more governments follow these inevitable measures to protect environment. Clean up activities offer only a short-term solution and pose major cost challenges to the governments, especially in middle income countries like Indonesia, Philippines, Malaysia and Thailand.
Instead government and policymakers should think of long-term measures like waste management that incentivizes or enforces the waste generators to manage their wastes more responsibly.
Lack of Incentivization
Successful waste management practices across the globe are built around incentivization’s. Malang, a city in Indonesia, generates 55,000 tons of wastes every day and recycles them to finance the health insurance for its residents. This is indeed a win-win situation for the people, government, recyclers. In India, it is common for people, businesses to trade the wastes for cash or physical products but to make things happen on a bigger scale, government has to draft innovative policies that reward citizens for responsibly disposing off their wastes.
Lack of Financial Resources
Waste management is an expensive service. It requires building appropriate infrastructure and scalable operations for effective implementation. Waste management is often administered by local authorities with limited resources both human capital and finances. This keeps the operational constraint for managing waste collection at scale. This is typically a problem in Asian countries where the cities are densely populated.
Lack of Actionable Data
Data is critical for policymaking and planning. Government bodies and municipalities need to know how much waste is generated, types of waste generated, volumes generated, and the location of generation. For example, geospatial data with respect to waste management can be used to design systems, plan fleet, operations, setting collection targets, measuring diversion rates and ultimately track progress of the overall waste management process. With actionable and accurate data, governments can adopt a more pragmatic approach in allocating budgets, opting right technologies, and involving strategic partners, be it from government, private, nonprofit organizations, to create maximum impact in the process.
The Future of Waste Management
As an industry that lacks formal ecosystem, waste management is a space that is awaiting innovations. There is an imminent need for VC money, private investments to flow in and encourage innovative ideas to establish integrated waste management system. Accenture estimates there will be a US$ 4.5 trillion global opportunity by 2030 in waste management space waiting for disruptive technologies and innovative solutions to grab a pie of it.
The primary agenda is to bridge the information gap between the waste generators, waste pickers, waste processors and tackle the demand and supply mismatch. Secondly, digital solutions that bring in transparency, traceability, and accountability to all the stakeholders are the need of the hour. These solutions not only streamline the operations but also provide valuable insights of waste generation and the effect to which it is managed efficiently, thus bringing in data-centric approach and measurability to the industry.