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February 5, 2019

WB estimates $12bln as costs of inept water management

Business

February 5, 2019

KARACHI: The World Bank on Monday estimated $12 billion as economic costs per year to Pakistan from poor water and sanitation, floods and droughts.

“The economic costs to Pakistan from poor water and sanitation, floods, and droughts are conservatively estimated to be 4 percent of GDP, or around $12 billion per year,” the World Bank said in a report, “Pakistan: Getting More from Water”.

“These costs are dominated by the costs of poor water supply and sanitation. The economic costs of degradation of the Indus Delta are estimated to be around $2 billion per year, while the costs of pollution and other environmental degradation have not been assessed.”

The World Bank said the estimates of economic benefits and costs cannot be directly compared or aggregated, but they demonstrate that Pakistan gets a poor economic return from its significant water resource.

The bank said the country does not make the best use of its water endowment. Water use is heavily dominated by agriculture, which contributes around one-fifth of national GDP, but less than half of this is from irrigated cropping. Irrigation contributes around $22 billion to annual GDP.

The four major crops (wheat, rice, sugarcane, and cotton) that represent nearly 80 percent of all water use generate less than 5 percent of GDP—around $14 billion per year.

“Other economic contributions from water are difficult to accurately assess, but hydropowergeneration is economically significant, with a current market value of $1 billion to $2 billion.” The World Bank said irrigation service delivery is poor and contributes to low productivity.

“Hydraulic efficiency of water distribution is very low, and water delivery across command areas is inequitable,” it said. “Irrigation services are not financially sustainable and financial performance is declining. Service tariffs are set too low and are decoupled from service quality, and the operational costs of service providers are far too high.”

The bank said poor operational performance in irrigation continues to exacerbate water logging and salinization, especially in Sindh. “Despite large-scale reclamation efforts, high water withdrawals and poor drainage mean salt continues to accumulate in soils and groundwater in the lower Indus Basin, affecting agricultural productivity.”

The World Bank further said scant attention is paid to the environmental outcomes from water in Pakistan, and water-dependent ecosystems — rivers, lakes, wetlands, and the Indus Delta — are in rapid decline.

“This decline is characterised by biodiversity loss, greatly reduced stocks of freshwater and estuarine fish stocks, and a loss of other ecosystem services, including the storm protection afforded by coastal mangrove forests,” it added.

“Excessive water withdrawals and widespread pollution are the main causes of decline, but river fragmentation by infrastructure and changed sediment regimes contribute.” The World Bank said Pakistan could get more economic, social and environmental benefits from its water, subject to urgent reforms to improve water use efficiency and service delivery.

“Water security in Pakistan is reaching a critical point that demands urgent attention and reform,” Illango Patchamuthu, World Bank Country Director for Pakistan said in a statement.

“Boosting irrigation productivity, while paying more attention to the social and environmental aspects of water management, is critical.”

“This will require strong collaboration between federal and provincial governments and other stakeholders. The objective must be to strengthen water governance and strategic water planning to build resilience in the face of a changing climate and growing water demands.”

William Young, author of the report said new dams can help improve water security but will not address the most pressing water problems that Pakistan faces. “Irrigation systems need modernising; hydromet systems should be expanded; and urban water infrastructure, especially for wastewater, requires major investment.

The National Water Policy provides a sound basis for reform, but provincial water policies need much attention, and the underpinning legal framework is incomplete and needs strengthening,” Young said.

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