Water Sustainability: How Access to Safe Water Impacts Economic Development

Water sustainability, or the ongoing, reliable supply of clean water, is crucial to maintaining healthy economies. Consider these examples:

• Madisa owns one of her South African village’s only refrigerator/freezers and sells ice from her home.
• Deepa washes clothes for middle class families in a river in southern India.
• Umar owns a restaurant near a bus terminal in Pakistan.
• Mario washes fruit for a banana company in Honduras.

What do these individuals have in common? Their livelihoods depend upon access to water. Without water, Mandisa could not sell her ice, Deepa would have no means of washing clothes, Umar could not cook and sell food, and Mario would not have his job with the banana company.

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Water Sustainability is Essential for Business

Water is essential to the world’s economy and is involved in all areas of business. Water is the cornerstone of development and access to safe water is a fundamental incentive for economic development in many communities around the globe. A stable water supply is needed to generate electricity, irrigate croplands, transport goods, and for recreational activities that are vital to some economies.

People living in rural communities make up the vast majority of those living without clean water and improved sanitation. In lesser developed nations in Africa and Asia, these communities are disproportionately dependent on natural resources in order to live and generate income and therefore endure a heavier burden induced by lack of access to clean water and sanitation.^[1]

At any given time, nearly half of the population of the developing world suffers from illness cause by lack of access to safe water and sanitation.^[2] Due to the high rate of diarrheal diseases worldwide as a result of unsafe water, many are forced to miss work due to illness, losing out on business gains for the duration of their illness.

Losses due to lack of safe water and sanitation are substantial in some of the world’s poorest countries. “Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceed[ed] total aid flows and debt relief to the region in 2003.” On the other hand, “every $1 spent in the sector creates on average another $8 in costs averted and productivity gained.” [3]

Water is Essential for Sustainable Development

Water sustainability is important for entrepreneurs in rural, developing areas. Simple home-based businesses such as vegetable gardens, food preparation, and laundry services require reliable, ongoing access to safe water. In many cases, these tiny businesses have no formal right to the water they use and are at the mercy of larger economic and political players for their water usage. For example, Deepa washes clothing in a local river that is increasingly being polluted with sewage and agricultural runoff. She can do little to protect the precious resource upon which her job depends.

Water is also important for small and medium businesses such as Umar’s restaurant in Pakistan. Umar relies on clean water to provide his customers with safe food and sanitary conditions. The price of the water is a major factor affecting his profits. When the city water supply runs dry, he has to pay a tanker to bring in extra water. Having to do this too much could encourage him to use too little water, cutting corners on safe food preparation, and facilitating the spread of disease.

Water sustainability is essential to large corporations. Large national and international companies rely on a consistent water supply to process their products. If the Honduran government cannot ensure a constant water supply or if it raises water usage prices for the banana company, the company may decide to move, leaving Mario without a job.

Impact of Business Demand on Water Sustainability

Clean water is becoming increasingly valuable and hard to come by as businesses demand more and more of it. The growing scarcity of water raises difficult questions for developing countries: Water sustainability is essential for economic development, so who should have priority access, and what limits should exist? Should the government support Mandisa’s one-woman ice business by offering a cheap water hook-up and subsidized water rates? Should the government demonstrate preference for the multinational banana company, which provides jobs for hundreds? Who will pay the real cost for water services?

Businesses affect the water supply. Mandisa’s refrigerator breaks, but she lacks the means to repair it or remove the equipment from her property, which is adjacent to a stream. She discards the broken refrigerator in her back yard, where it begins to decompose.

Deepa washes clothes with a phosphate-based detergent. The detergent washes downstream, where another village obtains its drinking water. Umar’s restaurant is one of many local businesses that use a lot of water. In the middle of the day the town’s water supply often runs dry, leaving residents without drinking water.

Mario uses almost fifteen kilos of water to wash one kilo of bananas. He notices that the runoff is deposited into a nearby river that feeds into the ocean. He wonders how this pesticide-and-fertilizer-laden water affects the fishing industry in his coastal hometown.

Many business endeavors potentially harm the water supply. Who should regulate them, and how? At what point should a business be held responsible for polluting? Should Deepa and the dozens of other women washing clothes in the river be charged, or should only the multinational banana company be held accountable?

Business Can Influence the Availability of Safe Water

Business must be on board if countries are to have safe water. According to the World Business Council for Sustainable Development, global water use can be divided into three major areas: about 70 percent is put to agricultural use; 20 percent is used by industries; and 10 percent is consumed by households. [4] Therefore, 90 percent of water use (not taking into account subsistence farming) could be classified as being used for business purposes.

How businesses use water is the single most important factor in influencing the availability and condition of the world’s freshwater resources.

If the world’s population is to have access to safe water, business at all levels—from home enterprises to multinational corporations—must be on board in making it a priority.

Access to clean water is crucial to maintaining healthy economies, and increasing the supply of clean water can be a viable avenue in which to grow economies around the world. Keeping clean water supplies safe from pollution and harmful runoff continues to be a challenge. Lifewater’s WASH programs build on people’s understanding of the connection between water and business and provide new tools to avoid polluting the community’s water source and find safe water when existing sources are unreliable or contaminated.

[1] Stockholm International Water Institute. Making Water a Part of Economic Development: The Benefits of Improved Water Management Services, 2005, 16-19.

[2] United Nations Development Program, Beyond Scarcity: Power, Poverty and the Global Water Crisis, Human Development Report (2006), 6.

[3] United Nations Development Program, Beyond Scarcity: Power, Poverty and the Global Water Crisis, Human Development Report (2006), 6.

[4] World Business Council for Sustainable Development, Collaborative actions for sustainable water management (August 2005): 1.