Economy and transport in the Nile Region

CONTENT

LIST OF FIGURES

1 AIM AND METHODOLOGY

2 INTRODUCTION

3 CHARACTERISTICS OF THE ECONOMY IN THE NILE BASIN
3.1 Overall economic characterises of the Nile region
3.2 The special role of downtream Egypt and the Sudan
3.3 The uptream countries - rich waters and poor economies
3.4 The correlation between water and economy

4 TRANSPORT INFRASTRUCTURE IN THE NILE BASIN
4.1 General condition of transport infrastructure
4.2 Infrastructural advantages in downstream countries
4.3 Worsening transport infrastructure in upstream countries

5 CONCLUSION AND OUTLOOK

REFERENCES

LIST OF FIGURES

Figure 1: The Nile Basin

Figure 2: GDP per capita in the Nile region in 2008

Figure 3: Economic data of the Nile watershed region

Figure 4: Development of FDI net inflows in the Nile region 1970-2008

Figure 5: water equivalent as percentage of water availability

Figure 7: Railway system of Egypt and railway and road network of the Sudan

Figure 8: Human nature interaction system in economy and infrastructure

1 Aim and methodology

The aim of this paper is to analyze the economies and transport infrastructure of the countries in the Nile Basin. I will take into account latest economic data from the World Bank in conjunction with reflecting relevant literature. I will to take a closer look at the economies and the transport infrastructure of the Nile riparians. This way I want to point out the differences and certain characterisitcs of the Nile riparian states in regards to their economic condition and infrastructural situation. In order to integrate this topic into the wider scope of human nature interaction I will take into account the interplay of the economic factors with other aspects. I will take a broad perspective considering aspects of politics and social development as well as historic developments and future prospects. In doing so I want to figure out, which economic and infrastructural role the Nile waterways play and how the river actually interlinks the national economies, making them dependant on each other.

2 Introduction

Since ancient times waterways were of extraordinary importance for human civilization. Early civilization settled and developed close to waterways and in adjacent valleys that provided water and fertile soil for agricultural development. The availability of water is directly linked to the fate of a civilization. Rivers provide water for drinking, for food production, for energy and for transport. Consequently waterways have always been a central element of the economic environment and a factor of strength (Grey and Sadoff, 2002). The Nile River has eversince been of strategic and economic interest for many actors, for example in times of colonial control.

The Nile River and its water shed is shared by ten countries, namely Burundi and Rwanda, where the river has its source and Tanzania, Kenya, Uganda, the Democaratic Republic of Congo, Eritrea, Ethiopia, Sudan and Egypt, where the Nile flows to the Mediterranean Sea (see Figure 1). All these countries differ in their political and economic situation and they all do play a different role in the Nile region. They act from different political backgrounds and heritages and have different prerequisites in terms of natural resources. Nevertheless they do share the Nile as a major resource for water.

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Figure 1: The Nile Basin

Source: www.africanwater.org/nile.htm

Today the Nile Basin is home to about one third of whole of Africa’s population (Varis, 2000). This can broadly be explained by the significant importance of the Nile River for human development and for the capacity of the waterways to support the lives of so many people. The Nile basin is among the most critical regions of the world in terms of water resources (Varis, 2000). This makes the region extremely vulnerable to changes of the natural and environmental condition of the waterways. With the first effects of climate change in being noticed, the states in the Nile region face increasing challenges in terms of drought, environmental degradation, food security and socioeconomic development.

3 Characteristics of the economy in the Nile Basin

3.1 Overall economic characterisics of the Nile region

The economy in the Nile Basin is all in all quiet weak. The combined GDP of all Nile riparians was about 336 billion US$ in 2008. That is roughly the size of Denmarks economy, but with about 200 times the land area and 73 times its population (World Bank, 2010).

The latest World Bank data reaveals that the countries within the Nile Basin show highly variable economic performance and conditions and are very unequal in terms of economical capacity. Interestingly it looks like their overall economic capacity is not directly linked to the natural availability of water. Following the countries from downstream to upstream (from the Mediterrenan to the source of the river) one can see a clear decline in economic performance shown by the GDP data (see Figures 2 and 3). While the upstream riparians have the major share of the water supply and an abundant supply of rainfall, their economical condition is generally poor and they do not have either the economic, institutional and technical capacity to utilise their Nile waters appropriately (Allan, 1999). On the other hand the relative economically strong downstream states are mostly arid and depend completely on Nile water. So the countries with the most economic power are in general more waterscarce than the economically weak ones. Furthermore the economically weak states of the region have some of the highest poverty rates in the world (El-Battahani and El-Tom Hamad, 2005; Tesfaye, 2008). Four of the worldwide five countries afflicted by hunger in 2007 the most were located within the Nile Basin, namely Burundi, the Democratic Republic of Congo, Eritrea and Ethiopia (Welthungerhilfe, 2007). With the exception of Egypt and Kenya all of the Nile riparians are among the category of the 47 least developed countries world-wide (Mason, 2004).

The population of the Nile Basin countries has grown steadiliy and continues to do so. This means an increasing need of water for human consumption and economic activity in the future (Whittington and McClelland, 1992). Furthermore a plus of population means a growing need for food and thus more agricultural efforts to feed these people. '

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Figure 2: GDP per capita in the Nile region in 2008

Soure: own map based on World Bank, 2010

Water is a key resource for economy as well as for civilization itself. It is needed for nutrition, agriculture, livestock farming, energy generation, fishery and transport (Tesfaye, 2008]. Taking a closer look at recent World Bank data (see Figure 3) reveals the general tendency that the Nile riparians share of agriculture in GDP grows with the natural availability of water. On the other hand it is easy to see, that the more upstream a country is, the less industry it has.

Having been under Sovjet influence many of the Nile region’s countries share a socialist history, leaving them more or less left behind in the world economy with an economical burden. The complex ethnic composition in sub-Saharan Africa and borders mostly drawn by colonial rule further worsens the fundament for economic success.

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Figure 3: Economic data of the Nile watershed region Source: own table based on World Bank, 2010

The closer consideration of the national economies of the region will explain their dependency on the Nile waters. Nevertheless it should be mentionend that the available data has its limits. Firstly data is not easy to collect in unstable states and is often fractional. Secondly it is not capable of capturing the informal sector, such as informal trade or industry. This sector also relies on water resources from the Nile and does not occur in any of the statistics. One can assume that this informal sector is fairly significant in the less developed countries. So to a certain extend the economic importance of the Nile waters cannot be assessed accurately.

3.2 The special role of downtream Egypt and the Sudan

Within the Nile region Egypt and the Sudan play a special role. Nevertheless Egypt can be seen as an extraordinary economic and political power. Compared to the other countries it is the politicaly most stable one, which is generally reflected in the relative superior economic performance and level of development (Varis, 2000).

Egypt always received significantly more foreign direct investment (FDI) than any other country in the region (see Figure 4). This is largely due to its strategic location and importance, which attract investment from countries with political and economic interests and their oil resources, which are mainly exported to Europe via a pipeline from the Sinai pensinsula to the Mediterranean. Two major economic reforms in the 70s and in the 90s liberalized the market and opened it for foreign investments.

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