Drought of The Century Threatens To Dry Up Brazilian Economy

Brazil's worst drought in 86 years is threatening the country's already struggling economy. With water rationing already in effect and electricity rationing on the horizon, Brazil's manufacturing sector could be in store for a historic slowdown. 


Brazil’s Drought-stricken History

Beginning in the spring of 1876, El Grande Seca—"the Great Drought”—wreaked havoc on the fledgling country of Brazil. The region had experienced dry spells and droughts in the past, but the damage brought by El Grande Seca would prove to outdo all of its predecessors. The drought lasted a full two years until the winter of 1878, and would all but decimate the country’s cattle supported economy, instigate mass migrations out of drought-plagued areas, and ultimately cost an estimated 200,000 lives. In response to this massive loss of financial and population loss, Brazil’s national drought response and mitigation programs were incepted, marked by the construction of the country’s first reservoir, or açude in 1886.  To this day, El Grande Seca is considered one of the most costly natural disasters in the history of the western hemisphere.

Now, despite more than a century of drought mitigation, preparedness, and planning efforts, Brazil’s economy is threatened by another potentially catastrophic drought. Reservoirs—like those first constructed in response to The Great Drought—are operating at historically low levels. The Alto Tietê reservoir system, which provides water to Sao Paulo, is operating at 15% of total capacity, while the Cantareira reservoir system that services another 9 million people is only 5% full.  In total, over 200 million people have been severely affected directly by the drought so far.  17% of all towns in Brazil have declared a state of emergency. The current drought is the country’s worst in almost a century, and its economic consequences are beginning to rival the losses seen during The Great Drought of 1877. Some reports place the country on the brink of recession. Apart from sky-high interest rates and increased taxation over credit, the shortage of rainfall is exacerbating the nation’s economic woes.

Industry under Water Shortage

Sao Paulo, once called the Cidade da Garoa—or “city of drizzle”—is at the center of this historic drought. Government authorities say water rationing looks inevitable for the 20 million residents of the city, as well as those in Rio de Janeiro and Belo Horizonte. Electricity rationing is also being proposed for the first time since 2001. This as a result of the water supply deficiency reducing hydroelectric power output dramatically. 60% of all energy produced in Brazil is hydroelectric. After experiencing blackout in ten states in the past week, the country has begun importing energy from Argentina.



30% of consumable water is lost through leakages





The Federation of São Paulo State Industries (FIESP), the state’s industry association, stated that some companies in the southeast voluntarily cut water usage and instead use truck water to keep stable operations. FIESP’s Anicia Pio stated, “no industry in these areas are allowed to expand their activity if that means increasing water consumption.”

Santiago Chamorro, president of General Motors Brasil, is looking into bringing water via trucks for its plants in São Paulo. “We are preparing for the worst and hoping for the best,” Mr Chamorro stated.

Marcos Sorrentino, a professor of education and environmental policy at the University of São Paulo, says that “Agriculture and industry, the biggest consumers, are only being mobilized now to commit to reducing consumption. The authorities know exactly what's needed," says Mauricio. "They have to invest in basic infrastructure because without water, there are companies here who won't be able to produce anything."

Water Scarcity in the Future

The water scarcity could have been prevented. Brazil has the world’s largest supply of fresh water, but Sao Paulo’s water has been awfully mishandled. Around 30% of consumable water is lost through leakages in the system, while only 30% of wastewater is treated. Experts have been warning about looming water shortages for years, yet no politician has wanted to make the tough decisions to deal with the problem. José Marengo, researcher at the National Center for Monitoring and Alerts Natural Disasters, says “Only with good water management and public policies, the impacts could be dampened in the future.”

Sao Paulo Governor Geraldo Alckmin recently declared eight infrastructure projects to try to address the problem caused by the drought. The scientific community is hoping to work with public authorities to develop emergency action plans and future solutions to adapt to changing rainfall patterns. Last February, rectors of six universities in São Paulo initiated the creation of a task force to help the community overcome the water crisis. This week in Rio de Janeiro, a group of renowned scientists from the Brazilian Academy of Sciences (ABC) launched a public report with ten recommendations.  

Unfortunately, the creation of those mitigation plans may not come soon enough.

According to Professor Semensatto, professor of ecology and environmental sciences at the Federal University of São Paulo, water stress is likely to last in São Paulo for four to five years, threatening not only the city's economy, but the rest of the country.


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