Global Issues Seminar Series
January 25, 2006
The Global Water Challenge:
Poverty, Growth &
International Relations
David Grey, Sr. Water Advisor
Claudia Sadoff, Lead Economist
The World Bank
A blue planet: ….but
Oceans
97.5%
Glaciers,
Ground
Snow &
water
permafrost 0.075%
1.725%
Lakes,
swamps &
rivers
0.025%
The world’s water
resources
3

3 Messages: Global Water & the Future
1. The world’s water resources are
under rapidly growing pressure
2. Without major water investments,
many poor economies cannot grow
3. Without ‘riparian’ cooperation, water
will increasingly breed conflict
4

Growing water scarcity(1995-2075)
SEI - Criticality index (Source: WaterGAP)
5

Per capita water availability
16
Africa
14
12
10
World
8
Asia
6
4
2
MEast & NAfrica
0
1960
1990
2025
6

Water Resources – Many Uses, Many Users
…
Water Resources Management
Infrastructure for
management of floods
and droughts,
multipurpose storage,
water quality and
source protection
Institutional
framework
Management
instruments
Water
supply &
sanitation
Irrigation
& drainage
Energy
Environmental
services
Other uses
including
industry and
navigation
Political economy of
water management
7

Physical, economic
water scarcity..&
freedom
8

3 Messages: Global Water & the Future
1. The world’s water resources are
under rapidly growing pressure
2. Without major water investments,
many poor economies cannot grow
3. Without ‘riparian’ cooperation, water
will increasingly breed conflict
9

Climate Variability & Growth
Risk of
recurrent
drought
Kenya: variability & shock
10/97 – 2/98 Flood
10/98 –5/00 Drought
10/97 – 05/00
Natural legacy:
extreme climate variability
Infrastructure Damage
Crop loss
Livestock loss
Reduction in hydropower
$2.39 b
$0.24 b
$0.14 b
$0.64 b
Reduced industrial prod.
TOTAL
Cost of Climate Variability
$1.39 b
$2.41 b
Approx (annual) GDP
Impact as % GDP/annum
($9 b/yr)
$2.39 b
$4.8 b
$22 b
22%
10

Economy-wide impacts
3.0
1.0
5.0
0.0
-1.0
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0.0
1979
Real GDP growth (%)
2.0
10.0
-2.0
-5.0
-3.0
Real GDP grow th (%)
Variability in Rainfall (Meter)
15.0
Variability in Rainfall (Meter)
-10.0
-4.0
Rainfall & GDP growth: Zimbabwe 1978-1993
Years
80
25
20
60
10
20
5
0
2000
-5
-10
-15
-40
rainfall variation around the mean
-60
1999
1997
1998
1996
1995
1993
1994
1992
1991
1990
1989
1988
1987
1986
1985
1984
-20
1983
0
1982
percentage
15
40
GDP growth
-80
-20
-25
-30
year
Rainfall & GDP growth: Ethiopia 1982-2000
11

Ethiopia – Impacts of historical levels of variability on
projected GDP growth/economic performance
 Hydrological variability slows growth rates 38%
3.50
40% decline
in Ag GDP
34% decline in
non-Ag GDP
2.50
Baseline
Scenario
2.00
Smoothed
38%
decline in avg.
projected GDP
growth rate when
historical levels of
variability are
assumed
Annual Rates
3.00
Drought
1.50
Variability
1.00
0.50
0.00
GDP Grow th rate
Ag GDP
Non-Ag GDP
12

Water storage in m3/cap
7,000
6,000
4,729
5,000
4,000
3,255
2,486
3,000
2,000
North
America
Australia
Brazil
China
Laos
Thailand
0
1,406
43
South
Africa
1,000
1,287
746
Ethiopia
Water storage
and the
poverty trap
6,150
Water availability versus storage
• Stable pop. & GDP, raising
withdrawal/ capita (m3)
1000
Spain
Ethiopia’s storage to South
Africa (12% of USA) ~ 6 X
GDP
Australia
800
600
400
S. Africa
• Or 5% of GDP for over 100
yrs
200
Ethiopia
0
0
1,000
2,000
3,000
storage/ capita (m3)
4,000
5,000
13

1,800
2108
(United States consumption - 11994 kWh/yr/capita)
1,600
1,400
430
World Average
Morocco
114
Senegal
29
Burkina Faso
204
38
Uganda
Ghana
55
Kenya
Ethiopia
Nigeria
Cameroon
0
Tanzania
126
21
200
85
600
400
900
581
800
Egypt
1,000
500 kWh/capita-year minimum consumption
for reasonable quality of life
Algeria
1,200
184
Elec consumption (kWh/yr)/Capita
The electricity
gap
2,000
100%
80%
Europe
N America
60%
40%
S America
Asia (incl.
China)
20%
Africa
0%
Hydropower
potential tapped
14

