Invest $1 in tackling water shortage, get $5 return

10 most populous river basins will contribute 25 per cent of world GDP by 2050

Few resources are more fundamental to health and development than water. Agriculture, energy and industry rely on it, and access to safe, clean water can have an instant and dramatic impact on individuals and communities, helping them to move out of poverty and secure their livelihoods.

Yet, nearly 800 million people are without access to safe water, 2.5 billion people are living without access to basic sanitation and a quarter of the world’s population live in ecosystems that are under threat from water scarcity.

Change requires rapid, collaborative action worldwide and a significant investment – both public and private – but making the case for such investment is a complex matter. Addressing these issues has clear humanitarian and development benefits, and a new report from Frontier Economics, commissioned by HSBC, presents clear evidence and strong rationale of the significant potential of water to help economies grow at a local and global level.

According to new findings from the report, Exploring the links between water and economic growth, securing universal access to clean, safe water and sanitation would call for significant investment, whether from governments or businesses, of some US$725bn – but these investments would yield real returns.

Achieving the Millennium Development Goals (MDG) on water supply and sanitation worldwide would amount to an equivalent of more than $56bn per annum in potential economic gains between now and 2015; and providing universal access to safe water and sanitation would imply potential economic gain of $220bn per annum. Providing universal access in Brazil, India, and China alone would amount to an equivalent of more than $113bn.

Frontier Economics also found that globally the average return on each dollar invested in universal access was just under $5, even after taking maintenance costs into account. In Latin America the figure is $16 while in some African countries, the capital investment would be paid back in only three years. Several countries in Africa and Latin America would stand to gain an average of more than 15 per cent of their annual GDP from achieving universal access.

Alongside water and sanitation, there is also a strong economic argument for an investment in water resource management which includes; efficiently sharing or allocating the available water supply; ensuring water consuming industries are using it as efficiently as possible; protecting water quality and sustaining eco-systems and; managing water infrastructure.

The report reveals the world’s 10 most populous river basins are forecast to contribute 25 per cent of global GDP by 2050 – a sharp rise from a current 10 per cent and a figure greater than the combined future economies of US, Germany and Japan. However, as they stand, seven in 10 of those river basins face significant or severe water scarcity by 2050, meaning the forecasted economic growth in these basins may not materialise without investment in sustainable water management.

These findings make it clear that the future of river basins is critical for global economic growth and the economic rationale for improving access to freshwater and sanitation is strong and clear.

The HSBC Water Programme, a new $100m, five-year partnership with WWF, WaterAid and Earthwatch will tackle water risks in river basins; bring safe water and improved sanitation to over a million people; and raise awareness about the global water challenge - taking one step towards achieving change, delivering benefits to communities in need, and enabling economies to prosper.

Over the next five years, we will continue to share the lessons we learn and the data we gather, in order to encourage others to join us in recognising the value of water, benefiting communities today, and unlocking growth for years to come.

Please follow our progress at www.thewaterhub.org where you can also access the full research findings.

Note: The world’s 10 most populous river basins are: Ganges, Yangtze (Chang Jiang), Indus, Nile, Huang He (Yellow river), Huai He, Niger, Hai, Krishna and the Danube.

A bather in the Ganges river. Photograph: Getty Images

Nick Robins is head of HSBC's Climate Change Centre of Excellence

Photo: Getty
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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.