How Rivers Affect Our Economy
02 Dec 2019 | Gamuda Berhad

In an publication, Helen Parker and Naomi Oates report, “Rivers are essential to human well-being. However, many rivers around the world are severely degraded or at risk, which undermines their ability to provide critical ecosystem services and related benefits.” 

How Rivers Affect Our Economy

WWF believes that societies should understand the benefits derived from rivers and how improved river health has social, economic, and strategic advantages. 

On the surface, water-based tourism is more tangible when it comes to swimming, fishing, visiting the beach, lakes, and more. But water is also vital to more economic sectors. Here are some economic benefits potentially derived from rivers.


The irrigation of the significant agriculture sector depends a lot on the quality and quantity, and other ESS (ecosystem service) such as sediment flows and nutrient cycles are vital factors in the development of crop yields. 

An article on states that “Commercial irrigation can provide benefits in terms of employment, tax revenues and food security.”


The river is one of the oldest and cheapest modes of transportation. There are usually no huge investments required to construct or maintain the tracks used. Streams played an essential role in transportation before land transport became available. Water, in general, can be cost-effective, especially when moving bulk commodities. 

The cost of river transports contributes to the tax revenue. There are also licensed ferries and commercial carriers that increase the profit margins of the rivers as a mode of transportation. 


Rivers are essential to generate hydropower. In some countries, hydropower is one of the largest energy sources. Depending on the density of the country, hydropower revenue is dependent on the percentage of population that has access to electricity. 

Water is also necessary for other energy-based production such as raw materials extraction, cooling in thermal processes, cultivation of crops for biofuels, and more. 


Because of the massive consumption of water, water productivity, water tariffs, and water revenues are affected. Water is an essential input for the manufacturing sector that includes lubricating, dyeing, and cooling. The sustainable quality and quantity of water, as well as the right locations and the correct prices, is required when ensuring effective operations. That is why water treatments, both input and waste, plays an important role. 


Tourism accounts for over 7% of the country’s economy. Malaysia welcomed 13.35 million international tourists and recorded a 6.8% growth in tourism receipts, contributing RM41. 69bil to the country’s revenue during the first half of 2019,” writes The Star.

Rivers are essential for the contribution of the tourism sector, being destinations for locals and international tourists for activities such as fishing, wildlife viewing, boating, etc. These can increase tax revenue and additional employment in the tourism industry. 

Malaysia’s Water Vision

The Global Water Partnership and Malaysia Water Partnership report that Malaysia will conserve and manage its water resources to ensure adequate and safe water for all (including the environment). Below are the key objectives for the vision:

  • Water for people: all have access to safe, adequate and affordable water supply, hygiene and sanitation.
  • Water for food and rural development: provision of sufficient water that will ensure national food security and promote rural development.
  • Water for economic development: provision of sufficient water to spur and sustain economic growth within the context of a knowledge-based economy and e-commerce.
  • Water for the environment: protection of the water environment to preserve water resources (both surface water and groundwater) and natural flow regimes, biodiversity and the cultural heritage, along with mitigation of water-related hazards.