Ulaanbaatar, December 17, 2025 /MONTSAME/. More than 60 percent of Asia and the Pacific’s population, about 2.7 billion people, has been lifted from extreme water insecurity over the past 12 years. But ecosystem decline, climate risks, and funding shortfalls for water investments threaten to plunge billions back into water insecurity, according to a new Asian Development Bank (ADB) report.

The Asian Water Development Outlook 2025, published on December 8, 2025, assesses water security in Asia and the Pacific, evaluating 50 economies through five dimensions: access to clean water and sanitation for people living in villages and cities; the availability of water for key economic sectors such as agriculture; the state of rivers and other natural ecosystems; and protection measures against droughts, floods, and other water-related disasters.

East Asia, which includes two countries, the People’s Republic of China and Mongolia, has demonstrated strong overall progress in water security, recording some of the highest advancements across Asia and the Pacific region between 2013 and 2025. East Asia also currently holds the highest scores in Urban Water Security.

Despite these substantial gains, particularly in governance and infrastructure, the region faces challenges, notably in maintaining environmental health. For Environmental Water Security, the countries in East Asia showed declining Catchment and Aquatic System Condition Index (CASCI) scores (ecological conditions). This decline is linked to ongoing pressures from rapid development, intensive land use, and high population density. However, this ecological decline was offset by stability or improvement in the Environmental Governance Index (EGI) scores.

Mongolia expanded its terrestrial protected areas, helping to stabilize overall Environmental Water Security scores. Moreover, the country’s Water, Sanitation, and Hygiene (WASH) infrastructure score doubled from 2.0 in 2013 to 4.0 in 2025. It means Mongolia moved from a situation where large parts of the rural population lacked even basic services to one where most households now have basic access to water, sanitation, and hygiene. However, higher service levels and quality remain limited. Only 16 percent of rural residents have safely managed drinking water, less than 9 percent have piped supply, and 15 percent still practice open defecation.

Despite these gaps, Mongolia’s health score reached 7.7, suggesting that targeted interventions such as rural health outreach and hygiene education may be helping to reduce disease burden. Geographic and climate conditions are key constraints. Harsh winters and limited heating, especially in Mongolia, make it difficult to deliver conventional WASH services, especially in rural and nomadic areas, the report underscores.

“Asia’s water story is a tale of two realities, with monumental achievements on water security coupled with rising risks that could undermine this progress,” said ADB Senior Director for Water and Urban Development Norio Saito. “Without water security, there is no development. This report shows we need to act urgently to restore ecosystem health, strengthen resilience, improve water governance, and deploy innovative finance to deliver long-term water security – especially for the neediest communities.”

Wetlands, rivers, aquifers, and forests that sustain long-term water security are deteriorating fast. Extreme weather events such as storm surges, rising sea levels, and saltwater intrusion threaten a region, which already accounts for 41 percent of the world’s floods.

The AWDO estimates that USD 4 trillion through 2040, or USD 250 billion a year, is needed to meet the region’s water, sanitation, and hygiene (WASH) needs alone. The report notes that progress can be sustained if nature is protected and integrated into water systems through national river health monitoring, stronger pollution controls, and better watershed protection. Stronger governance systems that prioritize prevention will improve climate resilience, and water systems will be more effective if subnational bodies are given the resources and authority to manage them.

The report finds that current spending on WASH infrastructure covers less than 40 percent of the estimated USD 250 billion needed every year, leaving an annual shortfall of more than USD 150 billion. Closing the gap requires deploying finances in smarter ways, including through blended finance that pools public and private resources to reduce project risk and mobilize private capital. Improving the efficiency and financial sustainability of the water sector can also attract private investment.

ADB produced this year’s AWDO in partnership with the University of Oxford, the International Water Management Institute, the University of Queensland, the International Center for Water Hazards and Risk Management, the Global Water Partnership, the International WaterCentre, Griffith University, and the IHE Delft Institute for Water Education.

ADB has published five editions of the report since 2007.