Show Hide image

The future of river basins is critical for global economic growth

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

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.

Photo: Getty Images
Show Hide image

How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.