water as a platform for development : south asia initiative sai, harvard university presentation in...

John Briscoe, Erum Sattar, Anjali Lohani, Hassaan Youssuf and Laila Kasuri

Harvard University

Lahore, July 22, 2011

Caveats:

• These are very sensitive political issues

• These are my own opinions and absolutely not “now revealed” views of the World Bank

• What I say about the position of the World Bank is based on public information not on “insider information”

Story line

1. Some basic facts that will drive cooperation (or conflict) over water in South Asia

2. Sharing waters – good and bad experiences

3. Sharing benefits – good and bad experiences

Nothing new in conflict over water…

• Origin of the word “rival”: 1570–80; < L rīvālis orig., one who uses a stream in common with another, equiv. to rīv(us) stream + -ālis -al1

Water security cannot be understood in isolation…

Income security

Food Security

Water security

Energy Security

The international transboundary waters come on top of major internal

challenges

Several major international river basins

Territorial disputes in important parts of the catchments…

All international rivers in South Asia rise at great height in the Himalayas

0 1000 2000 3000 4000

Nepal Africa

North America

Europe Japan

South America

Pakistan

Source: World Bank 2003

% hydropower potential developed

Thousand GWH/year economically viable potential

There is massive unexploited hydroelectric potential…

And then there is climate change…

Sukkur,

August

Sukkur,

August

With the prospect of more frequent flooding…

And huge questions about what happens in the Himalayas

Context: South Asia is the least integrated region in the world

…. intra-regional trade is the lowest in the world

Lack of mutual ties-that-bind

aggravate otherwise resolvable conflicts

The overlap between water scarcity and the RNSSC members…

Standard fare: •Terrorism •Nuclear Proliferation Now: •Water

Story line

1. Some basic facts that will drive cooperation (and conflict) over water

2. Sharing waters in South Asia – good and bad experiences

3. Sharing benefits – good and bad experiences

Sharing waters

• A good framework well implemented (so far) – the Indus Waters Treaty of 1960

• A good framework imperfectly implemented (so far) – the 1991 Water Accord in Pakistan (presented by Erum, Anajali, Laila and Hassan)

• A bad framework badly implemented – inter-state rivers in India

• An nth best with implementation difficulties – the Ganges Treaty of 1996

Pakistan

Jhelum

Sutlej

Chenab

1947 – Partition

The challenges and legacies of partition in 1947

• the headwaters were in India

• And the major irrigated areas (about 85% of total irrigated area) in Pakistan

(Conflicting) principles for sharing water

• Equitable use (EU)

• No appreciable harm (NAH)

President Ayub Khan • “We have been able to get the

best that was possible…”

• “Very often the best is the enemy of the good, and in this case we have accepted the good after careful and realistic appreciation of our entire overall situation”

• “The basis of this agreement is realism and pragmatism…”

A brutal solution

• The Eastern Rivers – the Ravi, Beas and Sutlej -- all water to India

• The Western Rivers – Chenab, Jhelum and Indus -- all water for Pakistan – But what about the non-consumptive development

opportunities in India? • Energy could be used (in Indian-held Kashmir) without affecting

quantity or timing of flows to Pakistan

– Very detailed site-by-site specification of what India could do respecting two principles: • No material changes in hydrographs

• Limiting the amount of “live storage” in specific Indian HEPs

Live storage

Dead storage

I n d i a

P a k i s t a n

The Indus - The Treaty (1960)

Financing of “the replacement works” in Pakistan…

• $ 900 million to finance the construction of Mangla, Tarbela and major link canals.

• Donors -- $300 million provided by Australia, Canada, Germany, New Zealand, United Kingdom and United States.

• Pakistan provided about $350 million from own budget

• $80 million loan from World Bank

• $174 million dollars paid by India for construction of dams and canals in Pakistan

The IWT widely regarded as a great success…

“the one area where India and Pakistan have worked constructively together, even when they were at war…”

But….