The Water
Supply &
Sanitation
Gap
Population (million)
Water Supply
Coverage
in Africa
Africa’s
MDG
Challenge
1000
900
800
700
600
500
400
300
200
100
0
188
368
275
152
36
235
190
40
175
Rural
2000
350
175
Urban
2000
Served 2000
178
350
175
Total
2000
Rural
2015
Added 2000-2015
175
Urban
2015
Not Served
Total
2015
15

Income per capita
Irrigation can lift rural poor out of poverty
Average income levels & irrigation
intensity in India
16

FT, June 18, 2001:
Rain in India…
"Every one of my budgets was
largely a gamble on rain.“
Finance Minister of
Government of India
17

World Bank Water Sector Strategy &
Infrastructure Action Plan: scaling up
World Bank Lending for Water over Past Three Years
% of all Bank lending
10%
8%
6%
4%
2%
0%
18

FY02
Irrigation Serv
Urban WSS WR
Hydropow er Serv
FY03
Irrigation WR
Rural WSS Serv
Hydropow er WR
FY04
Urban WSS Serv
Rural WSS WR
WR St/Alone Components
Discussion
19

3 Messages: Global Water & the Future
1. The world’s water resources are
under rapidly growing pressure
2. Without major water investments,
many poor economies cannot grow
3. Without ‘riparian’ cooperation, water
will increasingly breed conflict
20

“Fierce
competition for
fresh water
may well
260 international
basins:
+/- tensions:
become
a source of
conflictgrowing
& wars with
in thedemand
future.”
longstanding,
always,
Kofi Annan, March 2001
21

Africa’s historical
legacy: numerous
international rivers
• 60+ international
rivers
• many countries per
basin
• many basins per
country
• weak capacity
22

Why would riparian states cooperate?
- converging national agendas
3
3
1
2
1
Case 1
Country 1’s preferred agenda
Country 2’s preferred agenda
Cooperative agenda 3
1
2
Case 2
2
Case 3
...all cases can be rational. The
choice among them will depend
upon perceptions of their relative
benefits.
23

A Cooperation Continuum
•Communication
and notification
•Identify, negotiate &
implement sets of
national investments that
capture cooperative
gains
•Information
sharing
•Adapt national plans to
mitigate regional costs
•Regional
assessments
Dispute
•Joint project
assessment and
design
•Joint ownership
•Joint institutions
•Adapt national plans to
capture regional gains
•Joint investment
Cooperation Continuum
Unilateral
Action
Coordination
Collaboration
Integration
Joint
Action
24

Benefits of Cooperation: changing perceptions
The Challenges
Type 1:
Increasing Benefits
To the river
Type 2:
Increasing Benefits
Limited water resour. Improved water quality,
management:
riverflow characteristics, soil
degraded watersheds, conservation, biodiversity
wetlands, biodiversity,
& water quality.
Sub-optimal water
resources
development
Improved hydropower &
agricultural production, flooddrought management,
environmental conservation &
water quality
Tense (+/-) regional
relations & political
economy impacts
Policy shift to cooperation &
development, from dispute; from
food & energy self-sufficiency to
security; reduced conflict risk &
military expenditure (+/-)
From the river
Type 3:
Reducing Costs
Because of the river
Type 4:
Increasing Benefits
Beyond the the river
The Opportunities
Regional
fragmentation
Integration of regional
infrastructure, markets &
trade
25
Development Diplomacy & the World Bank
The Aswan High Dam
“Those were the two most important
things … when I was at the Bank”
Eugene Black
President of the World Bank (1942-62)
Eugene Black was asked about the most
significant events during his presidency.
He talked about his involvement in the
Middle East, in connection with the
Aswan Dam and the Suez Canal. " and I
was also very much involved in India
and Pakistan, the Indus River dispute. I
was trying to get the Indian government
and the Pakistani government together
…. That took a very long time [1952 to
1960].”
The Indus
Pakistan
India
The Bank’s World, May 1988
26

Nile Basin Initiative
10 countries: Burundi, D.R. Congo,
Egypt, (Eritrea), Ethiopia, Kenya,
Rwanda, Sudan, Tanzania, Uganda
300 m people (600m 2025)
Extreme:
poverty: 4 of 10 poorest
climate variability
landscape vulnerability
Very limited infrastructure….
Yet major opportunities:
The Bank
as facilitor: 1997-2003
as partnership coordinator
as investor: 2004 ->
27

Nile:“Cooperation replaces conflict”
28

3 Conclusions: Actions and Consequences
1. The world’s water resources are under rapidly
growing pressure
Solutions can be found – although
costs will be high (‘economic scarcity’)
2. Without major water investments, many poor
economies cannot grow
De-linking rain from the economy is a
condition for growth, poverty eradication
3. Without ‘riparian’ cooperation, water will
increasingly breed conflict
Riparian cooperation can catalyze
growth, economic integration & peace
29

Rivers are political systems….
• Management of rivers is political; management
of international rivers is very political…
• Rivals… dwellers on opposite banks of a river
• The Chinese got it right long ago:
+
river
+
=
dyke
=
Political
order
30
