PAKISTAN S Water Economy

Transcription

1 Pubic Discosure Authorized Pubic Discosure Authorized Pubic Discosure Authorized Pubic Discosure Authorized THE WORLD BANK PAKISTAN S Water Economy Running Dry John Briscoe Usman Qamar 2

2 PAKISTAN S WATER ECONOMY

3 PAKISTAN S WATER ECONOMY RUNNING DRY John Briscoe Usman Qamar 1 THE WORLD BANK

4 CURRENCY AND EQUIVALENTS Currency Unit = Pakistan Rupee US$ 1 = PKR (8 November 25) FISCAL YEAR 1 Juy 3 June ABBREVIATIONS AND ACRONYMS AJK CAS COD DOs FGW FOs GDP GoP HYV IBDF IBDP IBIS ICR IPCC IRIS IWMI IWT KITE KWSB LBOD LCC MAF Azad Jammu and Kashmir Country Assistance Strategy Chemica Oxygen Demand Direct Outets Fresh Groundwater Farmer Organizations Gross Domestic Product Government of Pakistan High Yieding Varieties Indus Basin Deveopment Fund Indus Basin Deveopment Project Indus Basin Irrigation System Impementation Competion Report Intergovernmenta Pane on Cimate Change Indus River System Authority Internationa Water Management Institute Indus Waters Treaty Korangi Industria and Trading Estate Karachi Water and Sewerage Board Left Bank Outfa Drain Lower Chenab Cana Miion Acre Feet MTIP NDP NWFP O&M OED OFWM OPP PARC PCR PER PID PIDA PIM PMF PPAR SCARP SITE TDF TMA WAPDA WSS WUA Medium Term Investment Pan Nationa Drainage Program North West Frontier Province Operation and Maintenance Operations Evauation Department On-Farm Water Management Orangi Piot Project Pakistan Agricuture Research Counci Project Competion Report Pubic Expenditure Review Provincia Irrigation Department Punjab Irrigation and Drainage Authority Participatory Irrigation Management Probabe Maximum Food Project Performance Audit Report Sainity Contro and Recamation Project Sindh Industria Trading Estate Tarbea Deveopment Fund Tehsi Municipa Administration Water and Power Deveopment Authority Water Suppy and Sanitation Water Users Associations

5 Preface PREFACE This Report is the product of eighteen months of intensive work by The Word Bank staff and an eminent group of Pakistani and foreign consutants. The Bank team consisted of John Briscoe and Usman Qamar (Word Bank Task Team Leaders), Manue Contijoch (Word Bank); Don Backmore (former Chief Executive, Murray- Daring Commission), and Pervaiz Amir. The Report benefited greaty from forma reviews and comments by externa reviewers (David Secker, Richard Reidinger, Chris Perry, Saeed Rana, Shams-u-Muk, Frank van Steenbergen, Karin Astrid Siegman, Asif Kazi, Khaid Mohtaduah, Bert Smedema, Shamshad Gohar, Shahida Jami, and M.N. Bhutta), and Word Bank staff (Keith Pitman, Masood Ahmad, Abid Hasan, Shahzad Sharjee, Dae Lautenbach, Vado Vucetic, Adofo Brizzi, Xiaokai Li, and Aain Locusso). John W. Wa, the Bank s Country Director for Pakistan, provided unstinting support in deveoping and disseminating the Report and ensuring that it resuted in practica actions by both the government and The Word Bank. The Report benefited enormousy from the encouragement, guidance, and knowedge of senior officias of the Government of Pakistan (specificay from Ministry of Water and Power, Panning Commission, Economic Affairs Division, the provinces, and WAPDA). The Report was reviewed in detai by The Word Bank management, and the revised version endorsed by it. A fina round of consutations was hed in September 25 with the mutistakehoder group, incuding those who had advised during the eary stages of this work. The reease of the Report attracted extensive and higheve attention in Pakistan. Detais can be found on As usua, not a reviewers agreed with a that is written in the Report (nor did the authors agree with a that was suggested by the reviewers!). The product is entirey the responsibiity of the authors and shoud not be attributed to the reviewers. The Word Bank woud ike to acknowedge Oxford University Press India s hep in editing the Report. The financia support provided by Roya Netherands Government for the preparation and printing of this Report through Bank-Netherands Water Partnership Program and Bank-Netherands Water Support Program for Pakistan is gratefuy acknowedged. v

6 Contents PAKISTAN S WATER ECONOMY TABLE OF CONTENTS PREFACE OVERVIEW AND EXECUTIVE SUMMARY v xiii 1. THE PROCESS FOLLOWED 1 2. THE CHALLENGES AND ACHIEVEMENTS OF THE PAST 3 The Chaenges 3 The Response Pubic Infrastructure 8 The Response Private Infrastructure 13 The Response Institutions THE CHALLENGES OF THE PRESENT AND 23 THE NECESSARY RESPONSES Adjusting to the Needs of a Changing Pakistan 23 Preparing for Cimate Change 26 Adapting to Scarcity: An Imminent Water Gap 28 Getting more Product per Drop: The Performance Gap 29 Narrowing the Trust Gap 36 Maintaining the Resource Base Groundwater 4 Maintaining the Resource Base Sainity Management 47 Reversing Large Scae Environmenta Degradation 52 Living with Foods 57 Renewing Existing Infrastructure: Addressing the Maintenance Gap 6 Investing in Priority New Infrastructure WHAT NEEDS TO BE DONE 73 Principes for a Modern Institutiona Structure 73 Instruments 74 Unbunding and Competition 75 Reguation 78 Water Entitements 8 vii

7 Contents Transparency 84 Knowedge 85 Financing 87 What this means for Federa and Provincia Governments PRINCIPLED PRAGMATISM AND RULES FOR REFORMERS 92 Rue #1: Water is Different 92 Rue #2: Initiate Reform where there is a Powerfu Need and 93 Demonstrated Demand for Change Rue #3: Invove those Affected, and Address their Concerns with 94 Understandabe Information Rue #4: Reform is Diaectic, not Mechanica 95 Rue #5: It s Impementation, Stupid 96 Rue #6: Deveop a Sequenced, Prioritized List of Reforms 96 Rue #7: Be Patient and Persistent 96 Rue #8: Pick the Low-hanging Fruit First Nothing Succeeds ike Success 96 Rue #9: Keep Your Eye on the Ba Don t aow the Best to 97 become the Enemy of the Good Rue #1: There are no Siver Buets 97 Rue #11: Don t throw the Baby out with the Bathwater 98 Rue #12: Reforms must Provide Returns for the Poiticians 98 who are Wiing to make Changes 6. THE EVOLVING ROLE OF THE WORLD BANK 1 What the Bank has Done in the Past 1 Water Resources and Irrigation 1 Hydropower 114 Water Suppy and Sanitation 115 The Bank s New Water Strategy 118 An Indicative Word Bank Water Investment Program for The Four Piars 118 The Investment Projects 123 Anaytic and Advisory Services 125 Evoving Priorities and the Indicative Bank Water Investment Program 125 BACKGROUND PAPERS IN THE ENCLOSED COMPACT DISC viii

