Water and the economic crisis

The global economic crisis must not overshadow the issue of water.

Water is as vital as air for human activity. Cities or societies that neglect it may disappear. The debates and analyzes on the current economic crisis focus on its causes, on how to stop the downward spiral and on building a better society for tomorrow. But the debates about short-term fiscal stimulus and the advent of green growth economies miss out on one essential thing: water.

Water is life, and it depends on public health, education, economic production, and social activity. But even the ” OECD strategic response to the financial and economic crisis ” fails to mention it. Other studies make the same mistake. Do they underestimate the direct and indirect benefits of water, or simply do not perceive the costs of negligence and inaction?

In fact, there are few, if any, reliable figures on water expenditures, costs, and benefits. Water sector experts have the impression that in the current situation, costs outweigh the perceived benefits. If they say true, the prospect of a sustainable future is moving away. Without solid information, how can experts convince decision-makers of the gravity of the current situation? It’s time to go back to basics.

The economic crisis is an opportunity to raise awareness of the vital role of water. There is an urgent need to make up for lost time and cope with the growing pressures on water resources – due to population growth, lifestyles or climate change – with all the seriousness that the situation demands.

Part of the problem is the lack of interest of many politicians for water. Even before the crisis, the public and private funds needed for the maintenance and extension of water services were inadequate. The perceived risks of investing in water have become increasingly important, leading to lower investment in new works and maintenance. Unrealistic cost recovery approaches have led to unsatisfactory operational performance, reduced coverage, and declining service quality. Individuals and businesses, especially in the least developed countries, do not have sufficient access to safe drinking water, sanitation, and other essential services. The Millennium Development Goals are far from being achieved. According to the UNDP’s 2006 Human Development Report, the annual investments needed to meet the water and sanitation goals are expected to be about 2.7 percent of GDP, or the US $ 7 billion a year. only sub-Saharan Africa. This is much more than the 0.3% of GDP, or $ 800 million, currently spent on the water.

This situation is likely to worsen with the crisis, as the World Bank recently noted that the decline in public investment has particularly affected investment in water infrastructure. Finally, if nothing is done, the costs of neglect and inaction will be catastrophic and will affect all sectors of the economy: shortages will kill jobs in agriculture and industry; individuals and families will feel the effects on their standard of living, and an indispensable resource for life will be threatened.

Agriculture, the largest water user, will be hit hard, with lower yields, resulting in food shortages and rising commodity prices, which could paralyze trade with emerging economies. The energy sector will also be threatened and the development of low-carbon energy will be slowed down. The manufacturing sector will also be threatened by the high cost and scarcity of water and the products that depend on it.

A failure in the treatment of polluted waters and the protection of populations and aquatic ecosystems would increase the costs of diseases and illnesses, with repercussions on education and productivity, not to mention the loss of part of the resources. water and the destruction of certain ecosystems. What will be the cost of these consequences of inaction, and at what cost can they be avoided? No one knows, but we must do everything to avoid this scenario.

This is where governments, businesses and international organizations such as the OECD can intervene. National strategies must ensure the necessary investments in water infrastructure and services. For example, some of the public funds from the fiscal stimulus packages should be earmarked for financing the improvement of water infrastructure. After all, as the WHO and others have found, the cost-benefit ratio of such investments is around 1/8, and can be as high as 1/40 in some cases (see “Global cost-benefit analysis of water supply and sanitation interventions, “Hutton, Haller, and Bartram, WHO Journal of Water and Health, April 5, 2007). Investment in water should, therefore, feature prominently in short-term stimulus packages, but will also need to be sustained thereafter.

Many companies have been striving for years to use water more efficiently, including improving their technologies. However, they should redouble their efforts, working with associations such as the World Business Council for Sustainable Development or the Water Environment Federation, seeking to engage with other actors to find better ways to use and manage the water. They should also continue to encourage policymakers to value and promote water conservation.

The OECD can also contribute by deepening its analysis of the water economy, to assess the current state of investment and to help prepare for the future. According to BIAC, these analyzes should highlight the economic benefits of access to clean water, as well as the cost of inaction. They could also demonstrate the value of new financing strategies for the entire economy. Policymakers need to be well informed in order to mobilize the necessary funding for water infrastructure in the short term and stimulate long-term investments for sustainable development.

Mr. Kenneth Lucianin is a government and community affairs professional with twenty years of diversified experience in community outreach programs, and municipal and state-level legislation. He is a United States Navy veteran stationed at the Pentagon. Preceding his time in the military Lucianin attended Bergen Community College and Rutgers University and pursued a degree in Public Affairs. Mr. Lucianin brings government and infrastructure experience in both the private and public sectors to Matrix.

The global crisis is serious, but the disaster can be avoided. The debate on the adoption of stimulus packages and the development of strong economies offers a unique opportunity to return to fundamentals – but what is more fundamental to life than water?