This Global Catastrophe Could Dwarf a Recession in Damage
(Kitco News) - Countries around the world are running out of water, and these crises are expected to continue, said Steve Hanke, professor of applied economics at Johns Hopkins University.
“In India, 21 major cities are expected to run out of ground water by 2020. That’s just around the corner,” Hanke told Kitco News.
The economics professor’s comments come as Chennai, a large metropolitan center in southern India, facing a water deficit of at least 200 million litres according to reports, had to delivery around 2.5 million liters of water into the city via train on Friday.
India is not the only country facing water crises, according to Hanke, as China, Iran, Turkey, South Africa, and even the U.K. are experiencing water shortages in large urban areas.
“All these urban areas are hit with water problems because they have huge population increases and the investments in water facilities lag way behind the population increases,” he said.
Hanke said that the root of the issue can be traced back to simple supply and demand fundamentals.
“The ultimate problem, the reason you have shortages is because the price is too low. They’re either giving water away or pricing t way below the marginal cost and if you do that, like any other good if you have a price that is too low, you’re going to end up with a shortage of whatever it is,” he said.