ISLAMABAD: More than 70 percent of the population in Pakistan is exposed to unsafe drinking water, says Moody’s Investor Services (Moody’s).
Moody’s in its latest report “Environmental, Social and Governance (ESG) factors for sovereigns” stated that Bangladesh, Pakistan (B3 stable), and India all have “very highly negative” exposure to water risk because the possibility that their governments will be unable to provide access to safe water to their populations at all times poses material credit risks.
India drains a significant proportion of its scarce fresh water resources every year, leaving the population and economy reliant on monsoons that climate change is likely to make more irregular.
As a result, severe droughts regularly cause significant social and economic distress.
Moreover, half the population is exposed to unsafe drinking water; in Bangladesh and Pakistan it is more than 70 percent of the population.
Without reliable access to water for agriculture and industry, and particularly access to safe water for the population, economic growth will be stunted, and social risks will increase, Moody’s added.
The report further stated that the overall credit impact of the ESG is most often negative, with moderately or highly negative environmental and social risks, frequently combined with weak governance strength.
The ESG factors commonly have a negative overall impact on sovereign credit quality, particularly in emerging markets, Moody’s added.
Copyright Business Recorder, 2021