How has water scarcity impacted location allowances?

The UN Climate Change Conference (COP28) is underway in Dubai, and global water security is high on the agenda. As ECA’s newly-released Location Ratings scores demonstrate, water shortages – whether natural or man-made – can impact all regions of the world and influence a surprisingly wide spectrum of hardship categories. Location allowances for Natural Hazards, Health Risks, Utilities, Air Pollution and even Socio-Political Tensions have all been directly or indirectly impacted by droughts and water scarcity in the past year.

Utilities

ECA's annual Location Ratings Survey gathers insights from a large number of expatriates on international assignment. Issues relating to domestic water supply stand out as a prevalent theme in the survey responses. In well-developed countries, expat concerns can be comparatively minor, and do not typically result in a higher location allowance. For instance, tap water may have a disagreeable taste due to chlorination or calcination, or summer hosepipe bans may make it difficult to wash cars or fill swimming pools.

Conversely, in remote or underdeveloped locations, the challenges reported by assignees are often more severe. Various sources of pollution may render mains water entirely unsafe for drinking. Potential contaminants identified by survey respondents include pesticides and fertiliser runoff from agriculture, microbes from sewage and heavy metals like lead, arsenic or mercury from mining operations. In such conditions, even basic tasks such as washing vegetables or brushing teeth may require substantial behavioural adjustments. To safeguard their physical wellbeing, expats may find it necessary to meticulously boil or filter water, practise careful handwashing or exclusively rely on bottled water. Many of our locations in the developing world incur a score penalty in recognition of the local sanitation risks.

While global access to clean water is generally improving, certain regions present notable exceptions. In South Africa, the water infrastructure has decayed and the supply has deteriorated due to years of neglect, mismanagement and corruption. Delivery problems are exacerbated by scheduled electricity rationing, known as ‘load-shedding’, which leaves pumping stations and treatment facilities inoperable. Even in affluent neighbourhoods in Johannesburg or Pretoria, expats report that taps can run dry for prolonged periods. Similarly, ‘water bankruptcy’ triggered renewed protests in some parts of Iran this year. Factors such as extreme heat, population growth, over-extraction and misallocation have placed severe strain on the country’s groundwater and reservoir sources, including those in the capital. Our Utilities scores increased this year in Tehran and in all five of our South African locations, attributable in large part to escalating water scarcity, intermittent outages, and the concurrent impacts on hydropower generation.

Natural Phenomena

Droughts can amplify the risks from several natural phenomena. Extended periods of low rainfall create tinderbox conditions as dry vegetation becomes highly flammable. The accumulation of dried underbrush, branches and other biomass becomes ideal kindling for intense and destructive wildfires. Combatting these fires becomes even more challenging during droughts due to limited surface or hydrant water, resulting in even greater damage. Precisely such a scenario unfolded in Hawaii in August, when a devastating fire claimed the lives of one hundred people and destroyed the town of Lahaina.

Wildfires also made prominent headlines this year in Greece, Chile, Spain, Algeria and the continental USA. However, by far the most extensive fires occurred in northern Canada, where an unprecedented 18.5 million hectares of boreal forest were consumed during an unusually long burning season. To put this remarkable number in perspective, it is equivalent to an area greater than 75% of the entire United Kingdom.

The Canadian wildfires released a record-breaking volume of carbon into the atmosphere – around 400 million tonnes, according to Copernicus satellite monitoring. Smoke travelled vast distances and caused unprecedented haze and elevated Air Quality Index (AQI) figures in northeastern US cities. New York City residents awoke in June to orange skies and an acrid smell, prompting many to dig out their old face masks. Despite the temporary AQI spike, our air pollution scores for New York remained unaltered. Our assessment already considers that New York experiences some level of year-round air pollution – scores are set according to longer-term patterns and trends rather than isolated, short-term events.

Drought conditions can lead to air pollution, even without the occurrence of wildfires. Following years of desertification, the wetland ecosystems of western Afghanistan have transformed from lakes and marshland into desolate dustpans and salt flats. Windblown dust from the area now frequently blankets the south of the country. Consequently, the air-borne pollution scores for our locations in Helmand and Kandahar provinces increased this year, reflecting the increased environmental hardships for assignees stationed in these areas.

Socio-Political Tensions

In addition to the impacts from fires or pollution, the societal costs of drought can be enormous. Four years of failed rains in the Horn of Africa have triggered the most severe drought for a generation and pushed millions into food insecurity and even famine. Expatriates in drought zones may not face direct health threats from thirst, hunger or malnutrition, nor the forced displacements affecting locals. However, they are not immune to the broader social, economic and political repercussions.

Water scarcity is increasingly recognised as a catalyst for global conflict and instances of water-related violence have surged in recent years. Diminishing water resources were an instrumental cause of the Darfur war in 2003, when clashes between nomadic Arab herders and sedentary African agriculturalists flared throughout western Sudan. Fomented by the government, the crisis ultimately culminated in genocidal violence enacted by the Janjaweed militia. Violent turmoil resurfaced in the country in April of this year. Niger and Gabon both saw military coups in 2023 (continuing a trend observed elsewhere in Africa in the last three years) causing score increases in the Governance and Socio-Political Tensions categories. However, the scores for Khartoum increased more steeply and across a broader range of indicators, as open warfare disrupted even the fundamental aspects of daily life. From the very outset of the fighting between the rival SAF and RSF factions, the capital’s vital infrastructure, including its water supplies, was deliberately targeted and severely disrupted. Residents resorted to drawing water from the Nile, risking bilharzia and other diseases. Some expatriates based in Niger, Gabon and Sudan will see increases in their location allowances resulting from this year’s instability. 

'Hydraulic warfare' violates international humanitarian law, which mandates the protection of civilian water infrastructure. Despite this prohibition, observers of the war in Ukraine documented dozens of Russian drone and missile attacks on water treatment plants and delivery systems. Even water itself became a weapon during the survey period. In June, the Kakhovka Dam in southern Ukraine was destroyed, almost certainly by Russian forces. The resulting flood inundated hundreds of square kilometres and drowned scores of civilians. These events contributed to the Utilities and Socio-Political Tensions scores for Kyiv being maintained at the maximum level.

Construction rather than destruction of water infrastructure can also raise political tensions. In September, Ethiopia announced the successful filling of its Grand Renaissance Dam on the Blue Nile, a colossal $5bn project. The development riled Egypt and Sudan, who worried about downstream effects on water security and agricultural output. Nonetheless, once the dam is operational, it holds the promise of not only resolving Ethiopia’s acute electricity shortages but also generating a surplus for export to its neighbours. Inadequate electricity supplies play a significant role in the region's high Utilities scores, but such ambitious developments may potentially result in reduced scores and location allowances in the future.

Outlook

Despite alarming headlines of droughts and depleted aquifers, there are grounds for optimism. Significant strides have been made in the global provision of water, sanitation and hygiene, although progress has been uneven across different regions. Presently, three-quarters of the world’s population has access to safely-managed drinking water, yet over two billion people still lack this basic right. While it is highly improbable that the UN Sustainable Development Goal of achieving clean water and sanitation for all by 2030 will be realised, COP28 aims to prioritise water concerns and expedite progress. Formidable challenges persist in numerous countries, but innovative practical solutions are in development, including solar pumps, graphene filtration membranes and smart distribution networks. Together with increased infrastructure investment and better water governance, new technologies have the potential to alleviate hardships for both locals and expatriates.

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