8 Figures, Tabes, Boxes FIGURES Figure 1 Pakistan from space xiii Figure 2 The Indus Waters Treaty (196) xiv Figure 3 Rates of return on investment on infrastructure and management of water resources xiv Figure 4 Word s most water-stressed countries xv Figure 5 Decining per capita avaiabiity of water in Pakistan (cubic meters per capita per year) xv Figure 6 Annua cana diversions and escapages to the sea xvi Figure 7 The quaity (Chemica Oxygen Demand) of urban streams xvi Figure 8 Predicted changes in Indus fows just above Tarbea xvii Figure 9 Storage per capita in different semi-arid countries xix Figure 1 Days of average fow which reservoirs in semi-arid countries can store in different basins xix Figure 11 Storage-additiona yied curve for the Indus xix Figure 12 Sedimentation and storage capacity xx Figure 13 Wheat yieds per unit of and and water xx Figure 14 Crop production and drought xxii Figure 15 Benefits from Tarbea ( ) xxii Figure 16 The effect of Bhakra Dam on different socia groups xxiii Figure 17 The deveopment of economicay feasibe hydropower potentia in Pakistan in internationa context xxiii Figure 18 The goba po resuts for South Asia xxviii Figure 19 Word Bank ending to Pakistan for water-reated sectors past and prospective xxviii Figure 1.1 The Water CAS Process 1 Figure 2.1 Word s most water-stressed countries 3 Figure 2.2 Decining per capita avaiabiity of water in Pakistan (cubic meters per capita per year) 4 Figure 2.3 Indus Basin irrigation system 5 Figure 2.4 A typica cana command in the Indus system 6 Figure 2.5 Food osses in Pakistan 6 Figure 2.6 The Indus water cana system at Partition in Figure 2.7 The change in groundwater eves 8 Figure 2.8 The Indus Waters Treaty (196) 9 Figure 2.9 Benefits from Tarbea ( ) 1 Figure 2.1 Average number of empoyment for adut casua aborers each month 11 Figure 2.11 The effect of irrigation and green revoution on income 12 Figure 2.12 The effect of Bhakra Dam on different socia groups 12 Figure 2.13 Income gains from directy and indirecty impacted sectors Bhakra Dam 12 Figure 2.14 The rise in groundwater eves ( ) 14 ix

9 Figures, Tabes, Boxes Figure 2.15 Irrigation expansion and groundwater eves 14 Figure 2.16 The growth in use of tubewes 16 Figure 2.17 Quantities and vaues of irrigation suppies in Punjab, by source 16 Figure 2.18 Rates of return on investment on infrastructure and management of water resources 2 Figure 3.1 Empoyment generation by crop 24 Figure 3.2 Popuation growth in Pakistan 24 Figure 3.3 Urban popuation growth in absoute numbers 25 Figure 3.4 Proportion of GDP in manufacturing 25 Figure 3.5 Prevaence of poverty in Pakistan 25 Figure 3.6 Accumuated effects of degaciation on Indus river fows over ten decades 26 Figure 3.7 Change in South Asia summer rainfa predicted by nine Genera Circuation Cimate Modes 27 Figure 3.8 Predicted change in number of rainy days from the decreased rainfa IPCC mode 27 Figure 3.9 Predicted change in rainfa intensity (in mm per day) from the decreased rainfa IPCC mode 27 Figure 3.1 Annua cana diversions and escapages to the sea 29 Figure 3.11 Projected demand for water 3 Figure 3.12 Wheat yieds per unit of and and water 3 Figure 3.13 Drought effect on yieds 3 Figure 3.14 Crop production and drought 31 Figure 3.15 Crop yieds for head- and tai-enders 31 Figure 3.16 Returns to irrigation ocation in a cana 32 Figure 3.17 Differences in wheat yieds across distributaries 32 Figure 3.18 Yied and water productivity of wheat under different irrigation scheduing strategies 32 Figure 3.19 Production (kg/cubic meter of water) under different agricutura practices 34 Figure 3.2 Cubic meters of water to produce a ton of produce 36 Figure 3.21 Punjab cana entitements from the 1991 Water Accord 38 Figure 3.22 Irrigation expansion and groundwater eves 4 Figure 3.23 The growing roe of groundwater irrigation 41 Figure 3.24 Punjab water baance: norma year (MAF) 41 Figure 3.25 Punjab water baance: drought year (MAF) 42 Figure 3.26 Decining groundwater tabe in Punjab 42 Figure 3.27 Effect of the depth to the water on ast of pumping 42 Figure 3.28 Depth of water tabe by province 43 Figure 3.29 Arsenic in groundwater in Punjab 45 Figure 3.3 Arsenic in groundwater in Sindh 46 Figure 3.31 Long-term trends in severe waterogging 48 Figure 3.32 Sainity eves by province 49 Figure 3.33 Cana diversions and waterogging in Sindh 49 x

10 Figures, Tabes, Boxes Figure 3.34 Approximate current sat baance in the Indus Basin (miion tonnes a year) 5 Figure 3.35 Pakistan s wetand resources 53 Figure 3.36 The quaity (Biochemica Oxygen Demand) of urban streams 56 Figure 3.37 The quaity (Chemica Oxygen Demand) of urban streams 56 Figure 3.38 The Kuznets curve for environmenta quaity 57 Figure 3.39 Food osses in Pakistan 58 Figure 3.4 The financing of water services in Pakistan 62 Figure 3.41 Depeting Pakistan s infrastructure stock 63 Figure 3.42 Storage per capita in different semi-arid countries 63 Figure 3.43 Days of average fow which reservoirs in semi-arid countries can store in different basins 64 Figure 3.44 Sedimentation and storage capacity 64 Figure 3.45 Storage-additiona yied curve for the Indus 65 Figure 3.46 Benefits from Basha and Kaabagh 65 Figure 3.47 Deveopment of economicay-feasibe hydropower potentia in Pakistan in internationa context 65 Figure 3.48 Partia environmenta and socia indicators for some mutipurpose dams 66 Figure 3.49 Who benefits from new Indus storage? 67 Figure 3.5 Urban water suppy coverage 69 Figure 3.51 Rura water suppy coverage 69 Figure 3.52 Improved water suppy coverage 7 Figure 3.53 Improved sanitation coverage 7 Figure 4.1 The desired evoution of functions and actors 74 Figure 4.2 The basis for sound irrigation service provision 74 Figure 4.3 Typica pubic and private roes in the provision of infrastructure 76 Figure 4.4 Participants in modern reguation 79 Figure 4.5 Indicative, sequenced, and prioritized timetabe for impementation of a forma water entitement system 83 Figure 4.6 Systems modes for panning and management 86 Figure 4.7 From ow-eve to high-eve equiibrium in Conakry 88 Figure 6.1 Word Bank ending to Pakistan for water-reated sectors ( ) 11 Figure 6.2 Househod income of famiies at Ghazi Barotha Hydropower Project before and after resettement 115 Figure 6.3 The goba po resuts for South Asia 119 Figure 6.4 Word Bank ending to Pakistan for water-reated sectors past and prospective 12 TABLES Tabe 1.1 List of background papers (avaiabe in the encosed compact disc) 2 Tabe 3.1 Wastewater treatment in the cities of Pakistan 55 xi

11 Figures, Tabes, Boxes Tabe 6.1 Bank assistance (196 7) 12 Tabe 6.2 Bank assistance (1971 8) 15 Tabe 6.3 Bank assistance (1981 9) 16 Tabe 6.4 Bank assistance (1991 2) 112 BOXES Box 2.1 The Water Accord of Box 3.1 How other distortions affect the water economy the case of sugarcane 35 Box 3.2 The Indus River System Authority (1992) 37 Box 3.3 Pubic information on Kaabagh Dam (an extract) 67 Box 4.1 Water entitements are the principa mechanism for ensuring efficiency, sustainabiity, and vountary reaocation of water 81 xii