After 40 years, for the first time,

India and Pakistan were

unable to bilaterally resolve an issue through

the IWT Commission – the design of

Baglihar Dam on the Chenab

• India’s design of Baglihar: – Concern about siltation (Salal Dam silted up very fast)

– Chinese principle “store clear water, discharge muddy water”

– Good practice is to install low gates to flush silt

• Pakistan’s fear: – With low gates, India could manipulate flows coming

into Pakistan..

• In 2004 Pakistan petitioned the World Bank to appoint a “neutral expert”

• As stipulated in the IWT the World Bank did this

Outcome of the Baglihar case…

• Apparently –Solomonic:

• 3 findings for Pakistan

• 3 for India

–a successful “win-win”…

• But re-interpreted the IWT: –Legitimately:

• took into account new knowledge (especially on sedimentation management)

Rivers full of silt…

The Baglihar re-interpretation on permissible “manipulable storage” …

Old manipulable storage

New manipulable storage

I n d i a

P a k i s t a n

Indian Hydro, especially in the Chenab Basin will put great stress on the IWT

Salal 700 mw

Sawal Kot 1200 mw

Baglihar 450 (+ 450) mw

Dul Haste 390 (+ 390) mw

Bursar 1000 mw

Pakuldul 1000 mw

Complete

Under construction

In planning

Kishenganga 330 mw

The result of the Baglihar NE decision?

– Baglihar NE focussed only on the “make use of the resources” principle in the IWT and ignored the “without giving a capacity to manipulate flows” principle

– Back-of-envelope calculations suggest that after it has built all currently-planned hydros, India will be able to store about 40 days of low-flow in the Chenab

– Pakistan left largely without protection if India decided to temporarily withhold water from Pakistan

The current conflict (Kishenganga)…

Neelum River

Jhelum River

Neelum Jhelum 1000 mw

The current conflict…

Neelum River

Jhelum River

Kishangana 330 mw

Neelum Jhelum 1000 mw

What does the Indus Waters Treaty say?

• Annexure D, para 15

– where a Plant is located on a tributary of The Jhelum on which Pakistan has any agricultural use or hydro-electric use, the water released below the plant may be delivered, if necessary, into another tributary but only to the extent that the then existing agricultural use or hydro-electric use by Pakistan on the former tributary would not be adversely affected .

Case before an international tribunal – let’s see how it rules….

The choice?

• For Pakistan (and India):

– With massive increase in plans on the Jhelum and (especially) Chenab in Indian-held Kashmir..

– The stresses on the IWT mechanism will become overwhelming

– Continue as is – heading for a trainwreck?

• For Pakistan major concerns: – The “physical protection” of limiting live storage has been greatly

reduced by the Baglihar finding….

• For India: – major uncertainties for investors

– And fuel to the jehadi fire…

What might be done to save the IWT?

• The division of property rights is sound and should be maintained

• The dispute resolution mechanism could be modernized: – Away from engineers scoring points against other

engineers

– Engagement of neutral dispute resolution expertise

– Invest in win-win projects

• For example, why not do jointly-planned, jointly-financed and jointly-operated hydel?

Itaipu Binacional (Brazil-Paraguay)

Brazil Paraguay Bolivia

GDP (billion US$ ppp)

The example of the bi-national (Paraguay and

Brazil) Itaipu project

• Brazil’s president agreed to triple Paraguay’s income from Itaipú

• The agreement is a huge deal for Paraguay… • For Brazil, the approximately $240 million a year it

agreed to give up is a small price to pay for Mr. da Silva’s broader goals of calming tensions with its neighbors, asserting Brazil’s leadership in the region and promoting regional integration

Is such big-heartedness likely on the Indus?

– In the past the general sentiment in India would have been “we would never use water as a weapon…”

–And now the prevailing sentiment is “this would be legitimate payback for Mumbai”….

