The water crisis that still affects the metropolitan area of Uruguay —despite the recent increase in reserves in Severino Pass, that allow the supply of drinking water to be maintained for a longer time—has had a fiscal impact of 50 million dollarsaccording to the estimations of the Ministry of Economy and Finance (MEF). If we add to this the consequences in other productive areas of the country, the economic effect is even greater —and may continue to increase.
The negative effects of the water crisis, which became water emergency, are not exactly a surprise to anyone, although the figures that are beginning to be known in relation to the economic impact are the greatest novelty. In this sense, the director of Economic policy of the MEF, Marcela Bension, He maintained in dialogue with the weekly Búsqueda that, up to now, the critical scenario of water deficit has generated a fiscal impact of 50 million dollars for the government.
Likewise, the official highlighted that from the portfolio directed by lily arbeleche a figure close to 100 million dollars under the Water Emergency Fund, created to meet emergency expenses in the context of the crisis. Within this amount, direct measures are already contemplated, such as the exoneration of VAT and of the Internal Specific Tax (Imesi) to the sale of bottled water or the subsidy that more than 500,000 people receive for the purchase of two liters of water per day.
On these extraordinary expenses, the government requested to increase the debt ceiling, a request that it will argue today in Parliament.
Meanwhile, the reserves of Paso Severino have recovered a significant amount of water in recent days —at least, in relation to the critical numbers that it managed to handle and that alerted the metropolitan population to the near possibility of running out of drinking water in Montevideo and its surroundings.
Tourism and industry, other sectors hit by the lack of water
The economic impact in Uruguay due to the water crisis does not appear only in terms of lower collection or increased spending on emergency works, but also has repercussions on two key sectors for development: industrial production and tourism.
In the first case, the example of the Refrigerator Cannelloni is the most significant: in mid-June, the plant of the Brazilian group Minerva received an order from the National Administration of State Sanitary Works (OSE) to stop using its water —due to high consumption—, for which reason it had to stop all its activities and send 600 workers —almost the entire staff— to unemployment insurance.
However, the list of companies that have stopped production, or at least some of its lines, is much longer. This was confirmed by the president of the Chamber of Industries, Fernando Pache to scope.com in early July; and the main reason was the higher salinity in the water distributed by OSE, which affects the quality and final result of the products, especially in beverages and food.
Tourism, for its part, was also affected during the winter holidays, as the area’s minister himself acknowledged, Tabare Viera. According to the official, there were “some cancellations in some hotels Cologne carried out by Argentine tourists, as a result of what they considered a problematic situation in terms of water.
Viera attributed the situation to the “exaggerated” media coverage of the problem in the neighboring country, to which he added the president’s statements Alberto Fernandez, that last weekend he had commented that in Montevideo “they open the faucets and the water does not come out”.
According to the Minister of Tourism, “there are not a large number of reservations well in advance” and he specified that “they are around the 50% in Cologne”. In any case, he tried to reduce the drama by assuring that the winter rest “is not in high season, it is more for people who do internal tourism.”
Source: Ambito
