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World heads for 'water bankruptcy', says Davos report

February 2, 2009

January 30, 2009

DAVOS, Switzerland (AFP) — The world is heading toward "water
bankruptcy" as demand for the precious commodity outstrips even high
population growth, a new report warned Friday.

In less than 20 years water scarcity could lose the equivalent of the
entire grain crops of India and the United States, said the World
Economic Forum report, which added that food demand is expected to
sky-rocket in coming decades.

"The world simply cannot manage water in the future in the same way as
in the past or the economic web will collapse," said the report.

Water has been consistently under-priced in many regions and has been
wasted and overused, the report said.

Many places in the world are on the verge of "water bankruptcy"
following a series of regional water "bubbles" over the past 50 years.

The report said that energy production accounts for about 39 percent of
all water used in the United States and 31 percent of water withdrawals
in the EU. Only three percent is actually consumed, but competition for
access to water will intensify over the next two decades.

Water requirements for energy are expected to grow by as much as 165
percent in the United States and 130 percent in the EU, putting a major
"squeeze" on water for agriculture, said the WEF.

The report said most glaciers in the Himalayas and Tibet will be gone by
2100 at the current rate of melting, but they provide water for two
billion people. About 70 major rivers around the world are close to
being totally drained in order to supply water for irrigation and

The WEF said that within two decades water will become a mainstream
theme for investors -- even better than oil.

Speaking at the Davos forum on Thursday, UN Secretary General Ban
Ki-moon said: "The water problem is broad and systemic. Our work to deal
with it must be so as well."

Corporate chiefs at the forum have also expressed concern. "I am
convinced that, under present conditions and considering the way water
is being currently managed, we will run out of water long before we run
out of fuel," said Peter Brabeck-Letmathe, chairman of Swiss food
conglomerate Nestle.

"The only way to measurably and sustainably improve this dire situation
is through broad-scale collaborative efforts between governments,
industry, academic, and other stakeholders around the world," said Indra
Nooyi, chairman and chief executive of PepsiCo Inc, the US drinks major
that makes huge use of water.

Dominic Waughray, the WEF head of environmental initiatives, said
"management of future water needs stands out as an urgent, tangible and
fully resolvable issue for multiple stakeholders to engage in."
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