Can Water Undermine Growth? Evidence from Ethiopia
In Ethiopia the centrality of water is clear. With little water resources infrastructure, relatively weak management institutions and capacity, extreme hydrological variability and seasonality, and a highly vulnerable economy, Ethiopia faces an eno...
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/09/7107372/can-water-undermine-growth-evidence-ethiopia http://hdl.handle.net/10986/9593 |
| Summary: | In Ethiopia the centrality of water is
clear. With little water resources infrastructure,
relatively weak management institutions and capacity,
extreme hydrological variability and seasonality, and a
highly vulnerable economy, Ethiopia faces an enormous
challenge in building the minimum platform of water
infrastructure and management capacity needed to achieve
water security. But until water security is achieved, growth
will continue to be severely constrained. A World Bank study
(World Bank 2006) estimated the magnitude of the impacts of
high water variability on growth and poverty so that the
government can better manage water and manage other parts of
the economy (trade, transport) to reduce the impacts of
water shocks. The study found that considering the effects
of water variability reduced projected rates of economic
growth by 38% per year and increased projected poverty rates
by 25% over a twelve year period. Furthermore, the
variability of rainfall increased value-added of water
investments, such as irrigation, that reduce vulnerability
to rainfall. The study also found that transport
infrastructure played a major role in the inability of local
economies to adjust to localized crop failures, as it allows
areas with food surpluses to sell to areas in food deficit.
This analysis, undertaken in cooperation with the Ethiopian
government, helped to make the issue of water resource
management a central focus of the government's national
poverty reduction strategy. |
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