12 Overview and Executive Summary OVERVIEW AND EXECUTIVE SUMMARY Pakistan is one of the word s most arid countries, with an average rainfa of under 24 mm a year. The popuation and the economy are heaviy dependent on an annua infux into the Indus river system (incuding the Indus, Jheum, Chenab, Ravi, Beas, and Sutej rivers) of about 18 biion cubic meters of water, that emanates from the neighboring countries and is mosty derived from snow-met in the Himaayas. Throughout history, peope have adapted to the ow and poory distributed rainfa by either iving aong river banks or by carefu husbanding and management of oca water resources. One of the greatest of human civiizations the Indus Vaey Civiization (Harappa and Mohenjodaro) fourished aong the banks of the Indus. This precarious, ow-eve baance between man and water was decisivey shifted with the advent of arge-scae irrigation technoogy in the nineteenth century. The Indus irrigation system became the argest contiguous irrigation system in the word. As shown in fig. 1, the desert iteray boomed, with irrigated agricuture providing the patform for the deveopment of the modern economy of Pakistan. This hydrauic economy has faced and surmounted three massive chaenges in the ast haf century. The first chaenge arose because the ines of partition of the Indo-Pak subcontinent severed the irrigated heartand of Punjab from the ife-giving waters of the Ravi, Beas, and Sutej rivers. In an unprecedented triumph of water dipomacy, Pakistani engineers, together with their Indian counterparts and The Word Bank, negotiated the Indus Waters Treaty, giving Pakistan rights in perpetuity to the waters of the Indus, Jheum, and Chenab rivers, which comprise 75 percent of the fow of the whoe Indus system. The second chaenge was that there was now a mismatch between the ocation of Pakistan s water (in the western rivers) and the major irrigated area in the east. Again Pakistan s water engineers were up to the task, buiding the word s argest earthfi dam, the Tarbea on the Indus, and ink canas, which ran for hundreds of mies and carried fows ten times the fow of the river Thames (fig. 2). To a considerabe degree (but not competey) the heroic stage of water engineering in Pakistan was now over the major chaenges were now those of management. This is the case in a countries (fig. 3). But in the case of Pakistan, however, the heroic era had invoved particuary bunt affronts to the iving organism that the river represents. The natura fow regime was dramaticay atered: rivers which had previousy meandered over wide pains were now confined within narrow channes; sediments which had previousy nourished the Fig. 1: Pakistan from space Source: NASA, xiii

13 Pakistan's Water Economy Fig. 2: The Indus Waters Treaty (196) Source: The Word Bank. Fig. 3: Rates of return on investment on infrastructure and management of water resources Returns on Investment Deveoping Infrastructure Investments Type 1 Type 2 Type 3 Source: The Word Bank, 23. Management Investments Deveoped deta were trapped; and vast quantities of water were disgorged onto deserts, substantia parts of which were of oceanic origin and highy saine. It was this ast reaity which gave rise to the third major chaenge facing Pakistan shorty after Independence. Hundreds of biions of cubic meters of water were now stored in the naturay deep aquifers of Punjab aone. In many areas water tabes had reached the eve of the and, giving rise to the twin curse of waterogging and sainity. In the eary 196s it appeared that Pakistan was doomed, ironicay, to a watery, saty grave. With equa doses of good thinking, good panning, and good uck, this probem is now not beaten (nor wi it ever be) but controed and managed, to a degree that no one foresaw fifty years ago. The good thinking was the appication of water science and economics by many of Pakistan s best and brightest in conjunction with many of the best water minds in the word. The soution was not the obvious one of ining canas and putting ess water on the and but of increasing the use of groundwater, thus both increasing evapotranspiration, drawing down the groundwater tabe and eaching much of the sats down and out of the root zone. The good thinking and good panning were cassic pubic goods. The good uck driver of this revoution was the modest but transforming tubewe and diese engine, bought and managed by miions of farmers for the simpe reason that this decentraized ondemand source of water enabed them to greaty increase their crop yieds and incomes. So the modern history of water deveopment and management in Pakistan is one in which the gass can be seen as more than haf fu. But, as this Report wi show, the gass can aso be viewed as much more than haf empty too. Once again, the surviva of a modern and growing Pakistan is threatened by water. The facts are stark. Sobering Fact #1: Water Stress. Pakistan is aready one of the most water-stressed countries in the word (fig. 4), a situation which is going to degrade into outright water scarcity (fig. 5) due to high popuation growth. Sobering Fact #2: There is no additiona water to be injected into the system. There is no feasibe intervention which woud enabe Pakistan to mobiize appreciaby more water than it now uses. Arguaby, as shown graphicay in fig. 6, overa use for irrigation needs to decine so that there are adequate fows into the degrading deta. xiv

14 Overview and Executive Summary Fig. 4: Word's most water-stressed countries Source: Fig. 5: Decining per capita avaiabiity of water in Pakistan (cubic meters per capita per year) Water stress 15 1 Water scarcity Source: Amir, 25. Sobering Fact #3: A high risk water environment. Pakistan s dependence on a singe river system means it has itte of the robustness that most countries enjoy by virtue of having a mutipicity of river basins and diversity of water resources. Whie India (for exampe) might be abe to mudde through because it has many rivers and if something goes wrong in one pace the effect is cushioned by opportunities in other paces, this is a uxury which Pakistan does not have. If the water/ sediment/sat system of the Indus Basin goes bady wrong, then it may prove disastrous. Hence, there is no atitude for error. Sobering Fact #4: Large-scae degradation of the resource base. There is abundant evidence of widescae degradation of the natura resource base on which the peope of Pakistan depend. Sainity remains a major probem, with some aspects partiay controed but others incuding the fate of the approximatey 15 miion tons of sat which are accumuating in the Indus Basin every year, and the ingress of saine water into over-pumped freshwater aquifers remain ony dimy understood threats. And the deta, deprived of the water and xv

15 Pakistan's Water Economy 2 Fig. 6: Annua cana diversions and escapages to the sea 15 Fows (MAF) Years Existing cana diversion Escapages to the Sea Source: The Word Bank, 23. sit which buit and sustained it, is degrading rapidy, with arge human and environmenta consequences. Simutaneousy, there is arge-scae uncontroed poution of surface water and groundwater from the increasing quantities of pesticides and fertiizers used in agricuture and by rapidy growing cities and industries. Major cities have inadequate sewage treatment pants. Many are either nonfunctiona or working poory. And there is ony one industria common effuent treatment pant working in the whoe of the country. The resut, as iustrated in fig. 7, is the presence of heaviy degraded surface water around a cities and towns. Sobering Fact #5: Groundwater is now being overexpoited in many areas, and its quaity is deteriorating. Over the past forty years, the expoitation of groundwater, mosty by private farmers, has brought enormous economic and environmenta benefits. A aissez-faire approach coud be appropriate during this era. Groundwater Fig. 7: The quaity (Chemica Oxygen Demand) of urban streams COD mg/ Source: Zakaria, 25. Nationa standard Urban streams in different cities now accounts for amost haf of a irrigation requirements. Now, athough, there is cear evidence that groundwater is being over-expoited, yet tens of thousands of additiona wes are being put into service every year. In the barani (rainfed) areas of Baochistan, farmers are pumping from xvi

16 Overview and Executive Summary depths of hundreds of meters and in the sweet water areas of the Indus Basin, depetion is now a fact in a cana commands. Furthermore, there are serious and growing probems with groundwater quaity, a reaity that is ikey to get worse because there are 2 miion tonnes of sat accumuating in the system every year. Pakistan has thus entered an era in which aissez-faire becomes an enemy rather than a friend. There is an urgent need to deveop poicies and approaches for bringing water withdrawas into baance with recharge, a difficut process which is going to require action by government and by informed and organized users. Since much groundwater recharge in the Indus Basin is from canas, this requires an integrated approach to surface water and groundwater. There is itte evidence that government (or donors, incuding The Word Bank) have re-engineered their capacity and funding to dea with this great chaenge. And here deay is fata, because the onger it takes to deveop such actions, the greater woud become the depth of the groundwater tabe, and the higher woud be the costs of the equiibrium soution. Sobering Fact #6: Fooding and drainage probems are going to get worse, especiay in the ower Indus Basin. The natura state of heaviy-sit-aden rivers (ike the Indus) is to meander. This is because as sit-buids up in their beds, the rivers seek ower ands and change their courses. This creates havoc with human settements and so, throughout the word, such rivers have been trained and confined by embankments within reativey narrow beds. But as with everything watery, soving one probem gives rise to another. In this case, the bed keeps getting higher and higher, and soon the river is, as in the ower parts of Sindh, above the eve of the and. (To some degree the trapping of sit in upstream reservoirs aeviates this particuar environmenta hazard.) Over time, the ikeihood of embankment breaching increases, as do the probems of drainage from fooded ands. When this coincides with unfavorabe tida conditions, the consequences can be disastrous. Sobering Fact #7: Cimate change. The Indus Basin depends heaviy on the gaciers of the western Himaayas which act as a reservoir, capturing snow and rain, hoding the water and reeasing it into the rivers which feed the pain. It is now cear that cimate change is aready affecting these western gaciers in a dramatic fashion (far more seriousy, for exampe, than in the damper eastern Himaayas). Whie the science is sti in its infancy, best estimates (fig. 8) are that there wi be fifty years of gacia retreat, during which time river fows wi increase. This especiay in combination with the predicted fashier rainfa is ikey to exacerbate the aready serious probems of fooding and draining, especiay in the ower % change Fig. 8: Predicted changes in Indus fows just above Tarbea Indus at Bisham Qia Source: Rees, degc/yr +.6 degc/yr +.1 degc/yr +.15 degc/yr Decade in the future parts of the basin, in the next few decades. But then the gacia reservoirs wi be empty, and there are ikey to be dramatic decreases in river fows as shown in fig. 8, conceivaby by a terrifying 3 percent to 4 percent in the Indus Basin in one hundred years time. Sobering Fact #8: An inadequate knowedge base. The Indus Basin is a singe, massive, highy compex interconnected ecosystem, upon which man has eft a huge footprint. When a dam or barrage is constructed the water and sediment cyces are changed dramaticay. When water is xvii

