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

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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit