The future of river basins is critical for global economic growth

HSBC launches a new $100m water programme in partnership with three NGOs.

The Murray-Darling river basin in Australia. Credit: Getty Images

By 2050, the top-ten river basins by population are expected to produce a quarter of the global GDP, according to a new report from Frontier Economics. In response, HSBC Group has launched a five-year $100m water programme in partnership with WWF, WaterAid and Earthwatch.

The aim of the HSBC Water Programme is to 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.

In 2010, the ten most populated river basins in the world were home to more than a quarter of the world population. Nine of these basins are in growing markets; a conservative estimate indicates that in 2010 they generated almost 10 per cent of global GDP.

By 2050, these basins are expected to produce a quarter of global GDP (25 per cent) – a figure greater than the combined future economies of the US, Japan and Germany.

Yet the report also forecasts that by 2050, without any improvement in water resource management, seven of these basins will face unsustainable water consumption, with significant to severe water scarcity. At least 30 per cent of the natural water run-off is being consumed. As a result, the GDP growth expected in the river basins could fail to materialise.

In addition, ecosystems home to a quarter of the global population would see further permanent damage, affecting communities’ and businesses’ ability to thrive.

Douglas Flint, group chairman of HSBC, said:

Today’s findings show that the future of river basins is critical for global economic growth.  Rapid, collaborative action worldwide is needed to improve water resource management in river basins.  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. The HSBC Water Programme will benefit communities in need, and enable economies to prosper.

The report found that 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 that providing universal access to safe water and sanitation would imply a 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.

David Nussbaum, chief executive of WWF, said:

As part of the new HSBC Water Programme we’ll be working with over a thousand businesses and over a hundred thousand fishers and farmers to promote more efficient use of water in their practices, while working with governments across the globe to advise on better river basin management which will help to secure water supplies for the future needs of both the human population and the environment.

Eve Carpenter, COO of Earthwatch, said:

The HSBC Water Programme will enable Earthwatch to set up research projects in over 20 cities worldwide, working with local conservation partners to address urban water management issues.

Barbara Frost, CEO of WaterAid, said:

The HSBC Water Programme will transform lives through its support of WaterAid’s work. This exciting five-year partnership will result in 1.1 million people gaining access to safe water and 1.9 million to improved hygiene and sanitation in Bangladesh, India, Nepal, Pakistan, Nigeria and Ghana.