17 Pakistan's Water Economy diverted onto deserts, the water and sat baances seek new equiibriums. In a system so massive and compex, the generation and smart use of knowedge are the keys to adaptive management. But there has been very itte investment in Pakistan in buiding this knowedge base and the accompanying institutiona and human systems. The past twenty years shoud have been ones of massive investment in knowedge about this ecosystem. But the reverse has happened, and even the once-renowned Pakistan water panning capabiity has faen into disrepair. The country is iteray fying bind into a very hazardous future. Sobering Fact #9: Much of the water infrastructure is in poor repair. Pakistan is extraordinariy dependent on its water infrastructure, and it has invested in it massivey. Due to a combination of age and what has apty been caed the Buid/ Negect/Rebuid phiosophy of pubic works, much of the infrastructure is crumbing. This is true even for some of the major barrages, which serve miions of hectares and where faiure woud be catastrophic. There is no modern Asset Management Pan for any of the major infrastructure. Sobering Fact #1: The quaity of project impementation is poor. Pakistan is justifiaby proud of its outstanding achievement in buiding the Indus Basin Repacement Works. In the intervening years, the quaity of project impementation has decined substantiay. Today, impementation of water sector projects in Pakistan is characterized by inefficiencies, competion deays, and time and cost overruns. Factors that affect impementation incude: weak impementation panning and management, itigation reated to and acquisition, noncompiance with agreed resettement and rehabiitation programs, ack of attention to environmenta issues, deays in procurement, deays in preparation of accounts and carrying out audits, and ack of preparation for transition from construction to operation. Sobering Fact #11: The system is not financiay sustainabe. There are three basic questions reevant to the financing of infrastructure who pays? how much is paid? and how is the money used? In terms of who pays, there are many reasons why a substantia portion of the costs of pubic works which provide individua services (such as irrigation water) shoud be paid for by those who get the service. But in Pakistan users of cana water pay a very sma part of the bi, which is basicay paid by the taxpayer. In terms of how much is paid, the answer is: much ess than the presenty configured institutions require for rehabiitation and maintenance of the assets and for operations. The resut is that most infrastructure is in poor repair. In terms of how is the money used the answer is that first ca is for payment of heaviy overstaffed bureaucracies, whose productivity is ow and whose appetite eaves insufficient funds for system maintenance and operation. This reaity gives rise to a vicious circe, in which users are not wiing to pay for poor and unaccountabe services, which means that insufficient funds are avaiabe for operations and maintenance, which resuts in the decine of service quaity and whereupon users are even ess wiing to pay, and so on. Sobering Fact #12: Pakistan has to invest, and invest soon, in costy and contentious new arge dams. When river fow is variabe, then storage is required so that the suppy of water can more cosey match water demands. Reative to other arid countries, Pakistan has very itte water storage capacity. Figure 9 shows that whereas the United States and Austraia have over 5 cubic meters of storage capacity per inhabitant, and China has 22 cubic meters, Pakistan has ony 15 cubic meters of storage capacity per capita. And fig. 1 shows the storage capacity avaiabe in some of the major arid basins in the word. The dams of the Coorado and Murray-Daring rivers can hod 9 days of river runoff. South Africa can store 5 days in its Orange river, and India between 12 and 22 days in its major peninsuar rivers. By contrast, Pakistan xviii

18 Overview and Executive Summary Fig. 9: Storage per capita in different semi-arid countries cubic meters per capita USA Austraia China Spain Morocco India Pakistan Source: The Word Bank anaysis of ICOLD data. Fig. 1: Days of average fow which reservoirs in semi-arid countries can store in different basins Coorado Murray-Daring Orange Krishna Narmada Cauvery Ganga Ethiopia Indus Source: The Word Bank anaysis of ICOLD and GDRC data. can barey store 3 days of water in the Indus Basin. As shown in fig. 11, each miion acre feet (MAF) of storage capacity ost means one MAF/ year ess water that can be suppied with a given eve of reiabiity. And, as shown in fig. 12, there is an urgent need for storage just to repace the capacity that has (as predicted) been ost to sedimentation. Given the high sit oads from the young Himaayas, Pakistan s two arge reservoirs are (as predicted at design) siting reativey rapidy. Sobering Fact #13: Poor governance and ow trust. Conceptuay the simpest task for water managers in the Indus Basin is to move water in a predictabe, timey manner to those who need it and have a right to it. Pakistan has among the best water engineers in the word. And yet this task is done ess and ess satisfactoriy, ess in the ight of day and more behind an opaque curtain in which, as aways, monopoy + discretion accountabiity = corruption. The resut is inequitabe distribution of water, poor technica performance, and a pervasive environment of mistrust and confict from the provincia eve to the water course. The water bureaucracy has yet to make the vita menta transition (depicted in fig. 3) from buider to manager. Sobering Fact #14: Water productivity is ow. Large parts of Pakistan have good sois, abundant sunshine, and exceent farmers. And yet crop yieds, both per hectare and per cubic meter of water, are much ower than internationa benchmarks, and much ower even than in neighboring areas of India (fig. 13). The quaity of water service pays an important roe in this: yieds from reiabe, sefprovided groundwater are twice those of unreiabe and infexibe cana suppies. In water matters, the cup is aways haf empty, but it is aso haf, or, in the case of Pakistan, at east a quarter, fu. In confronting these awesome chaenges, Pakistan has considerabe strengths, too. Fig. 11: Storage-additiona yied curve for the Indus Additiona yied in MAF/year Current storage eve 1 2 Storage MAF Source: Lieftinck, xix

19 Pakistan's Water Economy Fig. 12: Sedimentation and storage capacity MAF from Tarbea, Manga and Chasma 2.9 MAF from Manga raising 6 MAF from Kaabagh or Basha 18 MAF Storage in MAF MAF of current capacity 1.4 MAF Source: The Word Bank, 23. Fig. 13: Wheat yieds per unit of and and water Tons/ha yied Kg/m3 1 6 Tons/ha Kg/cubic meter Imperia Vaey, USA Bhakra, India Punjab, Pakistan Source: Ahmad, 25. xx

20 Overview and Executive Summary Hopefu Fact #1: A we-estabished tradition and system of water entitements. Pakistan has an unusuay ong and we-estabished tradition of water entitements. At the internationa eve, Pakistan s rights to water from the Indus Basin system are unambiguousy defined in the Indus Waters Treaty. The 1991 Water Accord is a major achievement, which estabishes cear entitements for each province to surface water. Impicit in the Water Accord, too, is a set of water entitements at the cana command eve (estabished on the basis of historic use). In arge areas of the system, these entitements serve as the basis for aocation of water among cana commands. There are aso we-estabished rues for further distributing water to the distributary and outet eves. Beow the outets, the warabandi is a proxy (appropriate in its era) to a water right, in which a farmer has a right to time, a surrogate for water. The existence of such we-estabished entitements means that Pakistan can now focus on: putting in pace a simiar system for the surface systems that do not currenty have such estabished entitements; extending the entitement system to cover any new water that might be mobiized; formaizing entitements for environmenta fows (incuding to the deta); and moving towards a simiar definition of entitements for groundwater, and, above a, administering this system in a more transparent, participatory manner. Hopefu Fact #2: Pakistan has argey avoided the trap of subsidizing eectricity for groundwater pumping. One of the obvious ways governments around the word address the probem of agricutura distress is to subsidize inputs. In many countries, eectricity for irrigation pumping is heaviy subsidized. This poicy greaty exacerbates the underying probem, which is making sure that groundwater pumping does not exceed recharge, and that the water tabe is not too deep. To date, this poicy has been foowed ony in Baochistan, with disastrous effects both on the water tabe and on the financia state of the utiity, and for pumping from pubic wes in Sindh. At present, the poitica pressure for free power has been muted because the water tabe is shaow and most pumps are diese-powered. The federa and provincia governments shoud be appauded for their stance to date, and shoud continue to strongy resist pressures to move towards free power for irrigation in the future. Hopefu Fact #3: There is much scope for increasing water productivity. The fip side of current ow water productivity is that Pakistan can get much more product crop, jobs, and income per drop of water. As shown in fig. 14, reduced water suppies in the irrigated areas have itte detrimenta impact on production (at east in the short run), in part because groundwater is avaiabe to make up the difference in the short run, in part because waterogging and sainity are reduced, and in part because imited water suppies are used more carefuy when there are shortages. But the bottom ine is that this shows that it is quite possibe to substantiay increase production with existing suppies of water. A second, very important, factor is the emergence of a new cass of progressive farmers, who are shifting to highvaue crops (which produce far more income and jobs per unit of water), introducing new crops and agricutura technoogies, and putting unprecedented pressures on the irrigation departments to become more accountabe and efficient. Hopefu Fact #4: High returns from previous major water infrastructure. Pakistan benefited immensey from the major water infrastructure buit in the Indus Basin. As shown in fig. 15, the benefits from Tarbea substantiay exceeded those which were predicted at the time of construction. Through forward and backward inkages in the economy, the tota benefits were probaby about twice those of the direct power and irrigation benefits. It is aso certain that, as has been shown for the Bhakra project in Indian Punjab (fig. 15), it was the poor xxi

21 Pakistan's Water Economy Fig. 14: Crop production and drought ( Tons) 7, 6, 5, 4, 3, 2, 1, 1, Cana Diversion Sugarcane Tota Food Grain Wheat Rice Cotton Drought Onset Miion Acre Feet Years Source: The Word Bank, 23. who, through the operation of abor markets, were probaby the greatest beneficiaries of these investments. It is important to note that athough much of the discussion of such projects is in terms Miion 1998 US$ Fig. 15: Benefits from Tarbea ( ) Predicted Source: WCD, 2. Power Irrigation Actua of agricuture, in fact it is the power benefits which are often greatest (fig. 15). And here, too, as shown in fig. 17, Pakistan ags behind its neighbors 86 percent of the 5, MW of Pakistan s economicay viabe hydropower potentia has yet to be deveoped. Hopefu Fact #5: Pakistan has overcome major water chaenges in the past. Pakistan has a remarkabe history of successfuy confronting major water chaenges. It has enormous human capacity to confront this next round of chaenges, which can be pooed in four major categories. The sustainabe management of a huge, inter-inked, and very compex natura resource base is probaby the Chaenge 1 is to deveop a word-cass knowedge-based capacity for adaptive resource management and service deivery. xxii

22 Overview and Executive Summary Fig. 16: The effect of Bhakra Dam on different socia groups Landowners % change of income of different types of househods with and without Bhakra Dam Agr Labor Source: Bhatia, 25. Rura Non Agr Rura Others Urban singe most chaenging ong-term task for Pakistan and requires the deveopment of word-cass capacity in three reated areas. First are the natura sciences. Adaptive management of the Indus Basin system requires high eves of knowedge and understanding of a series of inked basic natura processes, the more important of which incude: the behavior of the gaciers as cimate change proceeds; the fate of the arge amounts of sat being mobiized; the quaitative and quantitative dimensions of the aquifer systems in the Indus Basin and in the other parts of the country; the evoution and behavior of the ecosystems of the deta; and the impact of changed sediment oads on river morphoogy. Second are the engineering sciences. The pumbing for the word s argest contiguous irrigation system has underpinned much of Pakistan s deveopment. Pakistan has ong been a word eader in hydrauic engineering, and it is going to have to renew this capacity so that a new generation can maintain and modernize the water transmission and distribution systems. The third eg of the inteectua stoo are the socia sciences. Because at the end of the day government is going to have to design institutions and instruments, which wi ensure that the actions of the miions of peope who ive in and off of the natura and engineered water systems are in consonance with the require-ments of those systems. Pakistan, accordingy, needs to buid a strong, natura, engineering and socia scientific Fig. 17: The deveopment of economicay feasibe hydropower potentia in Pakistan in internationa context 1% 9% 8% 7% Japan Europe North America 6% 5% 4% 3% 2% 1% % India Pakistan Africa China South America Source: The Word Bank, 23. xxiii

23 Pakistan's Water Economy cadre capabe of working with a users in defining the probem, deveoping soutions, monitoring, assessing, and adjusting. This is a capacity which requires a wide range of discipines those necessary for understanding cimate, river geomorphoogy, hydrauic structures, surface water and groundwater hydroogy, imnoogy, water chemistry, sediment management, hydrauics, soi sciences, terrestria and coasta ecosystems, agronomy, pant physioogy, industria organization, confict management, poitics, economics, and financing. In the past Pakistan has reied heaviy on outside knowedge, especiay in sciences. Now Pakistan needs to deveop its indigenous capacity and make a major push to estabish and nurture a new set of institutions that wi provide the scientific, technica, and poicy support for the management of increasingy scarce water. Experience in other countries shows that if this is not done there wi be serious economic, socia, and environmenta consequences. The water economy of Pakistan depends fundamentay on a gigantic and compex hydrauic infrastructure system. There are now a set of reated chaenges which have to be addressed how to maintain what has been buit, what major new system-wide infrastructure needs to be buit, what infrastructure needs to be buit for popuations who have not been served and for environmenta Chaenge 2 is a financiay feasibe approach to maintaining and modernizing existing infrastructure and buiding needed new water infrastructure. protection, and how to buid institutions that wi manage the resource effectivey in the ooming era of scarcity. First is rehabiitation and maintenance. Many eements of the vast hydrauic system are now reaching the end of their design ives, and have to be rebuit. There is an enormous backog of deferred maintenance. Most recent irrigation and water suppy investments from donors, incuding the Word Bank, have been for the rehabiitation of poory maintained systems. There is no systematic Asset Management Pan at either the federa or provincia eves which describes the condition of the assets, the requirements for repacement, rehabiitation (or retirement) and operations and maintenance and the associated costs, and the proposas for financing of these costs. Deveopment of such pans is a high priority. Second is the urgent need for construction of major new storage on the Indus. There is probaby no more contentious an issue in Pakistan today. In part, this is for egitimate and necessary reasons (such as the resettement of substantia numbers of peope), partiay for egitimate but resovabe reasons (ack of transparency about how this woud affect the actua aocation of waters among the provinces and to the deta), and partiay the discussion of dams has become a vehice for a host of remotey or unreated poitica grievances. A curiosity is that the most vehement opposition to new dams comes from Sindh, when in fact it is the downstream riparian who is typicay the greatest beneficiary of the enhanced reguation which comes with new storage. (For this reason, in other countries ower riparians wi often pay for upstream storage.) The requirements for government are obvious there needs to be a totay transparent and verifiabe impementation of the 1991 Water Accord, and reasonabe quantities of water need to be guaranteed and deivered to the deta (as was discussed as part of the Indus Treaty negotiations). Equay important is a we-designed pan for paying for the costs of this storage, with the very arge hydropower potentia offering possibiities for raising substantia amounts of private financing. Third, there is requirement for arge investments in meeting the needs of those who do not have water and sanitation services in cities, towns, and viages. Fourth, Pakistan has been accumuating an environmenta debt by not investing in municipa and industria wastewater. It is cear that this has to change, and that it is going to take huge investment. xxiv

24 Overview and Executive Summary Fifth and finay, Pakistan has to wak on two egs investing simutaneousy in infrastructure, and in deveoping the institutions required for the sustainabe management of increasingy scarce water. The resource requirements for a of these priorities are very arge. Government faces three essentia tasks. First, to set priorities for the short and medium term. Second, to define the principes which wi govern what proportions of the initia and recurrent costs are paid by taxpayers and by users. Third, government has to ensure that the imited financia resources are efficienty used. This is obviousy not happening in the business-asusua mode at present. It is going to mean exporing a whoe set of mechanisms for introducing competition, for paying for output not inputs, and for increasing accountabiity. The agrarian economy of Pakistan accounts for about 25 percent of GDP and empoys about haf of the abor force. Whie the transition to an urban and industria economy can and must continue, agricuture wi remain centra for the we-being of arge numbers of peope. Better water management is a key constraint to improving agricutura productivity and generating jobs. Over the past severa decades, farmers have argey taken the probem into their own hands, and soved it by sinking hundreds of thousands of tubewes which provide just-in-time water for their crops. To a substantia degree the main function of the Chaenge 3 is to put in pace a modern institutiona framework, with the key task being the deveopment and appication of instruments which wi motivate sustainabe, fexibe, and productive use of water. cana systems has been to recharge the groundwater about 8 percent of groundwater abstractions in Punjab come from recharge from canas. The surviva of the water economy over the ast severa decades has argey been despite rather than because of the state it has been the tapping of the unmanaged groundwater by miions of farmers, by towns and viages and industries that have pued the economy through. It is cear that this era of productive anarchy is now coming to an end, since groundwater is now being over-tapped in many areas (incuding both the Indus Basin and Baochistan and other non- Indus areas). This poses two major chaenges to the state. First, surface water suppy systems are going to resume their previous high importance, and need to be managed much more accountaby and effectivey. Second, groundwater wi have to be managed for reated reasons of quantity and quaity much more aggressivey than has been the case in the past. It is aso obvious that the needs for water are changing substantiay, as a resut of agricutura diversification, urbanization, industriaization, recognition of environmenta needs, cimate change, and the evoution of the natura resource base. Since there wi be, if anything, ess rather than more water, it means that the new water economy is going to have to be one which is much more fexibe, in which a key wi be the vountary reaocation of water from those who need it ess to those who need it more. It is going to require a very different type of state machinery at both the federa and provincia eves to meet these chaenges. In constructing this new water state, the focus must be primariy on instruments which govern the reationships of different users with water, and with each other. The ogica organizationa architecture then is that which is required to manage the instruments and order the reationships between the parties. Some of the key eements of the new water state wi be: Introducing accountabiity, efficiency, transparency, and competition into the surface water suppy business. This wi mean unbunding the business into buk transmission and distribution enterprises, with reations among the parts governed by contracts which specify the rights and responsibiities of both parties. Whie it wi xxv

25 Pakistan's Water Economy not be easy to enforce such contracts, experience shows that this can stimuate improved accountabiity and service quaity. This wi mean moving away from a monoithic service mode beow the distributaries (with Farmers Associations competing for the market with the irrigation department) and into the cana commands (where a variety of forms of pubic-private partnerships can provide an aternative to the irrigation department). In many cases, professionas from the irrigation departments woud be encouraged to form private businesses for the provision of such services, thus ensuring that their skis are not ost, and that they do not see the changes as purey a oss of security. The buk business (operation of dams and barrages) woud probaby remain in state hands, but with many major functions (such as operation of power pants) concessioned out to private operators. A simiar institutiona architecture woud pertain for the drainage infrastructure. In such a system (which woud take pace as a sequenced and prioritized process over many years) the government woud, graduay, pay a very different roe. It woud corporatize the state-owned operating units and deveop new capacities to do the economic reguation. The government woud aso be far more active in groundwater management, where it has been argey absent. This woud mean deveoping a new ega and reguatory framework for comanaging groundwater with user associations. It woud mean deveoping the sophisticated natura resource management capacity required for managing water and and systems. A centerpiece of these systems, both surface water and groundwater, woud be improving the administration of a we-estabished system of water entitements. What is now needed is finaization of the agreement on environmenta fows into the deta (a process that is underway) and then impementation of the Accord in a transparent manner, audited by an auditor who is, and is perceived to be, neutra. The same system then needs to be dried down to the cana commands within the provinces (where entitements are mosty we estabished but not transparenty administered). And so on down a the way to the users associations and eventuay to the farmers. There is broad agreement among most water professionas in Pakistan that this improved administration is quite feasibe and that it woud increase efficiency, aow fexibiity in adapting to scarcity, reduce confict, and insta trust in the system. A simiar, and even more difficut, process is essentia for the management of groundwater quantity and quaity, since groundwater reservoirs are aready being mined in the barani and sweet water areas. Again, this wi take a we thought-out, pragmatic, patient, and persistent strategy. The centra eements wi be heavy invovement of users, substantia investments in modern water and agricutura technoogy, and the state paying a vita roe as deveoper of the enabing egisation, reguator, and provider of knowedge and decision support systems. In the eyes of many the idea of such a modern, accountabe Pakistan water system is pangossian, given the deteriorating performance in recent decades and the broader chaenges of governance. The gass is, of course, aways haf empty. But it is haf fu too. Pakistan has a stronger base for doing this than most other deveoping countries, and there are some important signs that the need for change is being understood, there are poitica eaders who are starting to grappe with these reaities, and the Chaenge 4 is to trace a principed and pragmatic path for impementing this reform agenda over the coming decades. xxvi

26 Overview and Executive Summary government and private sector eaders are taking the important first steps down this ong and winding road. Pakistan is fortunate, too, in that it is not the first country in the word to face this (daunting) set of chaenges. The experiences of other countries suggest that there are a set of rues for reformers in undertaking such a transition. These rues incude: Initiate reform where there is a powerfu need and demonstrated demand for change. Invove those affected, and address their concerns with effective and understandabe information. If everything is a priority, nothing is a priority hence deveop a prioritized, sequenced ist of reforms. Pick the ow-hanging fruit first nothing succeeds ike success. Keep your eye on the ba don t et the best become the enemy of the good. Be aware that there are no siver buets. Don t throw the baby out with the bathwater. Treat reform as a diaectic, not mechanica, process. Understand that a water is oca and each pace is different one size wi not fit a. Be patient, persistent, and pragmatic. Ensure that reforms provide returns to poiticians who are wiing to make changes. Water is far from a simpe commodity Water s a socioogica oddity Water s pasture for science to forage in Water s a mark of our dubious origin Water s a ink with a distant futurity Water s a symbo of ritua purity Water is poitics, water s reigion Water is just about anyone s pigeon Water is frightening, water s endearing Water s a ot more than mere engineering Water is tragica, water is comica Water is far from the Pure Economica Kenneth Bouding Recognize that water, unike eectricity or teecommunications, is far from a simpe commodity. An important objective of this Report is to hep define the water eements of the How the Word Bank might be a more effective deveopment partner. framework, known as the Country Assistance Strategy (CAS) which wi govern the reationship between The Word Bank and Pakistan for the period This is an iterative process, in which there have aready been many discussions invoving the federa and provincia governments, the Bank s country management and the Bank s Pakistan water team. Whie the fina agreement on water wi ony be decided jointy with the other eements of the CAS, the contours of this agreement are aready broady cear. The federa and provincia governments and the management of The Word Bank a agree that water management is one of the centra deveopment chaenges facing Pakistan, and that it is an area where the Bank has a ong history and a strong comparative advantage. This is in broad agreement with the findings of a major po of a wide variety of South Asian stakehoders (fig. 18), which concuded that infrastructure, education, and governance were the three areas which were both of high nationa importance and where the Bank was perceived to have a comparative advantage. There is, therefore, a genera agreement that there wi be a major increase in Bank ending for water-reated activities, with the indicative overa figures shown in fig. 19. This woud mean that water-reated ending for Pakistan woud increase about tenfod from the 2 4 period, and account for about $1 biion in the coming four years. Word Bank support woud be based on principed pragmatism, recognizing that reforms and investments must proceed in parae and the best shoud not be xxvii

