WATER P-NOTES ISSUE 17 OCTOBER 2008 46469 Pakistan's Water Economy: Running Dry W ith an average rainfall of under 240 milli The natural resource base is being degraded meters a year, Pakistan is one of the world's on a large scale by salinity, uncontrolled pollution most arid countries. The population and the and inadequate levels of water and silt to sustain economy are heavily dependent on an annual in the delta. Groundwater is now being overexploited flux of water into the Indus River system that ema in many areas, and its quality is deteriorating; yet nates from the neighboring countries and is mostly tens of thousands of additional wells are being derived from rainfall and snowmelt in the Hima put into service every year. Flooding and drainage layas. Throughout history, people have adapted problems will get worse, especially in the lower to the low and poorly distributed rainfall by either Indus Basin, as silt builds up and narrow embank living along river banks or carefully husbanding ments force the rivers to flow within relatively narrow and managing local water resources. In the nine beds above the level of the land. Climate change teenth century, the advent of largescale irrigation is causing the glaciers of the Western Himalayas technology decisively shifted the balance between to melt and retreat. This is likely to exacerbate the man and water. In the twentieth century, Pakistan already serious problems of flooding and draining faced several political and natural challenges to during the next decades. When the glacial reser its water economy. These were successfully man voirs are empty, there are likely to be dramatic de aged through the Indus Water Treaty with India creases in river flows. and the shrewd application of science, technology and economics, but Pakistan is once again facing Pakistan has done little in recent years to build a number of very serious waterrelated threats to its and maintain the knowledge base and the accom survival. panying institutional and human systems required to manage the massive and highly complex Indus Basin. Much of the water infrastructure is in poor Sobering Facts repair, and there are no modern Asset Manage ment Plans for any of the major infrastructure. The The facts are stark. Pakistan is one of the most implementation of capital investment projects is waterstressed countries in the world, and the per characterized by inefficiencies, completion delays, capita availability of water (about 1600 cubic me and time and cost overruns. ters in 2003) is declining. There are no additional The system is not financially sustainable. As a water resources to be exploited and agricultural result of low user charges and inefficient bureau water use must decline to enable adequate flows cracies, insufficient funds are available for mainte into the degrading Indus River Delta. Pakistan's de nance and operation of services. As a result, service pendence on a single river system makes its water quality declines and users are even less willing to economy highly risky. pay, and so on. The task of moving water to users This note summarizes key messages and findings from Pakistan's Water Economy, by John Briscoe and Usman Qamar, published by Oxford University Press and The World Bank in 2006. The report was pre pared in collaboration with the Government of Pakistan and drew on background papers by Pakistani experts. Readers may download the report and background papers at www.worldbank.org/water. WATER P-NOTES is poorly managed, and corruption is common. The Four Major Challenges result is an inequitable distribution of water and a pervasive environment of mistrust and conflict. The Building a Knowledge-Based Capacity: The sus water bureaucracy has yet to make the vital mental tainable management of a huge, interlinked and transition from builder to manager. Water produc very complex natural resource base is probably the tivity is low. Crop yields, both per hectare and per single most challenging longterm task for Pakistan cubic meter of water, are much lower than interna and requires the development of worldclass ca tional benchmarks, and even much lower than in pacity in three related areas: the natural sciences, neighboring areas of India. the engineering sciences, and the social sciences. When river flow is variable, storage is required Pakistan needs to build a strong cadre capable of to match supply with demand: Pakistan has very working with all users in defining problems, de little water storage capacity, and its two large res veloping solutions, monitoring progress, assessing ervoirs are silting relatively rapidly. Pakistan must results, and adjusting as needed. This is a capacity invest very soon in costly and contentious new large which requires a wide range of disciplines--those dams. necessary for understanding climate, river geomor phology, hydraulic structures, surface water and groundwater hydrology, limnology, water chemistry, Hopeful Facts sediment management, hydraulics, soil sciences, terrestrial and coastal ecosystems, agronomy, plant On the positive side, Pakistan can call on consider physiology, industrial organization, conflict man able strengths. Pakistan has overcome major water agement, politics, economics, and financing. In the challenges in the past and has enormous potential past Pakistan has relied heavily on outside knowl human capacity to confront the next round of chal edge, especially in the sciences. Now Pakistan lenges. Over the last 50 years, major progress has needs to develop its indigenous capacity and make been made in managing the seeminglyintractable a major push to establish and nurture a new set problem of waterlogging and salinity. of institutions that will provide scientific, technical, and policy support for the management of increas There is a wellestablished tradition of water ingly scarce water. entitlements and rules for distribution in large areas of the system. These provide a basis for establishing Maintaining, Rehabilitating and Expanding Infra- entitlements for the remaining surface systems, for structure: Many elements of the vast hydraulic malizing entitlements for environmental flows, mov system are now reaching the end of their design ing towards a similar definition of entitlements for lives, and must be rebuilt. There is an enormous groundwater--and managing the system in a more backlog of deferred maintenance. Asset Manage transparent, participatory manner. ment Plans must be developed at both the federal and provincial levels. Such plans need to describe The federal