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Help conserve water to keep cash flowing

Publication Date : 16-04-2014

 

While many people insist that cash flow is the lifeblood of any business, a similar case can be made for water. There are very few commercial ventures, if any, that can go on for long without a reliable water supply.

As such, the water crisis in Selangor is not just a testing time for households in the state, Kuala Lumpur and Putrajaya, but is also a huge headache for business operators in those areas.

The Federation of Malaysian Manufacturers, which describes itself as the country’s largest private sector economic organisation, has warned that the water shortage may lead to the industries being sandwiched between higher costs and lower sales.

The federation wants the authorities to work out a long-term solution soon to the shortage so that it will not be a recurring nightmare. The man in the street desires exactly that as well.

And here is another effect of the water crisis that touches both consumers and businesses – the two groups are equally jolted by the water rationing programme and the spectre of things getting worse. Or at least it ought to be so.

If we are right-thinking people, the crisis should remind us that the relatively low tariff for treated water in Malaysia does not mean we have an abundant and inexhaustible supply. In fact, it is downright reckless to ignore how climate change is impacting the weather and water resources.

Therefore, Lesson No.1 from the water crisis is to stop assuming that we will forever have all the water we need. Water has much value and should never be wasted. There has to be a mindset change on how water is used, and the business community can play a big role in this.

Many investment decisions take into account the water rates because they contribute to the cost of doing business, and Malaysia scores well in this aspect because the tariff incorporates various forms of government subsidies. However, the businessmen should accept that they may one day have to pay more for a stable supply of water.

This demand for unreasonably cheap water is self-defeating. Sure, investors can threaten to pull out and relocate to other countries that offer lower rates, but this game will be short-lived. Ultimately, we cannot outrun or outsmart global warming.

We can, however, be strategic and far-sighted in our response to its consequences.

Hopefully, our businessmen are enlightened enough to see the water crisis as an affirmation of the importance of business sustainability, that is, the concept that a business has to be managed not just from a financial perspective, but also based on what it does to society and the environment.

Businesses that are serious about sustainability are committed to reducing their use of water. They also look at how they can help suppliers, customers, employees and other stakeholders do the same.

This may sound like straying from the profit motive, but let us not forget that revenue or cash means so little if the world runs dry.

 

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