27 Pakistan's Water Economy Fig. 18: The goba po resuts for South Asia 2 Education 15 Governance Deveopment Priority 1 Infrastructure 5 Socia Civi Soc Heath ronment Priority that shoud be given by the Bank Source: The Word Bank, 22. Fig. 19: Word Bank ending to Pakistan for water-reated sectors past and prospective Major Infrastructure Foods Rura WS&S % of a Bank ending Irrigation and Drainage Urban WS&S Hydro 6 Miions of 24 5 US$/year % 4% 3% 2% 1% % of a Bank ending Source: The Word Bank, 24. xxviii

28 Overview and Executive Summary aowed to become the enemy of the good. Broady speaking, Bank assistance woud support four piars of the water sector, as described beow: Piar 1: Asset Deveopment and Management Pakistan has a arge endowment (with an estimated repacement vaue of US$6 to 7 biion) of water resources infrastructure, most owned and managed by the provinces, and much now quite od. Bank-funded projects wi make major investments in rehabiitation of some critica assets (incuding barrages) and wi hep put in pace Asset Management Pans which wi set priorities for asset rehabiitation and maintenance, make expicit the requirements for pubic and user financing, and deveop efficient institutiona arrangements for rehabiitating and maintaining this infrastructure. The Bank wi aso continue its support for: deveoping and impementing a drainage and sat management strategy, other investments incuding sma dams, minor irrigation, and groundwater management in barani areas outside the Indus Basin, as we as for improving iveihoods and safety in coasta areas. One major issue that is ikey to emerge in the 26 1 CAS period is possibe Bank engagement in deveoping and co-financing major new Indus Basin storage and hydro, if and when the government makes such a decision. The government is activey addressing some of the major issues which have been raised about a new dam on the Indus, incuding transparent impementation of the 1991 Water Accord and environmenta fows into the deta. In discussions with the government it has been agreed that the Bank coud be invoved, with the usua provisions that any such project met the Bank s norma technica, economic, socia, and environmenta standards, and that these investments were part of an overa program which incuded institutiona reforms and investments at federa, provincia, cana command, and farm eves to ensure better use of water. Piar 2: Water Resources Management The Bank expects to support deveopment of capacity at the provincia and federa eves for improving water and associated natura resource management. For surface water suppies, a major emphasis wi be buiding on Pakistan s patform of defined water entitements, making the administration of these more transparent and accountabe, from the inter-provincia to the user eves. For groundwater, the Bank wi support the deveopment of the government s capacity for knowedge generation, poicy generation, and management. A major emphasis wi need to be on deveoping a better understanding of sainity and formuation of sat management strategies, groundwater recharge, and food fows. For both surface water and groundwater there wi be an emphasis on incorporating environmenta issues (incuding water quaity, wetands, and environmenta fows). An important eement of Bank support wi be training of a new generation of mutidiscipinary water resources speciaists, and support for mutidiscipinary centers of exceence for water resources, and natura and socia sciences. Piar 3: Service Deivery The Bank expects to be heaviy engaged in provincia- and city-eve efforts to improve the quaity, efficiency, and accountabiity with which water suppy, sanitation, and irrigation services are deivered. The Bank wi emphasize the deveopment of frameworks which encourage the entry of new payers (incuding community organizations, and the sma- and arge-scae private sector), the use of contracts which specify the rights and obigations of providers and users, and benchmarking for a water services. The Bank xxix

29 Pakistan's Water Economy wi emphasize the modernization of infrastructure incuding cana re-modeing and the use of measuring devices, which are integra for moving to a more fexibe, accountabe, transparent, and monitorabe service deivery paradigm. Piar 4: On-farm Productivity The Bank wi continue to invest in the on-farm services (and eveing, watercourse ining, and introduction of new technoogies through privatepubic partnerships) which are essentia for agricutura diversification and for improving the amount of crop, income, and jobs produced per drop of water. The Bank anticipates providing such support through its various ending instruments, incuding budgetary support for poicies and prior actions that address key issues (Deveopment Poicy Lending) as we as through specific investment ending for infrastructure and institutiona reforms. Finay, given the major scientific, poicy, and impementation chaenges ahead, the Bank, with partia support from the Government of the Netherands, wi mount a major program for providing anaytic and technica support to the federa and provincia governments. Paraphrasing Akhter Hameed Khan, the great Pakistani reformer, it might be said that the Bank s invovement in water in Pakistan has been one in which the Bank has chased the rainbow of we-functioning institutions and dreaded the nightmare of further institutiona decay and that ony the bodest among us can say that we may not be simiary engaged tomorrow. 1 1 Akhter Hameed Khan, A History of the Food Probem, The Agricutura Deveopment Counci, NY, xxx

30 The Process Foowed CHAPTER 1 THE PROCESS FOLLOWED In 23, the Board of Executive Directors (representing the 18 countries who own The Word Bank) approved a new Water Resources Sector Strategy. Two important concusions of the Strategy were that the genera principes adopted needed to be adapted to the widey varying conditions pertaining in the Bank s borrowing countries, and that there needed to be more systematic and integrated incorporation of waterreated issues into Country Assistance Strategies (the contract between the government and the Bank which defines an indicative four-year package of investment and advisory services to be provided by The Word Bank). Water management is a major issue for Pakistan, and an area where the Bank has a ong history of engagement and a perceived comparative advantage. As part of the process of preparing a Pakistan Country Assistance Strategy for the period 26 1 it was agreed that the Bank woud do a Water CAS for Pakistan, foowing the ogic shown in fig Generous support was provided by the Bank-Netherands Water Partnership Program. The Pakistan Water CAS process invoved severa reated eements: extensive discussions with senior officias of the provincia and federa governments, incuding a major forma consutation on institutiona issues a consutation with about 5 stakehoders from the private sector, academia, NGOs, professiona associations, and the government commissioning of background papers (isted in tabe 1.1, and avaiabe in the encosed compact disk) by prominent Pakistani practitioners and poicy anaysts. Fig. 1.1: The Water CAS Process Government/ Bank Country Assistance Strategy Country poicies and programs for water deveopment and management Government of Pakistan/ Word Bank Water CAS The Bank s 23 Water Strategy 1

31 Pakistan's Water Economy Tabe 1.1: List of background papers (avaiabe in the encosed compact disc) Background Paper Author(s) Designation 1. Water, growth, and poverty Sarfraz Khan Qureshi Former Director, Pakistan Institute of Deveopment Studies 2. Human and socia Karin Siegmann and Research Feows, Sustainabe Deveopment dimensions Shafqat Shezad Poicy Institute 3. Water and environmenta Vaqar Zakaria Managing Director, Hager Baiey sustainabiity 4. Water and energy Imitiaz Ai Qazibash Retired WAPDA officia 5. Water baances and Shahid Ahmad Chief Scientific Officer, evapotranspiration Water Natura Resources Division, Pakistan Agricutura Research Counci 6. Water rights and Faizu Hasan Chief Engineer, ACE (Pvt.) Ltd., and entitements Project Coordinator, Genera Consutants for WAPDA 7. Sustainabe, accountabe Sardar Muhammad Former Member (Water), and Chairman, institutions Tariq and WAPDA, respectivey Shams-u-Muk 8. Drinking water and sanitation Khurram Shahid Consutant 9. The poitica economy of Imran Ai Professor, Lahore University of Management reform Sciences (LUMS) 1. The roe of arge dams in Pervaiz Amir Economist, the Indus System Asianics Agro. Dev. Internationa 11. Groundwater deveopment Frank van Steenbergen Metameta Research and Ground Water/ and management and Shamshad Gohar Water Quaity Speciaist, PCWSSP 12. Modernization of agricuture Pervaiz Amir Economist, Asianics Agro. Dev. Internationa 13. The poicies and prospective Sardar Muhammad Former Member (Water), and Chairman, pans for deveopment and Tariq and WAPDA, respectivey management of water Shams-u-Muk resources by the federa and provincia governments 14. Food contro and Asif Kazi Former Specia Secretary, Ministry of Water management and Power, and ex-chairman, Federa Food Commission 15. Drainage and sainity M.N. Bhutta and Director Genera management Lambert Smedema Internationa Water Logging and Sainity Research Institute (IWASRI) 16. The evoution of Bank Usman Qamar Senior Irrigation Engineer, The Word Bank ending and non-ending for water in Pakistan 17. The evoution of Bank Pervaiz Amir and Economist, Asianics ending and non-ending for Nadir Abbas Senior Water Suppy and water suppy and sanitation Sanitation Speciaist, The Word Bank 2

