According to a recent World Bank Group report, as much as 66 percent of. of the global population live in areas where water is scarce for at least part of the year. The authors of the study focused on analyzing the progressive desertification and periodic droughts in the context of their negative impact on per capita economic growth. Unfortunately, according to the report, it is the poorest countries that are most threatened by the crisis.

Droughts in the world – the latest data

According to empirical data, there is no doubt whatsoever that over the past 50 years, rainless periods have increased in both their intensity and geographic range. In doing so, their territorial variability is up to twice as great as the temperature variability. A World Bank Group reportDroughts and Deficits Summary Evidence of the Global Impact on Economic Growth highlights the outlook to 2050. Are very disturbing.

If you combine projected demographic growth and forecasts of further worsening water deficits, the zone of very high risk becomes most of central, northern and western Africa, the entire Arabian Peninsula, the area from India to Uzbekistan, plus Mongolia, the Philippines, Peru and the Greater Antilles. These are mostly countries where economic growth has remained low for years.

Meanwhile, since the 1980s. In the 1970s. The area of land with less than average precipitation continues to grow intensively. Cases of severe drought in some regions have increased by more than 230 percent over the past half century. The dry trend is accompanied by increasingly frequent episodes of heavy rains that bring flooding, worsening the socio-economic situation. Floods, being more violent and sudden, attract more attention from politicians and investors; while droughts, quiet and slow processes, often remain ignored, even though their long-term impact on social and economic functioning is catastrophic and much more dangerous.

In 2019-2022, the most drastic episodes of drought and desertification were recorded in the Horn of Africa and the south of the continent, Madagascar, central Asia, Mexico, Brazil and Chile, but also in European countries – Turkey, Spain, Italy and Moldova.

Impact of droughts on economic growth

A World Bank Group report describes the impact of droughts and various rainfall scenarios on economic growth using complex econometric models. He takes changes in per capita GDP growth as the main comparative indicator. The analysis used data from 82 countries around the world, collected over the past 25 years. What did it turn out to be?

In poor and middle-income countries, moderate-intensity drought reduces GDP growth by 0.39 percent; while for extreme drought the reduction was estimated at 0.85 percent. This calls for emphasis that the overall average economic growth in this group of countries is 2.19 percent, so the vagaries caused by water deficits are economically very severe. On the other hand, in developed countries, the impact of droughts on the economy is more than halved with much higher baseline GDP per capita growth. The authors of the report conclude that in wealthy countries mild and moderate droughts have no significant impact on economic growth, while extreme ones inhibit it to a very limited extent.

The economic consequences of drought are also partly determined by geography itself. Dry areas are generally less favorable for agricultural development, and the reduction in already low precipitation levels has particularly drastic effects here. All the more so because lower-income regions are not investing in infrastructure to strengthen the resilience of water-sensitive sectors. Interestingly, episodes of heavy precipitation in developing countries have a neutral or slightly positive effect on economic growth, while in developed countries they reduce per capita GDP growth due to costly damage to infrastructure and urban fabric.

Droughts and deficits in the world’s poorest countries

The primary reason for geographic disparity in terms of the economic impact of droughts is the level of dependence on agriculture. The more a country’s economy and social welfare depend on crop yields, the more catastrophic the effects of a water deficit. In regions where cropland accounts for less than 20 percent of the analyzed area, rainfall deprivation reduces economic growth by just 0.14 percent, while in places with arable land exceeding 75 percent of the total analyzed area, the reduction in per capita GDP growth is estimated at as much as 0.74 percent.

Unfortunately, as Kenya‘s years-long drought demonstrates, the severity of water scarcity is more significant the lower the moisture level in the soil. The latter, in turn, is influenced by temperatures, erosion and, above all, persistent droughts over extended periods. In addition, the lack of precipitation in many regions causes a decline in energy production, due to both the disruption of hydroelectric power plants and the inability of conventional cooling. In turn, power outages are colossal losses for industry and services.

The report Droughts and Deficits... emphasizes at the same time that for many people, water scarcity is a kind of seal of fate. In agricultural areas of Africa, female infants born during the drought will suffer from its effects for the rest of their lives – both in terms of physical development and education, and thus later earnings. According to the UN, in 2022. In Ethiopia, Kenya and Somalia, up to 22 million citizens were at risk of starvation due to lack of water.

Proposed solutions, or how to reduce the impact of droughts on economic growth

The report Droughts and Deficits... first and foremost emphasizes the important role of healthy forests in reducing the extent and impact of droughts. Trees not only create a microclimate, but also help retain water in the soil at times when it is abundant and store it for longer. Calculations by the World Bank Group make it clear that areas with greater forest cover experience much less of a slowdown in economic growth due to lack of rainfall. So-called “green water” acts as a buffer layer against drought, and its accumulation helps mitigate the effects of excessive rainfall.

In addition, the report provides a range of guidance for decision-makers responsible for shaping climate change adaptation strategies. And without appropriate intervention, the land area and population experiencing extreme periods of drought is expected to increase to as much as 8 percent. at the end of this century (in 2005 it was 3 percent). There is also a serious threat to achieving two of today’s priority goals: sustainable development and social inclusion.

A proactive approach to the problem of worsening droughts and their impact on economic growth should include:

  • Development, implementation and integration of early warning systems for floods – where they are currently lacking;
  • Investments in infrastructure, particularly for retention, closed-loop circuits, water reuse, desalination, irrigation, rainwater harvesting, artificial aquifer recharge (MAR) and reduction of water losses;
  • Institutional support in the form of adequate policies, legislation defining roles and responsibilities, and the establishment of committees for the development of the company. drought;
  • financial mechanisms to mitigate risks for the most vulnerable groups in each country;
  • Coordinated short- and long-term planning at the levels of localities, catchment areas, regions and entire countries.

The modern world, according to the report’s authors, is unprepared to manage the risks and consequences of drought, which is partly to blame for the lack of awareness of its economic consequences. The report Droughts and Deficits... is intended to raise this awareness, drawing particular attention to the urgent need for action.

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