The problem of fresh water as structural factor of the world economy

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The problem of fresh water as structural factor of the world economy

Y.P. Filina,

K.O. Zaitseva

Abstract

This article reveals the main reasons for the emergence and increase of fresh water scarcity. The global problem of water shortage affects the economies of countries; it can cause structural restructuring of the world economy. In addition, the crisis with fresh water causes an increase in demand for water-intensive products and water-saving technologies. The article also presents rational ways to solve the global problem of freshwater shortage in order to improve the economic situation. water economy crisis

Keywords: water resources, global problem, deficit, world economy.

Проблема пресной воды как структурный фактор мировой экономики

Ю.П. Филина, студент

К.О. Зайцева, студент

Санкт-Петербургский государственный экономический университет

(Россия, г. Санкт-Петербург)

Аннотация. В данной статье раскрываются основные причины возникновения и повышения дефицита пресной воды. Глобальная проблема нехватки воды влияет на экономику стран, она способна вызвать структурную перестройку мировой экономики. Кроме того, кризисная ситуация с пресной водой обусловливает возрастание спроса на водоемкую продукцию и водосберегающие технологии. В статье также приведены рациональные пути решения глобальной проблемы нехватки пресной воды, для улучшения экономического положения.

Ключевые слова: водные ресурсы, глобальная проблема, дефицит, мировая экономика.

Fresh water is the basis of our existence and development as the source of all life on the Earth. The unequal distribution of water resources on the continents has repeatedly caused social catastrophes and crises. The lack of fresh drinking water on the planet is considered as one of the global problems of our time. A shortage of fresh water worsens the conditions of life and slows economic development of countries. The world's population is growing rapidly today, which leads to an increase in the consumption of fresh drinking water. Constant population growth, overexploitation of water resources, industrial pollution, and intensification of agricultural production, global climate change, and natural scarcity of fresh water resources (which is only 2.5% of the total water volume in the world) are the main reasons of the growing water crisis in the world.

Figure 1. World water resources (km3 / year) [1]

Most secured water resources in the following countries: Brazil (8 233 km3), Russia (4 508 km3), USA (3 051 km3), Canada (2 902 km3), Indonesia (2 838 km3), China (2 830 km3), Colombia (2 132 km3), Peru (1 913 km3), India (1 880 km3), Congo (1 283 km3), Venezuela (1 233 km3), Bangladesh (1 211 km3), Burma (1 046 km3).

Fresh water effects all spheres of human activity - from agricultural and industrial development to humanitarian and political processes. Water scarcity has significant impact on an agriculture, which is the main consumer of water resources (70% of total water abstraction). Water was considered as self-evident good thing a few decades ago. It was almost free or very cheap. It is more often now being compared with oil. There is a logic in this. The reserves of both fresh water and "black gold" on the planet are limited. Although the water covers 70% of the Earth, the water suitable for drinking is less than 1%. Therefore, water is a rapidly dwindling resource that can become a demanded commodity.

"Unsurprisingly, bottled water has become the fastest growing beverage market in the world in the last two decades. In 2013, its volume equals to 157 billion dollars. The market is expected to grow almost twice - to 280 billion by 2020. Comparing with 1980, global water sales increased by one hundred times." © RIA News / Mikhail Voskresensky. Scientists, in turn, were able to explain why people buy bottled water. Thus, Russia consumes almost 10 times less bottled water than the European countries in average. This is largely due to the insufficiently high purchasing capacity of the population. However, in the last 5 years the volume of bottled water production in the Russian market was constantly increasing. People's fears of being infected by tap water and market activity of manufacturing companies also have influence on this fact. Bottled water in itself is quite expensive pleasure for developing markets, despite the fact that its sales grow there the most quickly. "The bottled water market is expanding particularly rapidly in Mexico, China and India. However, it is due to the wealthy segments of the population primarily. The poor people either continue to drink polluted water, or get sick, or pay a very high part of their meager incomes for alternative sources of the water," the researchers of the Canadian Polaris Institute state. Bottled water in Russia is quite cheap. Its regular consumers are people with an income of 15-25 thousand rubles per month, and the share of importing bottled water in the domestic market is relatively small - only about 2%. It is also necessary to refer to the data that are more accurate. For example, over the past three years there has been a decline and rise of the production of mineral water in Russia (in General). 11,652,244.8 thousand of half-liters of mineral water were produced in Russia in 2017 (in General), which is 2.7% below the production volume of the previous year. Thus, the production of mineral water (in General) decreased by - 1,2% in December 2017 and by the level of December last year amounted to 902,709.2 thousand half-liters. The Central Federal district (with the share of about 26.5%) became the leader in the production of mineral water (in General) from the total volume of water produced in 2017. The average producers' prices for mineral and aerated unsweetened and not flavored water fell by - 0,3%, from 5,591 rubles per thousand half-liters to 5,575.4 rubles per thousand half-liters in the period of 2015-2018. The greatest decline in average producer prices occurred in 2017, when the growth rate was - 4.5%. The average price of producers of mineral and carbonated unsweetened water and not flavored in 2018 increased by 7.7% compared to the level of previous year and equaled 5,575.4 rubles per thousand half-liters. The average retail price of mineral water in 2018 equaled 31.3 rubles per liter. The volume of bottled water import, including mineral and aerated (without adding sugar or flavoring substances) to the Russian market increased in 2016 year comparing with the previous year by 10,365 thousand liters (+9%) to 121,060 thousand liters. The volume of Russian export of bottled water in 2016 increased comparing with 2013 by 116% from 45,183.5 to 97,545.6 thousand liters. The largest share (29.6%) of export of mineral water containing additives of sugar or flavoring substances from the Russian Federation was sent to Ukraine in 2016 [2].