–And India has simultaneously: • advised Pakistan to build storage on the Indus

• Pressured the World Bank (which has apparently caved in to such pressure) to not invest in Daimler Basha Dam on the Indus in Pakistan…

Sharing waters

• A good framework imperfectly implemented (so far) – the 1991 Water Accord in Pakistan (presented by Erum, Anajali, Laila and Hassan)

The 1991 Water Accord

July 22, 2011

Harvard Pakistan Water Project

Presentation at the Harvard South Asia Initiative Conference in Lahore, Pakistan

In Collaboration with LUMS

Harvard SAI Conference

Agenda

Background on the Accord

The Accord, Ambiguities and Implementation

Suggestions and Next Steps

Importance of Resolving Ambiguities and Implementation Issues

Agenda

Background

Why we Chose to Focus on the Accord

Pakistan’s glass on this is half full (we HAVE an Accord!) but also half empty….

•Trans boundary issues of growing importance; “water wars” •Most focus is between countries (e.g. IWT)

•But there are issues at all levels, not least among provinces in federal countries •Harvard Water Security Initiative and HLS will be doing a conference this spring on “Water Management Across State Boundaries in Federal Countries”

Ambiguities and necessity for adjustments are part of all water accords

The Accord has actually worked reasonably well despite a lot of noise

Half Empty

Half Full

But it could work a lot better, and that is what we are going to now focus on…

Background

Glass Half Empty and Half Full

Ad hoc sharing arrangements were followed till 1990 but no storages

post Mangla and Tarbela could be agreed upon until water apportionment

was done Tim

Background

Inter-Provincial Water Issues in Pakistan

Finally in 1991, the Accord was signed to allocate existing and future water amongst the provinces with the aim to create trust and facilitate construction of much needed future storages …

The provincial sharing of water has been a long, contested issue even

before the current Accord (e.g. Sukkur Barrage) Century and a half of disputes

… however, various issues around the Accord have contributed to the mistrust amongst the provinces and hampered the construction of these storages

Mistrust Amongst Provinces

Accord Ambiguities + = Institutional and Implementation Issues

Agenda

Institutional and Implementation Issues

Ambiguities + =

The key ambiguity in the 1991 Accord relates to what

constitutes “initial conditions”

Ambiguities in the Accord

Initial Conditions Debate

•The historical uses (77-82) of 103 maf were used as a guideline for creating Accord allocations of 114 maf •Once the Accord has been made, it has to be implemented •Accord envisages pro-rata sharing of shortages and surpluses

Use historical allocation of 103 maf until 114 maf comes online through additional storage

Another Interpretation One Interpretation

The Accord: 1991 to present

These two different interpretations of the Accord have added to inter-provincial mistrust especially in times of shortages

Water Availability

Accord is Approved

1991 2001-2002

Law Division opinion: 1994 Ministerial decision based on historical use is a violation of the Accord

1994 Ministerial decision based on historical use Implementated

3-tier scenario introduced; KPK and Balochistan exempted from sharing shortages

2003-present 1994

Ministerial Meeting decides sharing should be based on historical use

Ad hoc Allocations

‘99 – ‘00 ’03 – ‘04

Timeline

103 maf 114 maf

Shared as per Actual Average Historical Use

(77-82)

Shared as per Accord allocations

Balance supplies shared as per para 4 percentages

(37-37-14-12)

Shared as per Accord allocations

Scenario I Scenario II Scenario III

The Accord: Three-tier Scenario

Water Availability

There are gainers and losers under this method

The Accord: Current Mistrust

This has exacerbated rather than reduced mistrust

The three-tier scenario appeared to be the best compromise at that time

The three-tier method seems to be a functioning yet uneasy modus operandi

There is constant contesting especially around the issue of exempting KPK and Balochistan from sharing shortages

But the provinces have not yet appealed to the CCI on this issue

It seems that no single province can afford to unravel the system – YET !

