Complication and Implication of Virtual Water- I

Water – Huge Number of Characteristics – Important Economic Good

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Water, though not a normal economic good has a huge number of characteristics which distinguishes it from the other goods and these characteristic individually may not be important but its combination makes water an important economic good.`Virtual water’ term was first used in the context of water scarce in Middle Eastern and Northern African countries that imported huge quantity of their food and thereby reduced substantially the demand of water in domestic food production as well as compensated for lack of water.

Importing food was virtually equal to trading water for these countries. Allan (1966) termed water - embodied in food import as virtual water. The terminology as well as the scope of virtual water over the years is extended beyond the original purpose. Presently the definition accepted on virtual water is the water requirement for production of commodities and since food production in several countries is by the largest water user, topics on virtual water problems have been targeted primarily on food commodities.

Virtual water is politically silent and economically invisible (Allan 2003a) and in the past, this has made it possible for water scarce countries to manage with water deficit through food import without a policy discourse of national water scarcity.

Debates – Usefulness of Concept/Feasibility to Import Virtual Water

The term virtual water came into focus in mid 1990s and since then has drawn growing awareness among policy makers, general public and scientific communities. It has become a topic which is discussed recurrently at several international conferences as well as meetings, especially the World Water Forum organized by the World Water Council as well as the Stockholm World Water Week which is an annual event and convened by the Stockholm International Water Institute.

Relevant issues publications have been rapidly on the rise in the international journals. There have been intense debates on the usefulness of the concept as well as the feasibility to import virtual water to reduce local scarcity of water. More than a decade of efforts have been made in virtual water studies and it is time now for a critical review to be done on relevance of virtual water concept in heightening our understanding of real water resources management.

Water – Limiting Factor/Significant Impact

Water is now becoming an increasing limiting factor for sustainable growth and development of economy in many countries, its allocation having a significant impact on the whole economic efficiency especially the mounting physical scarcity in some regions. Need for huge water supply tends to increase the vulnerability in the affected areas.

Moreover, water has also become a strategic resource which involves disputes among those who tend to be affected differently by various policies. Some papers tend to analyse various policy interventions focused at improving water allocation decisions with a novel approach which could incorporate macro as well as micro level options in a unified analytical guidelines which could facilitate assessment of different linkages with other policies as well as their impacts in individual sectors and the wide economy.

Policy impacts comparison indicates the usefulness of the guidelines in information, which the policy makers could use to rank policy intervention as per the emphasis given on various policy objectives.