June 11, 2012 / 1:24 AM / in 5 years

River basins critical for emerging markets: report

LONDON (Reuters) - Poor management of water resources could stifle economic growth in some of the world’s most rapidly developing economies, according to research commissioned by banking group HSBC.

The study, by consultancy Frontier Economics, estimates that by 2050 the world’s ten most populous river basins will be producing a quarter of the globe’s gross domestic product, compared with 10 percent now.

But seven of them will be facing water scarcity without significant investment in better water management.

“This could mean the GDP growth expected in the river basins would not materialize - and would therefore mean wider forecasts for emerging markets will not be achieved,” the report said.

The key river systems identified by the study are mostly in China, India and North Africa. They are the Ganges, the Yangtze, the Indus, the Nile, the Huang He (Yellow River), the Huai He, the Niger, the Hai, the Krishna and the Danube.

HSBC published the report on Monday alongside plans to invest $100 million via the WWF, WaterAid and Earthwatch charities to improve access to safe water in these river basins, which supply some of the bank’s most important markets.

“This is a very strategic commitment,” said Nick Robins, head of the bank’s climate change center.

The report estimates that every dollar spent on improving access to safe water and sanitation gives an average return of $5 in terms of economic activity.

On a global basis, providing universal access to safe water and sanitation could boost the world’s GDP by $220 billion a year, the report said. The gain in Brazil, India, and China alone would be more than $113 billion.

Reporting by Chris Wickham; Editing by Ruth Pitchford

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