Negotiating water

As their population continues to grow, both Pakistan and India are increasingly desperate for water. Without this vital commodity the needs of people and of agriculture as well as industry can simply not be sustained. Unable to reach a decision taking forward the 1950 Indus Water Treaty, as neighbouring countries which must cooperate with each other on some matters to serve the needs of people New Delhi and Islamabad appear to have reached a stalemate. After four years of attempting to reach some solution the World Bank has said it is unable to take an independent decision on either appointing a neutral expert or a court of arbitration to settle their water dispute.

The dispute is becoming more and more serious with reports from Pakistan stating that water levels are sinking in many parts of the country and that many resources have become contaminated. In addition, India has built barrages and dams which Pakistan says violate the 1950 treaty. There has however been no resolution on this while the World Bank has declined to fund the Diamer-Bhasha Dam, with the outgoing country director for the World Bank stating on the completion of his five-year term in Islamabad that the World Bank as a matter of policy prefers not to finance disputed projects. The Bank has funded two other dams on the Indus river. India has also raised objections over the location of the Diamer Dam. The World Bank has said that while Pakistan seeks a court arbitration, India wants an neutral expert to resolve their dispute on two hydro-electric projects and the division of water. And that the two countries need to find a bilateral means to move the dispute forward and find a resolution. There is no provision in the treaty for the World Bank to take an independent decision on the matter.

Pakistan has reminded the World Bank several times to recognize its responsibility and address the concerns over the two disputed projects, the Kishanganga Hydroelectric Plant and the Ratle Hydroelectric Plant – being built by India. The World Bank’s decision to avoid further involvement in the matter given the different stances taken by the two countries of course complicate matters. The problem is exacerbated by the declining relations between New Delhi and Islamabad which lie at an all-time low. This makes it even harder to consider a possibility of a bilateral consensus being reached on the sensitive issues of the new barrages, their design and related issues. Pakistan and India had discussed the matter in Washington in September 2015 under World Bank mediation but failed to reach any kind of agreement. Pakistan has raised objections to the design of the projects being pursued by India almost a decade ago. However, secretary-level talks and requests for World Bank arbitration have not solved the problem. As a country with a high cost of power generation, with Pakistan’s costs about 25 percent higher than other regional countries, a solution is vital. The water problem has also made Pakistan’s power sector unsustainable. It is unclear where things can go from this point and what the next step should be for Pakistan, the country worst-hit by the crisis.