Sustainable development: easy to preach, harder to do

If things remain as they are, each person in the Middle East will have half the water they have now in 50 years. That’s before you even begin to look at the impact on business

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By  Massoud Derhally Published  October 6, 2002

|~||~||~|Considered a divine gift to mankind by the Torah, Bible and the Quran, water today is even more precious than ever before. SUEZ, arguably the world’s largest water-related solutions provider, said at the recent Earth Summit in Johannesburg that the world had two water problems: resources and access to water. 1.1 billion people (one in six) do not have satisfactory access to water, while 30,000 children die each day from water-related diseases, says SUEZ. That should sound the alarm bells, but it hasn’t.

Of all the regions in the world the Middle East and North Africa (MENA) faces the most severe water shortage, according to the World Bank. The region that accounts for 5% of the world’s population has less than 1% of all renewable freshwater. Water scarcity need only be serious, depending on how governments choose and set policies to allocate water, says Rachel Cardone, author of The Middle East Water Industry and consultant to Environmental Resources Management (ERM), one of the world’s leading providers of environmental consulting services.

“A World Bank source a few years ago cited that 45 million people in the region lack access to safe water and 80 million people lack access to sanitation,” says Cardone.

Per-capita availability of water in the region dropped to 1,250 cubic meters a year in 1996 from 3,300 cubic meters in 1960, by far the lowest in the world, says the World Bank. Moreover, the bank has identified 15 Arab countries [see tables], as having less than 1000 cubic meters of water per person and that number is set to fall to 740 cubic meters by 2015. Factoring in population growth makes water scarcity even more troubling, as the region’s 295 million people will double by 2050 and face severe water shortages by 2025, according to the World Development Report 2003.

“In the Middle East and North Africa region, the strains on natural resources, especially water and fragile lands, are probably greatest compared with other regions,” said Mustapha Nabli, the World Bank’s chief economist.

Given population growth and other demographic variables, this doesn’t bode well for economic development. Without basic access to water, people have less of an opportunity to reach their full potential, so the cycle of poverty is only one example of what the future could hold, according to Cardone.
“Where there is a shortage of water it makes it more difficult to grow food. It makes it more difficult to attract industries that use water, and many of them do, in manufacturing at least,” says Joel Cohen, a professor who lectures on earth and the environment at both Columbia and Rockefeller Universities. “It makes it more difficult to provide good water supplies to cities, it is a handicap,” adds Cohen.

Water scarcity is a serious issue in the Middle East: It will impact business and hold back economic development. How much governments are willing to pay for alternative supplies is key. “Right now we’re seeing $28 a barrel crude oil prices which helps government coffers, but governments are under a lot of pressure to provide services to a population they can’t necessarily support,” says Cardone. “Even though GCC states earned an extra $50 billion in additional income in 2000, oil prices aren’t stable,” says Cardone, adding “You never know what’s going to happen, and, post 9/11 the cost of capital for MENA countries is much higher.”

In the Mediterranean, the economy depends heavily on agriculture and tourism — two largely water-intensive industries. Egypt is growing cotton, which drains water resources, and Jordan is looking to expand its industrial base, which contributes to water pollution.
“Water shortages in the long run will definitely have a negative impact on economic growth. In certain countries, like Yemen and perhaps even Jordan, one can say that water scarcity is already a hindrance for development,” says Peter Koenig, senior water resources specialist at the World Bank.

The water scarcity issue then could have large implications on economic development. But Cardone says that these situations “need to be seen within the context of other macro-level constraints to economic development – high population growth, chasms between rich and poor, such as access to education, issues with expatriate labour from Asia versus domestic labour, and whether the systems of patronage continue or benefits are reduced.”

No country in the Middle East region has effective water demand management systems and economic instruments to rationalise the use of water, according to analysts. Increased groundwater use and aquifer depletion has resulted in a severe overdraft of water resources, as is the case with Jordan, which is 180% overdrawn, and Yemen, which is 140 % overdrawn.

“There is not a culture of paying the true cost of water in the Middle East, or anywhere else in the world for that matter,” says Cardone. “In some countries in the Maghreb there are shifts towards growing more expensive agriculture, but this isn’t necessarily to their benefit due to agricultural trade policies with the EU,” adds Cardone.

