World Bank warns area covering two-thirds of world population at risk of growth slowdown
Water shortages could knock as much as six per cent off the size of the world’s largest economies over the next three decades, the World Bank has said in a new report published today.
An area that includes more than four billion people, covering China, India, the middle east and sub-Saharan Africa, will suffer shrinking economic growth due to water scarcity caused by climate change, if countries do not change their policies, the organisation warned.
As “water supply becomes more erratic and uncertain” at the same time as populations grow and middle classes swell, putting pressure on demand, the problems could even spur mass migration and “spark conflict” across some of the most fragile regions on the planet.
“Water scarcity is a major threat to economic growth and stability around the world, and climate change is making the problem worse,” said Jim Yong Kim, president of the World Bank.
“Economic growth is a surprisingly thirsty business,” the report found.
“Water is a vital factor of production, so diminishing water supplies can translate into slower growth that cloud economic prospects.
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“Some regions could see their growth rates decline by as much as six per cent of GDP by 2050 as a result of water-related losses in agriculture, health, income, and property — sending them into sustained and negative growth.”
China and India can both escape that fate – and even boost growth – if they expand supply and allocate water to “high-value uses”, the World Bank said.
For the middle east – including Saudi Arabia, Iran, Iraq and the gulf nations – along with the northern strip of Africa covering Egypt, Libya and Algeria, however, even targeted policies will not be enough to offset the economic damage scarcity of supply will inflict over the next three decades, the World Bank predicted.