Water and Economic Growth

Economic growth in developing countries relies on their investments in water systems. The third United Nations World Water Development Report details the direct economic benefits of that investment.

“In the 335 counties in China with primary electrification from hydropower, annual average income per farmer rose 8.1% a year, nearly 3 percentage points more than the national average,” the report says. “In those communities 30 million people upgraded their livelihoods from marginalized farming to off-farm laborers in the industrial and services sector without any negative impact on agricultural production.”

The reverse is also true: water shortages impede economic growth. Citing findings of the Pacific Institute, the report notes that the scarcity of freshwater is “already an economic constraint in major growth markets such as China, India, and Indonesia, as well as commercial centers in Australia and the western United States.”

The PRC and developed economies in Asia need an estimated $38.2 billion to $51.4 billion a year for water supply and wastewater treatment, the report estimates. The third edition of the World Water Development Report, Water in a Changing World, was launched at the Fifth World Water Forum in Istanbul in March. •