There’s a magic ingredient that could transform the world’s economic fortunes. And it’s not money or financial investment. It’s simple H2O - water.
Pouring money into improving global water supplies will save lives and boost global growth, a new report says.Research commissioned by HSBC says that poor management of water resources could have a negative impact in some of the world's most rapidly developing economies.
Consultants Frontier Economics identified that by the middle of this century the ten most populated river basins will be responsible for 25 per cent of the planet’s GDP, up from 10 per cent now.
However the consultants warn that this potential change could be set back by problems with gaining access to enough water unless steps are taken now to improve water management. them will be facing water scarcity without significant investment in better water management.
"This could mean the GDP growth expected in the river basins would not materialize - and would therefore mean wider forecasts for emerging markets will not be achieved," the report said.
The key river systems are the Ganges, the Yangtze, the Indus, the Nile, the Huang He (Yellow River), the Huai He, the Niger, the Hai, the Krishna and the Danube.
HSBC published the report on Monday alongside plans to invest $100 million via the WWF, WaterAid and Earthwatch charities to improve access to safe water in these river basins.
The report says that for every $1 US dollar spent on improving access to safe water and sanitation gives an average return of $5 US dollar in terms of economic activity. That could boost global GDP by $220 billion a year, the report said. The gain in Brazil, India, and China alone would be more than $113 billion.
HSBC chairman Douglas Flint said:”The findings show that the future of river basins is critical for global economic growth. Rapid, collaborative action worldwide is needed. The report also highlights the powerful economic rationale for improving access to freshwater and sanitation, at a time when total aid for water access and sanitation has actually declined."
Nick Robins, head of the bank’s Climate Change Centre of Excellence said:”There has been an assumption up to now that water will always be available. People are realising that now is not the case Water assets They are fairly long-lived secure assets, so there is not much risk there. But you do need to give investors reassurance that the assets are “ safe" from government interference.”