Enhancing agricultural and industrial productivity through freshwater withdrawals and management: implications for the BRICS countries

Abstract

This paper analysed the effect of freshwater withdrawals and management on agricultural and industrial sectors productivity in the emerging market economies. The auto-regressive distributed lag model and the panel analyses were employed in our estimations. Our result revealed that Brazil had better water use efficiency in agricultural production with annual withdrawals which contribute significantly and positively to the increase in crop and livestock index. In contrast, annual withdrawals for agriculture were considered to be least efficient in Russia, followed by China and India, although, in South Africa, the result suggested an insignificant positive effect in the incremental index. Furthermore, our analysis revealed that freshwater withdrawals have a significant positive impact on industrial outputs in South Africa. Similarly, water withdrawals were positively related to industrial sector productivity in China and Russia. Brazil and India appear to be the least efficient countries where withdrawals impacted negatively (and significantly for Brazil) on industrial sector outputs. Our panel analyses showed that freshwater withdrawals were positively associated with crop and livestock production index and industrial outputs in the BRICS economies. However, the magnitude of the impacts was only significant for the industrial sector. Moreover, investments and private participation in water and sanitation projects impacted significantly and positively in productivity in both sectors.