The implementing body of the Accord, Indus River System Authority (IRSA), must be strengthened to deal with these existing pressures and future

challenges

However, there will be new pressures on the system in the future (e.g. Gilgit-Baltistan)

The Accord: Implementation Issues

Institutional and Implementation Issues

Ambiguities + =

In addition to these ambiguities, there seem to be a number of institutional and implementation issues around the Accord

Predicted Flows

Monitoring

Losses

Key Technical Issues (1/2)

•Correlation with prior irrigation season used for

predictions; increased variability with climate change

•Provinces bring different numbers to the table which

serve their interests

•Possibility of forecast manipulation which could undermine trust in IRSA

•Inadequate monitoring of data

•In 2002-03, telemetric system was installed but has

not been successful

•Significant losses witnessed between barrages; losses doubled over last decade •Rapidly growing unauthorized abstractions •Greater reliance on groundwater

All these technical limitations increase provincial mistrust

Technical Issues

Key Technical Issues (2/2)

Institutional Issues

•Lacks authority to double check provincial data

•Underfunding hinders implementation capacity

•Important steps made to secure financial basis

for IRSA

•Provincial dependence for allowances

•Corporatization envisaged in 1991

Enforcement

Funding

Lack of Autonomy

Absence of an inter-ministerial, inter-provincial body to oversee water sector planning and development

Key Institutional Issues

Regulatory Framework

Agenda

Shortages increase competition which cause ambiguities to surface

Lack of transparency in dealing with ambiguities increases mistrust

Mistrust is one factor that blocks consensus on building reservoirs

Lack of reservoirs exacerbates shortages

Importance of Resolving Ambiguities

Vicious Circle of Water Insecurity

Water Insecurity

“Sindh wants implementation of 1991 Water Accord” Dawn, June 06, 2009

“Punjab farmers reject 1991 Water Accord without Kalabagh Dam” Dawn, April 3, 2010

“Sindh rejects construction of Kalabagh Dam” Dawn, June 17, 2010

Provincial Stalemate on Key Storages

SAI Conference

Agenda

Implementation Issues

•Put key data online; look to Punjab as a model. • IRSA’s recent step to put up daily data is commendable but needs to be more comprehensive.

•Ensure installation of telemetry stations and training of staff for continuous data collection and monitoring to perform flow measurements •Start with barrage to barrage and canal headworks monitoring •In the long run, need more comprehensive monitoring

Some Next Steps for IRSA

•Urgent need for an independent, technical assessment of “conveyance losses” •Bring illegal abstractions into the allocation and management system through improved monitoring

Increased transparency will reduce mistrust

Data Availability

Monitoring

“Conveyance Losses”

Next Steps for Us

We are preparing a paper (or papers) inter alia for the Harvard conference on “Inter-state management of water in Federal Countries”

We see this as an input for the Pakistani leaders who will be invited to the conference

From that there will be “lessons of better and worse practice” around the world

Will be a great opportunity for Pakistan to consider the way in which it

can do better on this vital issue

Back to Professor Briscoe !

Sharing waters

• A good framework badly implemented (so far) – the Indus in Pakistan

Union Government very passive: “Water is a state issue”, when in fact it

is on concurrent list

• Interstate issues left to Tribunals

• Which have no standard operating procedure

• Which take decades to come to unpredictable decisions

• Which stimulate destructive gaming on behalf of the States

Minister of Finance, India:

India facing a growing series of “small civil wars” over water rights…

Minister of Water Resources:

“I am not the Minister of Water Resources but the Minister of Water Conflicts”

Sharing waters

• A good framework imperfectly implemented (so far) – the 1991 Water Accord in Pakistan

The issue

• Diversions of Ganga water at Farakka has had a negative impact on Bangladesh

• (Coupled with the “natural” easterly drift of the main channels of the delta)

Ganges at Hardinge bridge

Effect of abnormal reduction of Ganges flows in Bangladesh

U p p e r M e g h

n a R i v e r

C h a n

d n a R i v e r N a b a g a n g a

K u m a r R i v e r

G o r a i

R i v e r

J a m u n a R i v e r

P a d m

a R i v e r

G a n g e s R i v e r

Dry season 5 ppt

isohaline now

Dry season 5 ppt

isohaline in 60s

Salinity Intrusion

Closing of Gorai has major environ-mental impact in Sundarbans

Water for India

Water for Bangladesh

Low flow Medium flow High flow

Water Availability at Farakka

The 1996 Ganges Treaty signed by India and Bangladesh

Tariq Karim is now the Bangladesh High Commissioner in Delhi…. And have just concluded another major treaty on sharing waters of the Teesta River

(A posture which would help in the case of the IWT….)