and provincial governments have the condition of the assets; the requirements for thus far avoided the trap of subsidizing electricity for replacement, rehabilitation (or retirement), opera groundwater pumping and they should continue to tions and maintenance; the associated costs; and strongly resist pressures to move towards free power proposals for financing these costs. On the invest for irrigation in the future. ment side, there is an urgent need for construction Given the current low productivity, it is quite of major new storage on the Indus--a highly con possible to substantially increase production with ex tentious issue in Pakistan today. To make progress, isting supplies of water. A new class of progressive the government will have to implement the 1991 farmers is shifting to highvalue crops and putting Water Accord in a transparent and verifiable man unprecedented pressures on the irrigation depart ner, so that all provinces get their entitlements, ments to become more accountable and efficient. and guarantee and deliver reasonable quantities of water to the delta. Large investments are also Finally, in the past Pakistan has enjoyed higher required to extend water and sanitation services than expected returns from the major Indus Basin to the unserved population in cities, towns and water projects and the poor have probably been the villages and for previously neglected municipal greatest beneficiaries of these investments. and industrial wastewater treatment and disposal. 2 ISSUE 17 · OCTOBER 2008 The resource requirements for all of these critical a centerpiece of these systems. Over the past two investments are very large. Government will have years the Government of Punjab has made major to set priorities, adopt a viable plan for paying for progress in this direction--providing precedents to these investments, including costrecovery policies, build on. and ensure that limited financial resources are used efficiently. Adoption of a Principled and Pragmatic Path: The experience of other countries provides a set of Creation of a Modern Institutional Framework, proven "rules for reform" that should be applied and Mechanisms to Motivate Sustainability, Flex- in this effort. A few relevant examples are: initiate ibility and Productivity: To improve and modernize reform where there is a powerful need and demon water management, a very different type of state strated demand for change; involve those affected machinery will be required at both the federal and and address their concerns; develop a prioritized provincial levels--the focus of which will be on sequenced list of reforms; and understand that all instruments to govern the relationships of users water is local and each place is different--one size with water and with each other. It must introduce will not fit all. accountability, efficiency, transparency and com petition into the surface water supply business by unbundling bulk transmission and distribution How the World Bank Can be a enterprises and introducing contracts between the various parties. This will mean moving away from More Effective Partner a monolithic service model below the distribu taries to one in which a variety of forms of public The federal and provincial governments and the private partnerships can provide an alternative World Bank all agree that water management is to the irrigation department. While bulk business one of the central development challenges facing will probably remain in state hands, many major Pakistan, and that it is an area where the Bank has functions could be concessioned out to private a long history and a strong comparative advan operators. Under such scenarios, the government tage. The World Bank's waterrelated lending for would begin to play a very different role, empha Pakistan is expected to increase dramatically and sizing regulatory functions. It would also be far account for about US$1 billion over 2006­2010. more active in groundwater management and the These resources would support four key objectives development of a sophisticated natural resource or "pillars". management capacity for water and land systems. Asset Development and Management: Bank The improved administration of water entitlements funded projects will finance major investments in for both surface water and groundwater would be rehabilitation, the formulation of Asset Manage Figure 1. World Bank lending to Pakistan for water-related sectors -- past and prospective 600 500 50 2004­05 400 40 landing of 300 30 US$/year Bank 200 20 of Millions 100 10 % 0 1952­1960 1961­1970 1971­1980 1981­1990 1991­2000 2000­2004 2006­2010 % of Bank Lending Major Infrastructure Irrigation and Drainage Floods Urban Wastes Hydro Rural Waste Source: World Bank, 2004. 3 WATER P-NOTES ment Plans, and creation of efficient institutional generation of multidisciplinary water resources arrangements for asset management. The Bank specialists and the establishment of multidisci will continue to support the development and plinary centers of excellence will be important implementation of a strategy for drainage and salt objectives. management and other investments such as small dams, minor irrigation schemes and groundwater Service Delivery: The Bank plans to provide signifi management. The Bank could also be involved in cant support for provincial and citylevel efforts to the development of a new dam on the Indus River improve the quality, efficiency, and accountability and the implementation of appropriate institu of water supply, sanitation and irrigation services tional reforms and investments that would ensure through innovative service delivery models and the better use of water. modernization of infrastructure. Water Resources Management: The Bank expects On-farm Productivity: The Bank will continue to in to support development of water resources man vest in onfarm services (land leveling, watercourse agement capacity at the provincial and federal lining and new technologies) which are essential levels--with an emphasis on incorporating envi for agricultural diversification and improvements in ronmental considerations. The training of a new productivity. The Water Sector Board Practitioner Notes (PNotes) series is published by the Water Sector Board of the Sustainable Development Network of the World Bank Group. PNotes are available online at www.worldbank.org/water. PNotes are a synopsis of larger World Bank documents in the water sector. 4 THE WORLD BANK | 1818 H Street, NW | Washington, DC 20433 www.worldbank.org/water | whelpdesk@worldbank.org