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Pastimes : Severe weather events, climate change and economics

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To: Sam who wrote (504)	4/2/2019 2:48:31 PM
From: Sam	of 566

Droughts in Argentina and South Africa highlight the economic importance of water Ongoing droughts taking place across the world serve as potent reminders of what happens when a country’s water supply is compromised Author: Fernando Moncada Rivera March 23, 2018 Argentina, the world’s largest exporter of soymeal, is suffering its worst drought in at least a decade. Meanwhile, on the other side of the world, South Africa has declared a national disaster as extreme drought ravages the Western Cape region. The effects of water scarcity on a country’s agricultural sector can send ripples across domestic economies, and are reflected in national economic indicators. In the case of a major agricultural exporter like Argentina, a drought can also reverberate across international markets as global commodity prices react to changes in production. According to Christopher Decker, a research fellow specialising in economics and law at the University of Oxford, the economic effects of drought can depend on a number of factors, including: how much of the country’s GDP is composed of water-intensive industries; the amount of stored water that can be tapped into in times of scarcity; and how water users adapt their behaviour in response to drought. The cases of Argentina and South Africa bring into sharp focus the need for policymakers to shield the economy from future droughts, particularly given the threat of a changing climate. Damaging Argentina’s cash crops Agriculture is a crucial pillar of Argentina’s economy. Soybean meal is Argentina’s top export, followed by corn, soybean oil and raw soybeans. Together they made up 38 percent of all exports from Argentina in 2016, making the economy particularly vulnerable to extreme weather. As a result of the current drought, the government’s budget forecast of 3.5 percent growth may actually be be significantly lower. continues at worldfinance.com

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