Economist have long defined “demand-pull inflation” as “too much money chasing too few goods,” but what do you call “too many people chasing too few resources?”
How about “demand-pull destruction?” When world population and rising consumption put impossible demands on the planet’s resources, destruction inevitably follows. If you’re not clear on what I mean by that, let me provide you with two current examples.
Let’s start with the BP oil spill. For years to come, politicians and lawyers will be debating who is proximately responsible for the spill, but ultimately it comes down to “too many people chasing too few resources.” In this case, oil. As the global demand for oil surges and global production stagnates, oil companies are drilling for oil in ever more hazardous and difficult conditions. It’s no coincidence that the largest new oil find in recent years is in the deep waters off Brazil, or that oil companies are actively assessing the potential for oil at the bottom of the Arctic Ocean. All the easy oil has been found, and satisfying our insatiable appetite for oil will inevitably lead us to take greater and greater risks, particularly as we are adding another billion people to the planet every dozen or so years.
But oil is not the only current and destructive manifestation of “too many people chasing too few resources.” The rioting in Kyrgyzstan may be another example. Again, people will long debate who’s responsible for the current fighting between Uzbek and Kyrgyz. Some believe that former Kyrgyz President Kurmanbek Bakiyev provoked the riots to destabilize the country before an upcoming referendum. Others blame the current government, citing widespread corruption and alleged abuse.
But various analysts report that the recent rioting is over land. In 1990, Kyrgyzstan was racked by rioting that killed over 300 Kyrgyz and Uzbeks in Osh. The rioting started when the Kyrgyz-dominated Osh City Council announced plans to build a cotton processing plant on land under the control of an Uzbek-collective farm.
This time around, CNN reports that:
…many Kyrgyz in the south fear the Uzbeks, who make up around 15 percent of the country’s 5.5 million population, will swallow up more land, particularly in the fertile plain known as the Fergana Valley, which straddles Kyrgyzstan, Uzbekistan and Tajikistan — all former Soviet republics.
Water, however, is a much bigger threat to the peace of Central Asia. Decades ago, the former Soviet Union famously diverted the region’s two major rivers–Amu Darya and Syr Darya–to expand cotton production in the region. The diversion of water for cotton irrigation, however, also contributed to the draining of the world’s fourth largest lake, the Aral Sea, and chronic water shortages for many farmers in the region. Since then, water scarcity has emerged as a major source of tension in much of Central Asia.
Kyrgyzstan consumes about one fifth of the total water resources originating on its territory. That means 80 percent of its water flows to other countries in the region, including Tajikistan, Uzbekistan and Kazakhstan. But Kyrgyzstan has an unmet and growing demand for electricity, and most of its electricity is hydroelectric. When it needs more electricity it discharges more water from its reservoirs, but that means less water is available later in the year to downstream countries that want that water for irrigation.
In a major speech delivered earlier this week, Ms. Kori Udoviиki, United Nations Assistant Secretary General, spoke to this issue:
Water is obviously at the core of the world’s energy, food security, and broader human security concerns. Effectively addressing these issues globally and in Central Asia would resolve a great part, and perhaps the most difficult part, of the sustainable development agenda. In Central Asia the livelihoods of some 22 million people—nearly half the region’s population—depend directly or indirectly on irrigated agriculture. Hydro power accounts for more than 90% of the electricity generated in Tajikistan and Kyrgyzstan. Central Asia’s mountains contain some of the world’s largest glaciers, which provide downstream countries with water year round, especially for agriculture.
Experts, however, are worried that when global warming melts those glaciers the amount of water available for irrigation and hydroelectric power in the region will shrink dramatically. Population, however, will not. The populations of both Kyrgyzstan and Uzbekistan are expected to increase by 50 percent over the next 40 years. Tajikistan’s population is expected to grow by more than 80 percent.
Thus far, disputes over water have not led to conflict between these former Soviet Republics, but security experts warn that it’s only a matter of time, unless something radical is done to boost water conservation in the region. It’s another instance of “too many people chasing too few resources.” In this case, water.
But the Gulf of Mexico and Central Asia are not the only areas in the world where our insatiable appetite for resources is leading to destruction in one form or another. Look at what deforestation is doing to the Amazon or overfishing to the world’s oceans. Look at the fighting that is still raging in the Sudan or the earlier genocide in Rwanda. It’s almost always a case of too many people chasing too few resources.
And it’s only going to get worse. Over the next 20 years, the demand for food and energy will rise by 40-50 percent, while the demand for water will grow by close to 30 percent. And we will try to satisfy those rising demands despite the obstacles posed by climate change and resource scarcity. John Beddington, England’s Chief Scientific Advisor, last year called these trends a “perfect storm” and warned that it could be terribly destabilizing for the world.
It already is.
Posted by Robert J. Walker, Executive Vice President