IMF’s advice for our water woes

IMF thinks that establishing markets for water rights can help allocate limited water to highest-valued uses

Syed Mohammad Ali July 09, 2015
The writer is author of the book Development, Poverty and Power in Pakistan, available from Routledge

The demand for water continues to rise with the rising global population and its corresponding consumption trends, yet freshwater resources are not so easily increased. Rising water stress, existing lack of access to safe drinking water and sanitation, and continuing water pollution are already afflicting many parts of the world. Climate change is expected to worsen existing water demand and supply imbalances.

Unsustainable population growth rates and poverty, combined with insufficient infrastructure and inadequate institutional capacity, have made access to water a particular problem in the developing world. The situation in Pakistan is particularly precarious. Besides the ongoing Himalayan glacial melt threatening the river system which constitutes Pakistan’s chief water source, new Nasa satellite data indicates that the Indus Basin aquifer is now the second most stressed in the world. This rapid aquifer depletion means that Pakistan does not have much groundwater in store which can be used as our river system becomes more stressed.

Yet, Pakistan currently has the world’s fourth highest rate of water use. Not only are the existing water losses in our irrigation system staggering, the irresponsible use of ground water for agriculture is also a lingering problem which our policymakers have failed to address. The amount of water used per unit of GDP within our country is amongst the highest in the world. Such reliance on water seems to suggest that we have infinite supplies, which is obviously not the case since Pakistan is already the third most water-stressed country in the world, and precariously close to becoming a water-scarce country.

Is the Glass Half Empty or Half Full?Given the above scenario, it is reasonable to conclude that water scarcity in Pakistan could threaten all aspects of national economy, as stated in the latest IMF report, “”

The IMF is right in advising us to move beyond finger-pointing at India. We could have built more dams to store water but their construction is expensive and controversial for environmental impacts and interprovincial disputes. The need to repair our existing dilapidated large dams, such as Tarbela, is however less problematic.

The IMF report also suggests reforming water pricing to help rationalise water use and to promote needed investments. Existing water subsidies provided through public utilities, like our irrigation department do disproportionately benefit influential groups, such as larger and medium-sized farmers, who also do not contribute to government revenue due to lax agricultural taxation. Since current irrigation water charges (abiana) recover less than a quarter of annual operating and maintenance costs, water losses cannot be curbed and irrigation water often does not reach poorer farmers.

Being a stalwart of the market mechanism, the IMF thinks that establishing markets for water rights can help allocate limited water to highest-valued uses. The IMF thus suggests that water pricing can help address many of these woes, without upsetting the fiscal deficit due to additional public spending.

The use of the market mechanism may not be able to achieve all these challenges despite IMF assertions. Our national decision-makers thus need to use a mix of economic incentives, reprioritisation of public spending priorities, and regulatory measures to address the multiple aspects of our growing water crisis.

Given that agriculture continues to consume the bulk of our available freshwater, Pakistani authorities must also do more to encourage adoption of water efficient crop production and cultivation of less-water-intensive crops. Pakistan also desperately needs to invest more in new water infrastructure, water-conserving technologies, and it needs to launch more effective programmes that help the poor obtain better access to water. There is also an urgent need to control excessive groundwater exploitation, to encourage conservation, and curb water pollution within the industrial sector as well.

Unless there is evidence of more national foresight to contend with our already severe water problem, the situation will only worsen in coming years, the disastrous implications of which are just too numerous and complex to even elucidate.

Published in The Express Tribune, July 10th,  2015.

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ehtessaab | 8 years ago | Reply PML-N's Metros vs PPPP's Shaheeds vs Media's Ratings vs ANP's Easyloads vs MQM's Bhatta Bori's vs The only party doing something for Pakistan = PTI's DAMS.... Thank you PTI for at least determining priorities ahead of all the plunderers everyone supports from judiciary to media to establishment
observer | 8 years ago | Reply Author misses the most important action that needs to be taken. Namely, control of the exploding population. Pakistan has the highest population growth rate among larger nations. Such a large population growth can only lead to unemployment, low per capita availability of resources including water and increasing poverty.
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