Every drop counts
John Wall ( World Bank's country director for Pakistan )
President Musharraf's announcement of his government's intention to proceed with the Bhasha multi-purpose project comes after decades of discussion on what should be the next major dam on the Indus. I am sure the very useful and needed debate on the subject will continue. I suspect the quality of the debate would rise if one asks a different question than whether or not this dam is justified. The question I suggest is: what should Pakistan do to get the most income from each drop of water to reduce poverty?
This is the basic question asked in Water Economy: Running Dry, the new World Bank report on water resources in Pakistan (available at
www.worldbank.org.pk). This is a very important query since Pakistan is basically a desert with a river running through it. Water is scarce and almost all that is available is already being used. Pakistan has invested heavily in its irrigation system, so much so that it now has the largest integrated irrigation system in the world. This system has brought immense benefits to the country. Unfortunately, since a flurry of attention and high-return investment in the 1960s and 1970s, Pakistan's water management system has been neglected, giving rise to the four major gaps that exist today.
The maintenance gap: Much of the system is in poor repair, is financially unsustainable, dangerous in parts, and unable to deliver water to farmers reliably and predictably at the design discharge level. This reduces the value of the water to farmers immensely.
The trust gap: Monopoly + discretion - accountability = corruption. The system is admirably designed to provide water entitlements in a predictable, timely way but instead provides inequitable, unreliable supply of water in an environment of mistrust and conflict, from the provincial level to the farmers' fields.
The performance gap: Irrigated yields in better-managed systems in desert conditions, such as the Imperial Valley of California, are twice those of Pakistan per unit of water and three times per hectare. In Pakistan, yields from self-provided groundwater are twice that of canal supplies.
The knowledge gap: Pakistan's world-renowned water planning capability has fallen into disrepair, instead of modernising to provide smart, adaptative management. As irrigation systems around the world mature, the rates of return to new infrastructural investments fall and returns to spending on better management rise. Pakistan's growth of water management knowledge, and hence its value to the nation, got stunted over time.
As against these gaps, Pakistan has two major strengths to build on.
Water entitlements are well established: Pakistan's rights to the waters of the Indus Basin are clearly defined in the Indus Waters Treaty. The Water Accord of 1991 establishes clear entitlements for each province and, implicitly, for each canal command. There are well-established rules for distributing water to each distributary and its outlets. Finally at the watercourse, warabandi establishes each farmer's right to his turn to take whatever water is flowing in the delivery channel. This is a very important achievement that only needs enforcement in a more transparent, participatory manner to increase the income value of surface water immensely. Similar entitlements need to be established for groundwater use.
High returns from investment in better water management: Of course the flip side of the current low returns to surface water use in Pakistan is the potential to capture higher returns from better water management. Pakistan did get higher returns than the World Bank predicted from the Tarbela Dam. A thorough review of India's large Bakra-Nangal similar multi-purpose dam showed that because of the increased demand for agricultural labour, the poor benefited from the biggest percentage increases in income from investments in irrigation and hydropower infrastructure. Furthermore, the economic returns are higher for the electricity produced from the major combined-use dams than from agriculture.
Pakistan needs to focus on four critical 'software' areas:
Maintain assets: The replacement cost of Pakistan's water resource assets is over 100 per cent of its total annual income (GDP) and more than 150 per cent of its total public debt. Most of this is owned by the provincial governments and is quite old. The small fiscal space in the provinces, plus the inclination of irrigation engineers to build anew rather than maintain, has left a crumbling infrastructure.
Manage water resources: The challenge is not to raise or lower the sluice gates, which should be a decentralised, non-government function; it is to regulate the system to ensure the delivery of water entitlements, transparently measure and monitor them with accountability for equity and (just as importantly) perception of equity, from the provincial level to the canal to the distributary to the outlets to farmers' fields.
Improve on-farm productivity: There are tremendously high pay-offs from combining better water management with better farming practices -- land levelling, watercourse lining, introduction of new technologies, marketing, diversification -- to get more highly valued crop per drop.
Get the priorities right: Resources are scarce. Use them wisely by maintaining and rehabilitating existing assets, decentralising irrigation management and ensuring water entitlements through transparent, accountable systems. Start long-gestation investments (institutional and human capacity building, major infrastructure investments and knowledge creation) early.
For a country so dependent on irrigation, Pakistan has very little water storage. The US and Australia have over 5,000 cubic metres of water storage per capita, China has 2,200 cubic metres and Pakistan just 150 cubic meters. The arid water basins of the Colorado and Murray-Darling Rivers can store 900 days of river run-off. Equally arid Pakistan can store barely 30 days' worth.
Pakistan's population and siltation dynamics mean the pay-off from investing in additional storage is very, very high. Pakistan is a 'young country' in terms of both its population growth (i.e. high growth and high proportion of population in reproductive ages) and geologic growth (i.e. rapidly growing mountains that dislodge silt). This means that water reservoirs need replacement sooner than otherwise.
The electric power benefits of either Kalabagh or Bhasha are even higher than Tarbela's, which were 60 per cent of total economic benefits. In the cases of Kalabagh and Bhasha, the power benefits are 75 to 85 per cent. Pakistan has developed only 10 per cent of its 40,000-megawatt economically viable hydro-power potential, much lower than India's and China's 30 per cent and the richer countries' 75 per cent.
The concerns of different provinces should be abated if there is trust in the entitlements provided in the 1991 Water Accord. Compared to the existing water entitlements, there is a strong redistributive force in the allocations of newly mobilised water in favour of the NWFP and Balochistan, with the Punjab's share declining more than that of Sindh. There are very important issues concerning the fair treatment of people and the question of who gets the 'royalties' on power generation. These need resettlement. Even more significant is the issue of 'trust', that the clearly defined entitlements will be respected.
Now that the president has made a decision, it is important for Pakistan to carry through on a variety of initiatives that are needed complements. Pakistan needs to adopt and implement a comprehensive water development policy, not just a water storage investment programme. Pakistan must give priority to developing infrastructure in Balochistan and the NWFP to enable them to use their entitlements to existing and 'new' water. Pakistan needs to make all aspects of its water allocations under the1991 Accord more transparent, reliable, rule-based and trustworthy. Pakistan needs to appoint a high-level, neutral water auditor equipped with the resources to measure all abstractions from the system and report these in a public and open way. Pakistan needs to resolve the long-standing dispute over entitlements for water release below Kotri Barrage to maintain the water balance in the Delta, taking into account a recent set of studies and recommendations by a panel of experts. Pakistan needs to devise a complete financing and balanced plan for a public sector development framework that accommodates the investment needs for water development along with Pakistan's many other development priorities, including health, education, power and transport.