Water Cycle & Quality of Life

Good Day! Special thoughts to all people who lack basic amenities such as clean water. Access to clean drinking water is a basic human right.

💦 Water Cycle

Water inequality is not just an issue of local distribution of water. A recent report by the Water Commission demonstrate that water forms part of a global cycle. Any disruption to that cycle will not only have severe consequences on some areas of the globe but also to the potential global GDP.

It predicts that at the current rate of water usage and environmental destruction,
- the median GDP of high income countries will shrink by 8% by 2050
- more than half of global population will live in areas at risk of water scarcity at least one month per year.
- lower countries will face a steeper drop estimate between 10-15%.
In short, current environmental destruction will only exacerbate water inequality.

The report recommends a number of policy measures to mitigate these negative impacts. Some key policy measures are:

• Revamp the food system to make better use of water

• Establish a circular water economy

• Promote clean, water-efficient energy

• Create collaborative multi-sector partnerships

• Invest in data-infrastructure to collect water related data

• Global governance reforms of water resources

The impact of the package of policy recommendations of the report would turn potentially negative GDP impact into neutral or positive GDP gains as shown below.

Lower middle and low income countries have more to gain from implementing these set of policies. This shows the current disproportionate impact on low income countries. It also highlights that high income countries have much to invest for gains they will potentially not see directly. Good luck to politicians convincing their electorate.

In the same week, the FAO announced that The Rome Declaration on Water Scarcity in Agriculture, was adopted on the 17 October 2024. It acknowledges the global challenge of water scarcity, exacerbated by climate change. This declaration, initiated by the Global Framework on Water Scarcity in Agriculture (WASAG) and supported by FAO, emphasizes the critical impact of water scarcity on agriculture and food security. It stresses the need for integrated water resource management, sustainable agricultural practices, and ecosystem restoration to address these issues.

The Water Commission report also stresses the lack of data at a global scale when it comes to water. Much effort is required to set up the infrastructure to collect such data.

✨ Innovative Policies

• The IMF has announced it will reduce surcharges that will benefit 20 countries. Economists have long argued that these surcharges only increased the debt of debt-ridden countries. These surcharges are levied on countries which had exceeded their loan quota or had repayment periods beyond 3 years.

• Egypt is not always first in mind when it comes to innovative policies. The government has allocated 5% of new housing plots to people with disabilities across 20 cities.

• Turkey has its first private international freight train line running to Bulgaria. This is part of country’s plan to expand its rail connections to its neighbouring countries to boost exports. With growing maritime tensions, railway transport is proving to be a vital investment for future competitively.

• Saudi Arabia has launched a foreign Worker Insurance programme. As it names stakes, this insurance covers unpaid wages in case the company for which they work for goes bankrupt or does not pay its workers. The insurance also covers the cost of a ticket from Saudi Arabia to their home country.

⚔️ Brewing Tensions

• Iraqi protesters stormed and damaged the office of the Saudi owned MBC channel. The tension arose after a report of the channel listed Iranian proxies as “terrorists”. Saudi Iranian tensions is spilling to other countries.

• China has invited Colombia to join its Belt and Road Initiative sparking alarm in Washington.

• South Africa has asked Taiwan to move its embassy from Pretoria under Chinese pressure.

• Algeria and Mauritania have signed a military agreement to share information. This comes amid brewing tension between Algeria and Tunisia.

• North Korea has sent approximately 10,000 troops to Russia. Speculation is rife about whether they will be fighting in Ukraine. In separate news, North Korea has blown up a road linking it to the South. This comes amid speculation that the South had sent drones to its capital Pyongyang.

• Speaking of drones, Mali has accused Ukraine of sending drones to the country’s rebels.

• Rwanda has accused Tanzania of blocking its milk exports. The tensions date back to more than a decade.

• Morocco has backed the UAE in its dispute over three islands in the Persian Gulf.

  

  Iran took control of the three islands in 1971. UAE considers these island part of the emirate of Sharjah.

🗳️ Democracy

• Chad is going to the polls on the 29th December 2024 for legislative, provincial and municipal elections. The country is still reeling from the floods that hit the country last month.

• Moldova is going to the polls today to elect a new president which could be crucial for the country’s future as to whether it leans towards the EU or towards Russia.

• Nigeria is considering proposals to allow independent candidates to register for future elections.

• Ghana’s ruling party has lost it slim majority after two MPs defected. This comes ahead of the 7th December elections.

• Brazilian state of Para will now consult indigenous people on the sale of carbon credits.

💵 Money talks

• Sweden is drastically changing its fiscal rules. In a move which has gathered the support of the opposition, the government is to change the law which required it to present a budget surplus and to keep debt below 35% of GDP. The change will take effect as from 2027 and will allow the country to significantly increase its spending - especially in the defence area.

🛂 Migration policies

• Turkey is opening up its labour market to foreign workers as it faces a lack of skilled workers. The process to obtain a work permit has been streamlined and work visas now span up to three years. Moreover, foreign workers can start work on other visas while waiting for their work visa to be approved.

• Germany is opening up its labour market to skilled Asian workers - specially in the IT sector. This comes after official data showed continued lacklustre growth.

• Indonesia has removed tourist visa requirements for 96 countries in an effort to boost its tourism industry.

⚡️ Energy

• Cuba has been plunged into darkness this week after its main electric central failed. Much of the country remain in darkness.

• Nuclear has become fashionable again this week. Google, Amazon and Microsoft have all announced initiatives to invest in small modular nuclear reactors to power their energy thirsty AI. It is estimated that data centres will consumer more than 9% of electricity generated by 2030. A three fold increase compared to today.

🌱 Climate & Environment

• Good news! Mozambique reports that there has been no elephant poaching since 2018 in the Nissan Reserve. In addition, Kenya has relocated 50 elephants to a larger park in a sign of declining poaching and a growing elephant population there. 🐘

• The worst wildfires since 2006 in Brazil have destroyed nearly 22 million hectares.

🤝🏻 Sweet deals

• Saudi Arabia is looking to purchase stakes in Zambian copper and nickel companies and mines. The deal could be worth up to $2 Billion.

• Serbia has obtained $ 205 million loans from Saudi Arabia.

🔎 Interesting Research

• Housing inequality is a complex issue. However, despite research being skewed towards rich European countries, some facts are becoming clear:

  • Deregulation policies have favoured rich areas disproportionately compared to poor areas.

  • The roots of housing inequality is unique to each country. European inequality steps more from deregulation whereas American inequality is driven by race and ethnicity.

  • Access to mortgages substantially exacerbate inequality. Residents of poor areas have less chances of having their mortgage application approved.

  • Housing inequality has a negative effect on health, education and income potential.

  • The research recommends that:

    (1) Housing policies take not consideration their long term effect.

    (2) Research be conducted in developing countries and smaller cities and villages to have a comprehensive understanding of the effects of housing policies.

    (3) Future research explores how other drivers of inequality affect access to housing.

    (4) Include socio-cultural factors in housing policies.

    (5) Housing policies encourage collaboration between the private sector, communities and government institutions.

• Negative news has a hidden cost. A recent report by Africa Practice has estimated that Africa loses up to £3.2 Bn annually in additional debt related payments due to negative stereotypes peddled in the international media. The African Union plans to set up its own credit rating agency which is due to start work next year.