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September 25, 2020
Business Finance International

World Bank: Water Scarcity Has Major Impacts on Countries’ Economic Growth

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by Kiwiana Ngabung – EMTV Online

This week the World Bank released a report warning that the scarcity of water intensified by climate change will have a negative impact on the GDP of countries.

The report titled High and Dry: Climate Change, Water, and the Economy, states that demand for water will increase exponentially due to the collective effects of growing populations, rising incomes and expanding cities if current weak policies persist.

“Economic modeling described in this report suggests that bad water-management policies can exacerbate the adverse growth impacts of climate change, while good policies can go a long way towards neutralizing them,” the report states.

“Some regions could see their growth rates decline by as much as 6 per cent of GDP by 2050 as a result of water-related losses in agriculture, health, income, and property—sending them into sustained negative growth.”

Already, over 4 billion people around the world experience water scarcity at least one month out of each year. But unless stronger policies and investments are made on improving and dealing with climate stresses, there will be greater negative impacts.

“The impacts of water mismanagement are felt disproportionately by the poor, who are more likely to rely on rain-fed agriculture to feed their families, live on the most marginal lands which are more prone to floods, and are most at risk from contaminated water and inadequate sanitation,” the report says.

The report suggests three overall policy priorities that can help countries have a water secure and climate resilient economy.

1. Optimising the use of water through better planning and incentives

2. Where appropriate, expand water supply and availability

3. Reduce the impact of extremes, variability, and uncertainty

There are existing challenges yet to overcome but further action should not all be too costly. The right policies and good investments can affect the economic growth and wellbeing of societies in a positive way.

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