The Silent Crisis

It is easy to feel giddy about the rise of the Silk Road. But the outcome is far from guaranteed. One threat in particular might yet bring the region to its knees.

Water.

There is no escaping the Silk Road’s water shortages. The region is one of the driest parts of the planet. Yet, water is needed to run everything from textile factories in China, five-star hotels in Dubai, to washing- machines in Cairo.

Let’s start with a few figures. The Silk Road has an average of 2,260 cubic meters of internal renewable water per person. The equivalent figure is 9,300 in the United States. In fact, an abundance of water is an important, but often overlooked, reason why the United States might defy its critics and remain the world’s major power through the end of this century.

I recently read a few stories that speak to the challenges of water shortages.

In Syria, an estimated 250,000 Syrian farmers have had to abandon their land due to drought in the last three years, according to a recent United Nations report. Many have headed to the already overpopulated cities of Aleppo and Damascus.

Agricultural accounts for 90% of the country’s water consumption. Yet, agricultural subsidies have encouraged overproduction, and excessive use of ground water. The country, once famed for its lush farmland, is facing agricultural ruin.

I was intrigued to read that Hasakah, a northeastern province, is worst affected. It was Hasakah’s governor who recently made a trip to China’s Hunan province to study its economic reform experience. Hunan is largely agricultural, but developing fast, and might have some useful advice to offer.

In Iraq, the situation is even worse, according to a recent report by Memri, a research institute. The share of water flowing into Iraq has fallen by two-thirds, mainly because of dams built by Syria and, especially, Turkey. Nearly 45% of the country is affected by desertification says an environmental official.

It will only get worse. Turkey is in the midst of a massive dam-building scheme that will utilize the waters of the Euphrates and Tigris Rivers with the construction of 22 dams and 19 hydro-electrical plants. It’s a beggar-your-neighbor policy that might do more to spoil Iraq’s rebuilding than Islamist extremists.

In China, the country’s northeast is suffering its worst drought in fifty years. Industrial pollution has also made many rivers unfit for drinking. The country’s capital, Beijing, must now rely on its already parched neighbors to supply water.

The initial response was to try and ship water to where it was needed through an ambitious $62 billion South-North Water diversion project. But increasingly, officials recognize that the problem owes to demand as much as supply. Water is simply too cheap.

So city governments are raising prices. Andrew Batson, writing in the Wall Street Journal, observes that Shanghai raised prices 25% in June and plans another 22% later in the year. It isn’t alone. Luoyang, a city in the centre of the country, has proposed a more than 40% increase.

I have long believed that China’s growth model provides a compelling example to the rest of the region. The fact that a Syrian governor is travelling to the Chinese province of Hunan on a study trip is a case in point.

Water is another. If China can successfully reform its water demand, without producing social unrest, then the Silk Road’s other governments may feel emboldened, for instance, to push through the same double-digit price increases.

Let’s hope China is successful, the region might yet depend on it.