Water is truly the source of life, and we understand the vital role it plays in cultivation and life itself. Lack of water is a killer – in many regions around the world a drought can literally mean the loss of lives in many communities. However, what does not get enough coverage, yet still adds to the overall impact of the drought, is the economic impact of a drought.
From agricultural losses, to reduced industrial productivity, risk of fires, effect on human health, and a cessation of the production of hydroelectrical power. These are all issues which will wreak long term damage on a country’s economy. Any water appeal is aimed at developing an infrastructure that will help a community seek untapped underground resources to help communities ride through these challenging climatic conditions. Other investments need to be made in creating water defences to protect against rising levels, and better manage any excess water.
Equally, it is not just the lack of water that will have such repercussions. Too much water in the form of flooding has an equally devastating effect on the economy. Currently 33 million people are affected by the destructive floods that are hitting Pakistan. Nearly 1000 people have been killed, with thousands displaced and millions more affected.
Former Russian president, Mikhail Gorbachev, who famously introduced the concepts of Perestroika and Glasnost to the former Soviet Union, famously said: “Water, like religion and ideology, has the power to move millions of people… And all people, everywhere and every day, need it.”
Loss of agricultural production
One of the biggest impacts both in flooding and in droughts, is the loss of agricultural production.
During a drought there is quite simply no water to irrigate the crops. Droughts often occur in countries where whole communities rely on their crops, both to feed their own communities, and to trade in nearby towns. During a drought, the lack of water can literally kill off the only means of survival for these subsistence farmers. And the knock-on effect on the local economy has a ripple effect that can be felt for many years.
During a flood, that crop is destroyed. Even as water levels recede, fields are left waterlogged and crops are ruined, beyond saving.
Loss to the tourism and local trade industry
Whether through flooding or droughts, the loss of any visitor to any area can be devastating to a local economy. And we are not just talking about the international tourist industry (though consider the billions of dollars of lost income to Indonesia, Sri Lanka, India, the Maldives and Thailand after the Indian Ocean Tsunami of 2004). The flow of trade between local towns and communities is, in effect, stopped indefinitely.
Loss of health and life
Any humanitarian disaster will bring both loss of life, and a deterioration in human health due to malnutrition and impending famine, lack of medical supplies, aid and facilities.
Water related disasters are having the biggest impact on the global economy. One report predicts that floods and droughts could collectively cost the global GDP $5.6 trillion between 2022 and 2050 – a massive increase when you consider that between 1970 and 2021 this figure was still a staggering (but less) $3.64 trillion.
In 2021, 223 floods were classified as natural disasters – this is an increase on the average of 163 each year during the first 20 years of the 21st century. Another report stated that the number of droughts had already increased by 29 per cent since the year 2000, affecting not just the African continent, bit India, Australia and the Americas as well.