Egypt’s policy of providing free water to farmers as long as they grow the crops they dictate —crops like cotton, corn and wheat, has its own economic rationale. But it isn’t necessarily forward thinking with regards to water conservation.

“It reveals a focus towards economic development, which is a huge problem in Egypt,” says Cardone. Instead Egypt has the Aswan Dam and other large-scale supply projects. “Tunisia and Morocco might show the most realistic demand management systems in the MENA region,” says Cardone. “In Saudi Arabia 89% of the water consumed is for agricultural purposes, although produce exports are sold at 30% of their cost to be consumed on the global market. Yet, there is a certain logic to food security –both political and social – that isn’t seen in a general economic model.The potential for conflict over water is very much there. It shows up forcefully in the Euphrates River Valley, where Turkey, with the advantage of an upstream position and a sturdy army, has commandeered much of the river’s water through a $30 billion program for building dams and irrigating fields."

That has forced downstream Syria to curtail its own water development plans and has left Iraq, even farther downstream, at risk as well. This conflict and similar disputes on other rivers crossing national boundaries underscore the need for a globally accepted formula on how to divide up the water from streams shared by many countries.
So how do you mitigate the problem? Some Arab countries are slowly moving towards more rational water management. Tunisia has started with the reuse of treated waste water for irrigation of certain crops. Jordan is trying to develop a plan to rationalise water use and factor it into economic development but that barely makes a dent in the problem.

“Jordan is introducing drip irrigation in the Jordan valley and Yemen, where the only viable source is groundwater and where some basins are already over-exploited by 200% to 300% annually, is discussing introduction of modern irrigation and other means of demand management, such as intensive awareness campaigns,” says Koenig. In Morocco and Tunisia, there are successful examples of private sector participation to increase investments and develop more rational water planning.

Desalination, or the removal of salts from seawaters, has been gaining popularity as a solution to the Middle Eastern water problem for over a decade. When desalinisation first hit the market in 1979 it cost as much as $5.50 for a cubic metre. Today, a cubic metre costs 55 cents, according to Cardone. Despite such reductions, technologies, site construction, and operation are still extremely expensive, says Cohen.

Desalination is a solution as long as there’s a cheap energy source (natural gas) and a way to outflow the brine water, says Cardone. “For the Gulf countries desalination is an option,” she says. In Saudi Arabia for instance, the government has demonstrated its ability thus far to pay for desalination plants.

The kingdom recently signed a water and wastewater 10 year US $10 billion contract for the project management of all the water and wastewater work in the Mecca province. The city suffers from a chronic shortage of water resources and a severe lack of sanitation. According to SUEZ, less than 20% of the city is equipped with a sewer system. At present, the untreated waste water is discharged directly into the sub-soil by wells; the infiltration capacity of the soil has become saturated and the impact on the environment is now discernible.
Non Gulf countries that can’t afford desalination on their own need to consider their options.

Many receive aid from donor countries and the World Bank. As a result, private sector participation, according to analysts, has been minimal. “The problem with private sector capital right now is that there is so much uncertainty in the market and there is not much going on in terms of projects pushing forward because of the sluggishness of the economy,” says Cardone.

The option for the Middle East and North Africa is to reduce demand. This can either mean through family planning, education or implementing food policies that are more sustainable.
“You do this by re-thinking government budget spending and realising that there are limits to what can be attained—given technology and given the natural resources available, and the institutional arrangements that are in place, that lean towards more centralized systems of governance, and dependence and expectations on that governance,” says Cardone.

An economically feasible solution worth considering is a regional water market authority, according to Joel Cohen. It provides a place where countries can come together and bid for the water. Is that possible?

“I think it is fairly feasible,” says Cohen. “Lets take the history of the European countries in the 16th, 17th and 18th centuries. A lot of issues that we now settle by trade and markets were then settled by piracy, by colonialism and war. The French, English and the Spanish fought for hundreds of years in the new world to get resources. Well, we have found a better way. The better way is to trade and let prices determine how much you buy and sell. I don’t think it is out of the question. The question is how much insight do the political leaders have? Middle Eastern countries can benefit from that [European] experience without going through the war stage if they choose to.” ||**||

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