The importance of water supply for economic development

Water is essential not only for direct human consumption but also for the industries and activities that drive economic growth. People rely on water domestically for drinking, washing, and sanitation, but they also depend on it indirectly through its role in energy production, industry, trade, and agriculture.

Energy supply

• Water is heated to generate steam in many types of power station, driving the turbines that produce electricity
• In hydroelectric power plants, water directly drives turbines to generate electricity
• Water is used in newer energy technologies such as hydraulic fracturing (fracking) – a process where water is pumped underground to release natural gas
• Growing biofuel crops requires high levels of water, making water availability critical for the development of biofuels

Industry

• Factories use water in the production of a wide range of goods – for example, paper factories use water to produce wood pulp, which is then processed into sheets of paper
• Water is used to cool machinery, as moving parts can overheat easily, and to clean raw materials before they enter production
• Demand for water from industry is growing rapidly in emerging economies such as China and India, driven by the global shift in manufacturing from developed to newly emerging economies

Trade

Waterways – including large rivers and man-made canals – enable the transport of goods within and between countries, supporting both domestic and international trade networks.

Agriculture

• Agriculture is the largest global user of water, with farms relying on it to irrigate crops and raise livestock
• Irrigation for crops and pastures comes from both surface water and groundwater supplies
• In some developing countries, agriculture can account for over 25% of gross domestic product (GDP), highlighting the economic significance of a reliable water supply

Countries experiencing rapid population growth are often located in areas facing severe water shortages. This combination can hinder economic development and have serious consequences for people's health and quality of life.

The importance of water supply for human wellbeing

Health and wellbeing depend on access to a safe and plentiful water supply. In 2021, over 750 million people worldwide still lacked access to a clean water supply close to their home.

How unsafe water affects health

• Waterborne diseases - Without effective sewage systems, human waste enters watercourses, spreading diseases such as cholera, typhoid, and dysentery. Faecal bacteria in drinking water can sometimes be fatal
• Contamination through soil - In areas without sanitation where open defecation occurs, raw sewage can enter drinking water through contaminated soil, further threatening water security
• Indirect contamination - Exposed sewage attracts flies that may travel from faeces to food, causing illness
• Skin and other infections - Dirty water can cause eye, ear, and skin infections
• Food preparation - A clean water supply is needed to prepare food safely, including washing fruit, vegetables, and kitchen utensils

Economic problems caused by water insecurity

Water insecurity can trap communities and entire countries in cycles of poverty by limiting access to education, employment, and industrial development.

How water insecurity hinders economic growth

• Inability to develop industries - Poor countries in dry areas often cannot afford to import water or build large-scale engineered solutions. This means they struggle to obtain enough water to meet demand, hindering the development of industries or making them less profitable and globally competitive
• Impact on school attendance - High levels of sanitation mean more usable water can be provided to schools, improving attendance – particularly among menstruating girls. Better-educated young people are more able to enter skilled employment, which supports the economic development of a country. In 2021, around 30% of schools globally did not have access to clean water
• Burden of water collection - In developing countries, women and girls are often responsible for the daily collection of water. This limits their ability to attend school on time and gain employment. Providing piped water to homes would allow more girls to focus on their education, increasing their chances of having a career and contributing to economic development

Environmental problems caused by water insecurity

Water insecurity does not only affect people, it also damages ecosystems and natural habitats. Wetland areas are particularly vulnerable, as they combine the needs of terrestrial and aquatic organisms.

Consequences for ecosystems and habitats

• Loss of species and habitats - Water forms many habitats, including ponds, lakes, and wetlands. If water supply is diminished, this can lead to the death and even extinction of some species and the destruction of habitats
  • Wetlands serve as breeding grounds for migratory birds and support large fish stocks
• Disruption of local climate regulation - Ponds and lakes help to regulate local atmospheric moisture levels and temperatures. Their loss can alter microclimates
• Loss of natural water purification - Certain wetland features, such as reedbeds, purify water as it enters surface stores. Reeds remove toxins from the water and also provide nesting materials for birds
• Eutrophication - Fertilisers that run into lakes and reservoirs cause eutrophication – a process where excess nutrients trigger an algal bloom on the water's surface. This deprives animals and plants of oxygen and blocks light at deeper depths

Water conflicts within a country

Water insecurity can generate conflict between different groups of people who share the same water supply. These disputes arise when the balance between supply and demand shifts.

Typical causes of internal water conflicts within a country

1. Water supply decreases - For example, if rainfall in the area has declined
2. Water demand increases - For example, where the population grows or industry expands

Types of internal water disputes

• Between socioeconomic groups - Conflict can arise between those who can afford to pay for an enhanced water supply to their homes and businesses, and those who cannot afford to install infrastructure for a domestic supply
• Between different water uses - Although agriculture commonly uses most of the available water in a local area, it may compete with recreation, manufacturing industries, and domestic users
• Between upstream and downstream regions - Changes upstream in a drainage basin can have major impacts downstream, so upstream areas must manage rivers carefully

How upstream activities affect downstream users

• Over-abstraction - Excessive water extraction upstream causes lower flows downstream
• Pollution - Industrial activity can increase pollution levels in the river
• Soil erosion - Farming can increase soil erosion, raising the concentration of sediment in rivers and reducing water quality

Water conflicts between countries

Water insecurity can also generate disputes at the international level. Many rivers and lakes cross national boundaries, creating complex challenges around the fair distribution and use of shared water resources.

How transboundary water sources cause conflict

• Rivers crossing borders - Upstream countries may divert water away from main channels, reducing the volume that crosses into the downstream country. They may also pollute the water, leading to unsafe water entering the downstream nation
• Shared lakes - Lakes that cross boundaries make it difficult to manage a fair distribution and use of the water between the countries involved

Case study: The River Nile

The River Nile is a key example of how shared water resources can generate international conflict. It flows through eleven countries in north-east Africa, yet historically only two countries have held full rights to its water.

Background to the dispute

• A 1959 agreement gave Egypt and Sudan priority use of the Nile's water and increased each country's share
• Egypt was also granted the power to block developments along the course of the Nile that threatened its water supply
• Upstream countries – including Uganda, Rwanda, Ethiopia, and Tanzania – have long wanted to use more of the Nile's water for their own development

The Grand Ethiopian Renaissance Dam

• Ethiopia began construction of the Grand Ethiopian Renaissance Dam (GERD) in 2011 and started filling its reservoir in 2020
• The dam provides a source of hydroelectric power and controls the river's flow to help prevent drought and flooding in Ethiopia

The resulting conflict

• Egypt was concerned that the reservoir formed behind the dam would lead to the loss of billions of cubic metres of water through evaporation, meaning less water would flow into Egypt
• This led to disputes between Ethiopia, Egypt, and Sudan over the management and filling of the dam
• A partial agreement was reached in 2015, though tensions over the Nile's water remain an ongoing issue