Tag Archives: water conflicts

Coke as a Scapegoat

Thamirabarani river, India. Image from wikipedia

A potent blend of pride, economic nationalism and mounting concern over water security have the world’s two biggest cola brands in a bind in southern India.  Shopkeepers in drought-hit Kerala state decided on March 15, 2017 to promote local brands over Coca-Cola Co. and PepsiCo Inc. beverages after counterparts in neighboring Tamil Nadu boycotted the multinational drinks. While retail groups claim the companies are siphoning off groundwater and selling products tainted with pesticides, academics and analysts say the soda giants have become scapegoats for a water crisis that’s become mired in politics and patriotism.

India is one of the most water-challenged nations, and fights over water have erupted between users periodically for decades. Failed monsoon rains over as many as the past three years in some states have parched rivers and dams, forcing farmers, manufacturers and municipal water suppliers to rely more on wells to meet their needs. Problem is, those too are drying up, and that’s hurting farmers, India’s economic mainstay.

“The root cause for the boycott isn’t the multinational companies, but the enduring fight between industrial users and farmers, especially in several drought-hit states,” said P.L. Beena, an associate professor with the Centre for Development Studies in Thiruvananthapuram, Kerala.
On top of that, Prime Minister Narendra Modi’s call to companies to “make in India” has given rise to a pro-India push — and, in some cases, an anti-foreigner backlash — that’s supporting local brands….

The latest action means drinks from Coca-Cola and PepsiCo, which together have a 96 percent hold on India’s $4.9 billion soda market, will be kept off the shelves of more than 1 million shops.  Vendors would rather lose business than sell the products, said A. M. Vikrama Raja, president of a retailers’ association in Tamil Nadu with about 1.5 million members. The boycott started March 1, 2017 a day before the Madras High Court dismissed a petition seeking a ban on the American soda-makers drawing water from the local Thamirabarani river.

“Instead of foreign sodas, we will promote local beverages,” said T. Naseeruddin, president of a retailers’ group that says it has more than 700,000 retailers in Kerala, which is facing its worst drought in 115 years.

The group stopped short of joining the boycott in Tamil Nadu after a meeting Wednesday with Kerala Chief Minister Pinarayi Vijayan, a spokesman said. Instead, retailers will pursue “sensitization against multinational products” via a state-level conference, and seek a policy response from the state government.  India has at least 50 local drink brands, which are typically 20 percent cheaper than the global cola brands, brokerage Kotak Securities Ltd. said in a Feb. 23 report.  Manpasand Beverages Ltd., based in Vadodara, Gujarat state’s cultural capital, is “aggressively expanding its reach in Tamil Nadu to take advantage of the ongoing cola ban,”….

Excerpts from PepsiCo, Coca-Cola Fight Patriotism in Parched Indian State, Bloomberg Business Week, Mar. 15, 2017

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Damning the Nile, the winners and losers

white and blue nile. image from wikipedia

Egyptian politicians discussed sabotaging the Grand Ethiopian Renaissance Dam in 2013, they naturally assumed it was a private meeting. But amid all the scheming, and with a big chuckle, Muhammad Morsi, then president, informed his colleagues that their discussion was being broadcast live on a state-owned television channel.

Embarrassment apart, it was already no secret that Egypt wanted to stop the largest hydroelectric project in Africa. When Ethiopia completes construction of the dam in 2017, it will stand 170 metres tall (550 feet) and 1.8km (1.1 miles) wide. Its reservoir will be able to hold more than the volume of the entire Blue Nile, the tributary on which it sits. And it will produce 6,000 megawatts of electricity, more than double Ethiopia’s current measly output, which leaves three out of four people in the dark…

This boon for Ethiopia is the bane of Egypt, which for millennia has seen the Nile as a lifeline snaking across its vast desert. The river still provides nearly all of Egypt’s water. Egypt claims two-thirds of that flow based on a treaty it signed with Sudan in 1959. But even that is no longer enough to satisfy the growing population and sustain thirsty crops. Annual water supply per person has fallen by well over half since 1970. The UN warns of a looming crisis. Officials in Egypt, while loth to fix leaky pipes, moan that the dam will leave them high and dry.,,

Only recently has the Egyptian government adopted a more conciliatory tone. In March of last year Abdel-Fattah al-Sisi, who ousted Mr Morsi in a coup, joined Hailemariam Desalegn, Ethiopia’s prime minister, and Omar al-Bashir, Sudan’s president, to sign a declaration that tacitly blesses construction of the dam so long as there is no “significant harm” to downstream countries. The agreement was affirmed in December. 2015, when the three countries settled on two French firms to study the dam’s potential impact. The impact studies were meant to be completed last year, but bickering over the division of labour, and the withdrawal of one firm, caused delays. Many Egyptians believe that Ethiopia is stalling so that the dam becomes a fait accompli. Already half-finished, experts worry that it may be too late to correct any problems. Representatives of the three countries are now meeting to discuss “technical” issues. The contracts for studying the dam are not yet signed.

A sense of mistrust hangs over the dam’s ultimate use. Ethiopia insists that it will produce only power and that the water pushing its turbines (less some evaporation during storage) will ultimately come out the other side. But Egypt fears it will also be used for irrigation, cutting downstream supply.  …A more reasonable concern is over the dam’s large reservoir. If filled too quickly, it would for a time significantly reduce Egypt’s water supply and affect the electricity-generating capacity of its own Aswan Dam. But the Ethiopian government faces pressure to see a quick return on its investment. The project, which is mostly self-funded, costs $4.8 billion….

A potential wild card in the negotiations is Sudan, which long sided with Egypt in opposition to the dam, some 20km from its border. But as the potential benefits to Sudan have become clear, it has backed Ethiopia…Short on energy itself, Sudan will receive some of the power produced by the dam. By stabilising the Nile’s flow, it will also allow Sudan to prevent flooding, consume more water and increase agricultural output (once old farming methods are updated). Currently much of the country’s allocation of water under the 1959 treaty is actually consumed by Egyptians…

The Renaissance Dam is merely the latest test of countries’ willingness to share water. There may soon be more difficulties. Ethiopia plans to build other dams on the river, which could further affect downstream supply. Sudan has promised foreign investors an abundance of water for irrigation…

Sharing the Nile, Economist, January 16, 2016, at 49