The Entire World is a Stakeholder on Water Scarcity

drinking waterA Pacific Puffs clerk saved my life. Well, not really. But after a long day of scavenging the Treasure Island Flea Market and fighting crowds in San Francisco’s Union Square in search for good deals, I realized that I had not had a glass of water to drink all day. I was at the Powell Bart Station about to meet a friend. I looked around for options but couldn’t find a place to quench my thirst. My throat felt parched. I turned the corner and saw Pacific Puffs; I walked up to the clerk, embarrassed that I didn’t want to purchase anything, but with a dry cough I asked for a cup of tap water. Without hesitation, the friendly clerk handed me a nice, large cup of salvation.

Living in the U.S., in a city with amazing tap water for that matter, it is easy to forget that for many people around the world, obtaining a cup of water is not so easy. Government’s mismanagement of resources and their failure to invest in irrigation infrastructure, coupled with increasing instances of water-related natural disasters as a result of climate change, has led to many countries facing severe shortages of drinking water. Lack of drinking water, along with poor sanitation, leads to the biggest killer in the world, diarrhea. Eighty-eight percent of diarrhea cases are directly related to unsafe drinking water and lack of access to sanitation facilities.

One of the United Nation’s (UN) Millennium Development Goals (MDG) was to reduce the number of people without access to clean drinking water and basic sanitation by half. Although the goal was set for 2015, it was reached in March 2012 with great enthusiasm from the global community. However, roughly 894 million people around the world still do not have access to clean water, and 40 percent of these people reside in sub-Saharan Africa. According to the World Health Organization, about 25 percent of residents in Ghana and Sudan still do not have access to water, which, when compared to Ethiopians where 76 percent of residents do not have access, seems like an accomplishment.

The estimated global expenditure on insufficient water-related health care is $260 billion dollars. The economic loss as a proportion of the GDP related to scarcity of drinking water is anywhere from 0.5 to 4.3 percent, the higher end being the estimate for sub-Saharan Africa. In fact, on any given day in this region, over half of hospital beds are occupied by patients suffering from a fecal-related disease.

This region has also faced high corruption rates in the ruling governments and what development economists call the curse of natural resources, leaving many with crippled economies and extremely low budgets. This led many international organizations to become involved and try to help.

One cannot put a dollar cost to all the lives lost because of this issue, however, the World Bank estimates that $5.7 billion dollars would be saved annually if all people had access to clean water and proper sanitation. Sub-Saharan Africa would be saving approximately $1.9 billion dollars. Analysts estimate that $145 billion dollars needs to be invested in water and sanitation to eradicate this issue. The regions with the most need are Sub-Saharan Africa and southeast Asia.

The availability of fresh water is seen as a growing crisis worldwide. With a fast-growing, worldwide population, the need for food rises concurrently. The use of water for agriculture accounts for the largest percentage of water usage in all countries, whether OCED or developing. In fact, in developing countries, which have yet to benefit from scientific innovation in irrigation systems, the percentage of water used for agriculture is much higher, approximately 80 percent. But water is also used to produce clothes, electronics, to move our waste, keep us healthy and so on. The availability of fresh water is decreasing as our demand for it continues to rise.

This has enormous environmental implications. National Geographic published a series on eight drying rivers with the hopes of raising awareness of the severity of the freshwater issue. One photo published shows the once-fertile Colorado River delta completely dry. This river provides fresh water to the majority of the southwest United States, and also helps to preserve biodiversity along its path.

Research and innovation with respect to water usage, to help prevent further degradation to the environment, is greatly needed.

As cliché as it may sound, we are all in this together. The entire world is a stakeholder on the water issue. Less than one percent of the earth’s water is fresh water, and of that, only a percentage is not frozen and readily available for usage. People are currently using 50 percent of the fresh water available annually, which is more than what the earth is able to restore within a year. The availability of fresh water compared to the demand of fresh water is putting extreme pressure on this resource.  The UN has estimated that anywhere from 2.7 billion to 3.2 billion people will live in water-scarce regions by 2025.

All industries use water, some more than others, and as water becomes less available, and therefore more expensive, it will be in all business’s interest to use less water. In fact, many large corporations have shown great interest in the water issue already, not because of an inherent belief in helping to save the environment, but rather as a means to help save their businesses. This important, and historically overlooked, operational risk and associated costs are expected to rise exponentially in the coming years.

Many governments have begun to monitor water usage to help force awareness of the issue. Cities in water-scarce regions, such as San Diego, California, have put water-usage policies in place to help relieve drought conditions. To date, the policies have had great success. Such measures might become increasingly common as the world continues to face drought conditions.

The availability of clean drinking water continues to decrease. The crisis is most clearly seen amongst rural people in Sub-Saharan Africa, where the average person – usually women and young girls – must walk 12.4 miles round-trip to fetch water for the household. However, even in San Francisco, where clean tap water runs endlessly and a cup of salvation is always around the corner, the problem still persists and is growing.

By Lina Shalabi, Ruben Piza, Jiuyi Zhou, Maria Spiridonova, Xuan Zhang. The authors are Master of Social Entrepreneurship candidates at Hult International Business School. 

[image credit: barefoot photographers of Tilonia: Flickr cc]

Hult Social Entrepreneurship

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