Concept of water resources investment is coming widespread and useful globally in economic schemes of water management planning.
Making water as part of economic development
Investing in water involves higher costs but brings higher gains. Stockholm International Water Institute (SIWI) produced report in which a review of the economic benefits of improved water management and services is produced. The report was commissioned by the Governments of Norway and Sweden as input to the Commission on Sustainable Development (CSD) and its 2004-2005 focus on water, sanitation and related issues.
The following is an abstract from report giving basic understanding of potential Economic Benefits generated from Improved Water Resources Management and Services.
This report focuses on the economic benefits of action that address both the access to water and sanitation services and inadequate water management, including infrastructure.
Improved water management contributes greatly to poverty eradication. The required financing for improved water supply and sanitation and water resources management is a sound public and private investment strategy that boosts economies and that allows individuals and households to explore new livelihood opportunities as well as businesses to increase productivity and production and venture into new markets.
The productivity and production capacity of people and economic sectors, such as agriculture and industry, depend on people’s health and secure water availability. Investing in the health of people, ecosystems and more efficient water use are investments that not only provide immediate economic benefits but also safeguards future economic gains.
|Drinking water infrastructure in Priaralýe|
Improved access to water services and basic sanitation for economic development:
Immediate benefits include averted health-related costs, and time saving associated with having water and sanitation facilities closer to home.
Increased productivity and production accrued at the individual/household level are augmented by long-term economic, health and education gains.
It is doable.
Estimate: Investment for improved water supply and sanitation to meet MDG annually is 11.3 billion USD, the total accrued economic benefits of reaching the MDG is 84 billion USD – a seven-fold return.
Estimate: A 0.3% increase in investment in household access to safe water is associated with a 1% increase in GDP.
Estimate: The achievement of the MDG on water supply and sanitation will contribute 322 mln working days globally, and the annual global value of adult working days gained as a result of less illness would be almost 750 mln USD. The biggest potential gain for increased productivity and production within both households and economic sectors is found in terms of the total time saving: water collection and sanitation convenience amounts to 64 bln USD.
Providing reliable and sufficient water supplies is critical for business development and reduces investment risk. Water and related services must be a part of the economic development business:
It boosts productivity and safeguards future profits of the agriculture and food sector (crop, fishery and livestock).
Industrial development – Industrial areas that use water unsustainably are likely to direct more resources to ensure adequate access to water or are likely to suffer from intermittent water supply/or poor water quality.
Well planned and efficiently managed water storage (hydropower) infrastructure is important for the provision of safe and secure water supply to households, agriculture and food production and for industry. Multipurpose dams can generate indirect economic benefits nearly as much as the direct economic benefits generated.
The investment in water storage capacity, both large and small-scale, and water resources management enhances resilience to better cope with erratic rainfalls.
|Irrigation of rice fields in Syrdarýa area, Kazakhstan|
Estimate: Actions to improve water resources management bring considerable economic gains – a 15-30 bln USD investment in improved water management in developing countries can have direct annual income returns in the range of 60 bln USD.
Estimate: Every 1 USD invested in watershed protection can save anywhere from 7.5 USD to nearly 200 USD in costs for new water treatment and filtration facilities.
The public and private investments needed to improve water resources management make country economies more resilient to rainfall variability and maintain eco-system services.
Immediate and future profits depend on public and private investment in improved water resources management to maintain ecosystem goods and services. The economic costs of environmental degradation have been estimated at 4% to 8% of GDP in many developing countries.
Water and how it is managed contributes to the production of ecosystem services and goods – for example fish, fuel, timber, food crops, medicine and pasture.
Well-managed ecosystems provide “ecosystem goods” and “services” – such as flood control and water purification.
The public and private investments needed to improve water management also mitigate damage from natural disasters.
Currently the preparatory work for the second phase of the Northern Aral Sea and Syrdarya Control project supported by the Government of Kazakhstan and the World Bank is underway. On the 16th of June 2010 the working panel of experts in the field of hydro unit construction, representatives of the oblast (country regional) administrative bodies and IFAS specialists took place in Kyzylorda.
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