Story line

1. Some basic facts that will drive cooperation (and conflict) over water

2. Sharing waters – good and bad experiences:

3. Sharing benefits in South Asia – good and bad experiences

Sharing benefits…

• An international success – Bhutan and India

• An international failure – Nepal and India

• An international possibility – China and India on the Brahmaputra

Bhutan’s main resource is water and gravity……

Gross national happiness is very high…

• “Bhutan’s ability to harness the hydropower resources has been made possible because of the close and friendly ties with its neighbour India. India has been the lead donor in providing both technical and financial assistance to develop the numerous hydro power projects in Bhutan. The relationship developed in the hydro power sector has been a win- win situation for both the countries. India has a huge power shortage while Bhutan a large hydro power potential.”

• GoI has funded the construction of the major hydropower facilities. The scheme used to finance these facilities was 40% grant and 60% loan (20 years maturity and 9 percent interest rate in rupees).

• Direct sale of electricity (with installed capacity of about 300mw) contributed as high as about 45% of the gross national revenue during the 8th Plan (1997-2002), mainly from its export to India. The 1020 mw Tala project came on line in 2007 (and led to 23% growth in GDP!)

Sharing benefits…

The (shameful) case of Arun III • A medium-size project (400 mw)

• Nepal relied on “international donors” so that it would not be in India’s hands.

• The World Bank abandoned Nepal on the altar of political expediency….

• The fig-leaf was “the project is too big for Nepal” (although Bhutan’s Tala, 2.5 times as large as Arun, proved not to be “too big” for the economy of Bhutan, which is 1/8th that of Nepal…”)

Although, of course, the

World Bank’s withdrawal really had

more to do with this….

As told here….

Happily it looks as though Nepal is finally learning from Bhutan….

Sharing benefits…

Yangtze river

ENERGY: 40,000 mw at Big

Bend: Sell to India?

IMPACT ON INDIA/BD?: (a)70% of flow comes below the border

(b) Some augmentation of low flows

TRANSFER TO YANGTZE?:

Would have to pump over 8000

Overall Conclusions • Tensions over transboundary waters are growing

between countries and within countries

• These tensions raise the specter of water wars…

• The internal challenges are often as serious as the international ones (except that provinces do not – usually -- have armies)

• To move from conflict to cooperation: – In some cases sharing water can be the solution, in

others sharing benefits – Solutions almost always involve both soft (treaties,

institutions) and hard (infrastructure) components – External “full-service” partners (such as the World Bank)

have played and could play facilitating roles

• Cooperation: – Is dependent on the broader set of relationships

between countries and – Can contribute to improving such relationships

“beyond the river” – Politicians are going to have the maturity to lower

the temperature…

President Ayub Khan • “We have been able to get the

best that was possible…”

• “Very often the best is the enemy of the good, and in this case we have accepted the good after careful and realistic appreciation of our entire overall situation”

• “The basis of this agreement is realism and pragmatism…”

• Politicians (and people and the media) are going to have to learn to let bygones be bygones…

• Santayana:

– “those who do not learn their history will be condemned to repeat it…”

• I am a South African of Irish descent:

• Nelson Mandela:

– Acknowledge the past but do not become a prisoner to it…

– Move on and focus on creating a better future for all…

– If this example is followed in the sub-continent, water can be a source of cooperation and development….

• For Indians and Pakistanis and

• For Sindhis and Punjabis….

• Conor Cruise O’Brien:

– In Ireland we have learned our history so well that we are condemned to repeat it, endlessly

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