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9 Jul 2013 By Antony Currie, Martin Hutchinson

Ethiopia’s plans for the Nile are emblematic of global water woes. The country is building a dam across the river so that it can become a regional leader in exporting hydroelectric power. That looks at odds with a recent IMF report calling for greater competition in the economy. The project has also angered Egypt – a sentiment likely to be shared by whichever party ends up in power.

Obscured by the rhetoric over the Nile, though, are broader, longer-term concerns about how nations can sensibly grow their economies when water’s either a scarce or shared resource.

In the Nile Basin, it’s both. Though considered the longest river in the world, the Nile discharges less water than 50 others around the globe, barely topping America’s Missouri in that regard. Yet it and its tributaries flow through 11 countries with a total population of 437 million that’s growing fast. Egypt and Sudan, at the end of the river’s course, claim rights over much of the water under a 1959 treaty. Several upstream states, however, have made noises about challenging that arrangement in order to help modernize their agriculture, industry and power supplies.

Water is essential to each of these sectors. Extracting one gigajoule of energy from oil requires more than one cubic meter of water, according to the World Energy Council. Oil sands require up to four times that much, and digging for shale gas 10 times. Meanwhile, as countries become more affluent, their eating habits can change. China’s pork consumption, for example, has doubled since 1990, according to the U.S. Department of Agriculture. Rearing pigs consumes five times – and cows 17 times – more water than growing maize, UNESCO reports.

Population growth is another factor to consider. While the United Nations expects a 14 percent rise globally by 2030, the OECD reckons the number of people living with severe water shortages will increase by a third, to 3.9 billion.

All this supports a measured, cooperative and long-term approach to water use. But national pride or angst often get in the way. That’s the case along the Nile. Egyptians are worried the Grand Ethiopian Renaissance Dam will mean less water flowing downstream. Evaporation and leaks alone could reduce the amount by 15 percent, based on experience at Egypt’s Aswan High Dam.

Currently, Egypt has none to spare. The Nile provides 98 percent of the fresh water Egyptians consume, former Prime Minister Hisham Kandil told CNN in May. Meanwhile, the nation’s population is expected to grow about 25 percent by 2030. After millennia of relying on the river, Egyptian officials’ offhand remarks about considering military action in response to Ethiopia’s plans might not be a surprise. But any such moves could provoke retaliation, including against the Aswan High Dam, and anger China, which is helping finance Ethiopia’s project.

Building the Grand Ethiopian Renaissance Dam seems rational, at least on the surface. The landlocked country’s economy and population are growing quickly, but only one fifth of its citizens are connected to a reliable electricity supply. The dam’s proposed 6,000-megawatt output would satisfy Ethiopia’s current electricity consumption four times over.

But the $4.7 billion construction cost is huge – some 77 percent of the country’s annual tax revenue. Ethiopia is also paying for most of the project itself, despite having only limited access to capital. That appears to fly in the face of a statement last week by the IMF on the country’s economy calling for more private enterprise and competition and less government spending.

And Addis Ababa is already building plenty of dams elsewhere to fill domestic needs. So the plan is to export pretty much all the electricity from Grand Ethiopian Renaissance, for dollars or even oil. The major market would probably be Sudan, whose border is 15 miles from the construction site. Yet that state is already building its own dams.

There are lots of ways to grow an economy other than grandiose projects that risk provoking powerful neighbors. Allowing private land ownership would help, as would promoting small private enterprises.

Longer term, Ethiopia, Egypt and the other countries along the Nile need to work together to make the most of the river. Using water more efficiently in agriculture and even finding ways to reduce the birth rate would help, according to the Signet Institute, a Cairo-based research group. Building better sewage systems, increasing waste-water recycling and desalinating water are possibilities, but they’re costly.

Attempts to charge market rates for water are also problematic. Civil unrest forced Egypt to drop proposed cuts to its roughly two-thirds subsidy of water consumption costs. Sadly, such challenges are common the world over.


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