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Why poor water management is bad economics

Written by Mariana Matoso, Julian Doczi


There are 85 million of us moving to cities worldwide every year. And why wouldn’t we? Cities worldwide currently generate approximately 80% of GDP – it’s not surprising that many of us will go to great lengths to claim a piece of this growth.

However, with the surge of people outpacing the amount of land available, this can mean a life in rough or vulnerable parts of town.

When some newly arrived, poor migrants to Magonine Bairro in Maputo, Mozambique, bought their houses back in 2007, no one told them that they had invested their hard-earned life savings in a few square meters of pure floodplain.

Eight years on, they watched hopeless as their lives were washed away. Most relocated to the surrounding sandy hills, resuming life living in shacks at the bottom of the poverty ladder. 

With more than 860 million people currently living in flood-prone urban areas worldwide, this is an increasingly common story. On top of the obvious human cost, large flood events can also reduce a city’s economic activity by as much as 8%.

This World Water Day, we investigated how floods hurt people’s jobs and livelihoods in cities and how governments responded.

In Maputo, poor people displaced by floods receive little support 

Mozambique’s capital, Maputo, remains attractive to economic migrants and is growing by 1.5% per year. However, the increasing cost of properties in the city centre led informal settlements to expand into flood-prone areas.

Today, 82,000 people and 7% of all the city’s assets are at high risk of heavy rains and sea level rise, with marginalised areas and economic hubs (e.g. port and coastal real estate developments) being the most affected.

Climate-related disasters, like the cyclone Eline in 2000, are likely to happen again. Despite the economic vibrancy of the city (Maputo contributes 19-20% of Mozambique’s GDP), very little has been allocated to improving flood management and disaster risk reduction.

Hotels, restaurants and fancy apartment blocks continue to be built by the coast; the government’s attempts of land zoning are failing; and there is more and more building in flood-prone areas – especially within the informal settlements.

These ariel photographs show the urbanisation of marshland areas in Magoanine, Maputo, since cyclone Eline. The first is from 2000; the second from 2016. (Source: Google Earth)

Since 2010, over 30,000 people have been affected in these areas by flooding alone. Central government responded with a resettlement programme, but due to lack of funding it has failed to provide much solace.

Compensation for flooded infrastructure was never part of the package, but until 2011, resettlement at least included free land provision and fully-built homes away from flooded areas. Not anymore.

Nowadays, families have to build their new homes with material costs subsidised by the government. Situated in districts where job prospects are limited and basic service provision is poor, these programmes risk locking people into lives of poverty.

Local government in Cagayan de Oro ignored warnings of typhoon risk

Meanwhile in the Philippines, Cagayan de Oro illustrates yet another example of the disastrous impact of poor water management.

Having doubled in size since 1990, increasing land prices forced migrants to settle on marginal and vulnerable land along the large river that flows through the centre of the city.

Local academics knew this river was prone to major floods during typhoons and tried warning the local government. Instead, the municipality leased more of this vulnerable land to the city’s low-income residents at a very low cost.

In 2011, Tropical Storm Sendong (Washi) hit the city and its inhabitants woke up to 20,000 homes destroyed, 674 deaths and $40 million worth of damages – most of which occurred in those informal settlements across the riverbanks.

The city’s lower-income settlers now living in ‘no build zones’ were moved to relocation settlements in remote, upland areas. Despite government support, rebuilding their livelihoods turned out to be harder than expected. Many had to quit their former jobs in the city, as they could no longer afford the travel costs.

Having falling deeper into poverty, they now say: ‘safe na kami dito, pero mamatay sa gutom’ (we’re safe [from floods] now here, but are dying of hunger).

Better water management not only helps flood victims rebuild; it also supports economic recovery

Humanitarian aid helps flood victims recover and rebuild after the disaster, but without a concerted effort to help them rebuild livelihoods, the longer-term impacts can be devastating – not only for the individuals, but also for the economy.

Governments must do more to improve water management and ensure that the people who migrate to cities in search of jobs and opportunities don’t end up poorer and more vulnerable than when they first arrived.

This blog is an output of the DFID-funded project Understanding Patterns of Climate Resilient Economic Development, in collaboration with Vivid Economics, to identify how sectoral and geographic economic development affects climate resilience in urban areas of Mozambique and Philippines