It is also predicted that in 2020 the shortage of water will be one of the main problems that prevent the further development of the humanity. To the greatest extent, this will affect the countries in which: intensive population growth, a high level of industrialization, accompanied by pollution of the environment and water in particular, the lack of water purification infrastructure, high need for the agricultural sector, and medium or low level of social stability, the authoritarian structure of the society.

Water resources are very valuable for the development of the country and occupy the second place in the importance, after oil and gas. The issue of water resources management is very important not only for the consideration of countries themselves, but also for a large number of international organizations, as it is a global problem. The problem of scarcity of drinking water resources is becoming extremely acute in several regions of the world. More than one person out of every six in the world today does not have access to sufficient drinking water (about 1.1 billion), and more than two persons out of every six people do not have adequate sanitary conditions (2.6 billion). "The connection between the access to the water and the poverty is clear: the number of people living on less than $ 1.25 per day coincides with the number of people without access to safe drinking water", - says in accordance with the third report "World Water Development Report" [3]. Each person on the Earth has 24,646 cubic meters (approximately 24,650,000 liters) of the water per year in the average. "Approximately 700 million people in 43 countries have water resources below the minimum human need. This figure could increase to 3 billion people, as the need for the water will increase in China, India and sub-Saharan Africa by 2025. About 540 million people in Northern China are already living in conditions of the water shortage. A person needs at least 20 liters of water per day. However, 1.1 billion people in the developing world use no more than 5 liters per day. "At the same time, residents of Europe, taking into the account the industrial use, consume up to 200 liters of the water per person, and the US population - up to 400 liters" - the UNESCO report "Water in a changing world" says. " Now more than 1.2 billion people already live in conditions of constant shortage of fresh water, about 2 billion people suffer from it regularly (in the dry season, etc.)" - according to the UN. According to FAO projections, "the number of people living with a permanent water shortage will exceed 4 billion people to the middle of the third decade of the XXI century" [4].

The structure of the world economy is being restructured under the pressure of the threat of a global water crisis, which creates very favorable conditions for water-rich countries, since in this case the growth of the demand and prices for water-intensive products is inevitable. Its exporters will find themselves in a situation similar to that of the current oil exporters. It will be possible to take advantage of such chance only in terms of serious preparation for the development of export water-intensive productions.

There are many different ways to solve this problem. It should be noted also that, in this regard, countries with large reserves have great potential to benefit from their situation. However, now all the value of fresh water has not yet led to the work of the global economic mechanisms and the most effective work in this direction is the work of the countries with a shortage of fresh water. Today there are projects of transportation of glacial reserves of fresh water. Antarctica glaciers are of great interest in this respect because they contain the largest supply of fresh water. The project involves the transformation of icebergs into ice chips and then transporting it by cargo ships. A special problem here is the way of transporting glaciers to the regions that are in the biggest need in the water. It is appropriate to transport icebergs to the nearest continents to Antarctica: Africa, South America, Australia. However, the icebergs will have to be transported only by cold currents to avoid premature melting of the ice, which complicates this process. The transportation of icebergs to the Northern hemisphere will be much more expensive. Unfortunately, these ideas remain only projects at the preliminary stage of their development (mainly on "paper" stage) because of its high cost. However, many countries are already showing interest in such projects, for example, the USA, France, Canada, Saudi Arabia, Egypt, Australia and others. In average, these projects are 100 times more expensive than ordinary desalination [5]. Another solution of this problem is multilateral programs that are developed and implemented within the framework of various international structures and are based on the interaction of States and businesses. The European Union has advanced the most in this regards by creating a set of legislative acts and procedures. Among them-the "EU Directive on water management and drought management", which requires, first of all, the implementation of the European policy for the prevention of droughts. More than 80 organizations are involved in its development, including the European drought center, the working group on water scarcity and drought management, a number of universities and expert centers, and international organizations.

Ultimately, based on the above stated, it can be concluded that the countries of the world need to make as much effort as possible to conserve fresh water sources, as well as to look for possible cost-effective ways to address freshwater scarcity problem in many countries of the world, both now and in the future.

References

1. http://www.cawater-info.net/all_about_water/?p=14666

2. The company Alto Consulting Group, the Market of bottled water. Current situation and forecast for 2018-2022.// http://alto-group.ru/otchot/marketing/361-rynok-butilirovannoj-vody-tekushhaya-situaciya-i-prognoz-2014-2018-gg.html

3. http://unesdoc.unesco.org/images/0023/002318/231823E.pdf

4. Danilov-Danilyan V. I., global problem of water scarcity // https://www.socionauki.ru/journal/articles/129824/

5. http://www.municipal-sd.ru/pdf-files/water/14.pdf

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