32 The Chaenges and Achievements of the Past CHAPTER 2 THE CHALLENGES AND ACHIEVEMENTS OF THE PAST The Chaenges Pakistan is an arid country. The baance between popuation and avaiabe water aready makes Pakistan one of the most water-stressed countries in the word (fig. 2.1); with rapid popuation growth it wi soon enter a condition of absoute water scarcity (fig. 2.2). In the cutivabe pains, rainfa ranges from about 5 mm a year aong the Punjab border with India (which receives some rainfa from the summer monsoon) to ony 1 mm a year in the western parts of Pakistan. These ow precipitation eves mean that rain-fed or barani agricuture is not possibe on a arge scae in Pakistan. Throughout history peope have adapted to the ow and poory distributed rainfa by either iving aong the banks of rivers, or by carefu husbanding and management of oca water resources. One of the greatest of human civiizations the Indus Vaey (Mohenjodaro and Harappa) Civiization fourished aong the banks of the Indus. But under natura conditions popuation densities were necessariy ow. Fig. 2.1: Word s most water-stressed countries Source: 3

33 Pakistan's Water Economy 35 Fig. 2.2: Decining per capita avaiabiity of water in Pakistan (cubic meters per capita per year) Water stress 15 1 Water scarcity Source: Amir, 25. With British rue everything changed. As anayzed in Deepak La s history of economic growth in the subcontinent, 1 the British understood that the margina returns to water deveopment were higher in regions of reativey ow rainfa than in the higher rainfa areas, and thus emphasized hydrauic works which woud make the deserts boom. 2 In many ways, the imperative was to go west, young man, incuding into the arid part of eastern Punjab. In any socia endeavor of such ambition, the resut varies depending on the interaction of the natura and human terrain as described briianty in Imran Ai s semina book The Punjab under Imperiaism 3 and in his background paper for this Report. 4 As the irrigation systems stretched further and further away from areas of reasonabe rainfa, they deat with quite different socia reaities on the ground and gave rise to different hydrauic civiizations. In UP and eastern Punjab cana irrigation occurred primariy on aready setted ands, and irrigation was a suppement to reativey we-watered, rain-fed cutivation. In western Punjab, the part that woud be in Pakistan, the situation was quite different. Irrigation here was onto pastora ands, ony a sma fraction of which were private proprietary hodings. These extensive barren tracts were appropriated as state property and categorized as Crown or State Waste Land. Not ony were the rights of the pastora tribes to the and not recognized, but these tribes were aso deemed to ack the agricutura traditions to make a success of cutivating new and. The British administration then embarked on a vast process of agricutura coonization, by essentiay introducing coonists from other parts of the Punjab to these cana coony ands. A massive cana system (fig. 2.3 shows its extent today, and fig. 2.4 the architecture from the barrage to the fied) was buit, with the principe being to maximize the use of run-of-the-river fows in the kharif season, and to aow equa distribution to a irrigators by use of the warabandi, a time-based roster aocation system. Since that time agricuture in the region has argey been synonymous with irrigation, with rainfa paying ony a suppementary roe both for the spring (rabi) and autumn (kharif ) harvests. 5 As popuation densities increased, especiay in the areas adjacent to the rivers, so too did the vunerabiity of peope to the naturay meandering nature of heaviy-sit-aden rivers, and to foods. As shown in fig. 2.5, foods have, with considerabe reguarity, inficted arge damages and caused many deaths. The nature of the food protection and management chaenge varies consideraby across the country. 6 In NWFP and Baochistan and parts of the Punjab, the so-caed hi torrents are usuay highy beneficia, sustaining a arge 1 Deepak La, Cutura Stabiity and Economic Stagnation: India 15 BC 198 AD, Carendon Press, In the evocative phrase of Arthur Maass and Raymond L. Anderson, And the Desert Sha Rejoice: Confict, Growth, and Justice in Arid Environments, MIT Press, Imran Ai, The Punjab under Imperiaism, , Princeton University Press, NJ: Princeton, Paper 9. 5 Ibid. 6 Paper 14. 4

34 L.C.C. East (Gugera) L.C.C. West (Jhang) Ravi River The Chaenges and Achievements of the Past Warsak Dam Kurram River Goma River Tarbea Reservoir Kabu River Kaabagh Reservoir (proposed) Chashma Reservoir Pat Feeder Desert Feeder North West Rice Taunsa Barrage Guddu Barrage Beghari Feeder Dadu Sukkur Barrage Sehwan Reservoir (Proposed) Kari C.R.B.C Dera Ghazi Khan Kotri Barrage Haro River Soan River Jinnah Barrage Tha Cana Fig. 2.3: Indus Basin irrigation system Tha reservoir (proposed) Trimmu Barrage Ne e am River Kunhar River Chenab Jheum Rasu Barrge Chashma-Jheum Link Taunsa-Panjnad Link Muzaffargarh Punjnad River Punjnad Ghotki feeder Khairpur West Pinyari Abassia Khairpur East Rohri Nara Lined channe Fuei Rangpur Cana Chenab Indus River Manga Reservoir Rasu Power Jheum River Kashmir Pakistan Maraa Barrage ChanneU. Jheuam Link L. Jheum U. Jheum interna Qadirab ad Barrage Rasu-Qadirabad Link Chenab Trimmu-Sidhnai Link Havei Link Havei Interna Sidhnai Sidhnai Barrage L. Pakpattan Sutej Maisi Khanki Barrag e L. Chennab L.C.C. L.C.C. Feeder Chenab River Ravi Sidhnai-Maisi Bahawa ink Maraa Ravi Link U. Chenab Link - U. Chennab Interna B.R.B.D. Link Qaim BRBD Interna Qadirabad-Baoki Link Baoki Barrage L. Bahawa U. Bahawa C.B.D.C L.B.D.C Isam Barrag e North India Pakistan B.S. Link 1 U. Depapur L. Depapur B.S. Link 2 U. Pakpattan Sutej River Suemanki Barrage Fordwah Eastern Sadiqa Source: Hasan, 25. Arabian Sea agricutura popuation. Occasionay, fash foods cause serious damage, as did the drought-ending foods in Baochistan in 25. In the pains the probem is different. Punjab has probems both with inundation and and erosion, but inteigent use of the natura, south-west sope of the and has reduced the impact of fooding. In a river systems, and especiay those with heavy sit oads, the greatest fooding probems are in the fat detas. And so it is in Pakistan, where Sindh is basicay a deta in which the Indus has meandered over miennia. As in a detas, once sit is deposited in 5

35 Pakistan's Water Economy Fig. 2.4: A typica cana command in the Indus system Source: Hasan, 25. one pace, the river shifts to a ower-ying area. In times of food these can be very dramatic and ongdistance shifts. As arger popuations inhabited the deta, however, this uncertainty was not acceptabe and so, over the past one hundred and fifty years the Indus river has now been put in a straitjacket, thereby fixing its ocation. 7 The resut of this river training, as with so many other sit-aden rivers around the word, has meant that when sit is deposited the river now does not shift course horizontay, but verticay, giving rise to a situation where the river is higher than the surrounding and, and the choice is between two unsatisfactory 3,5 3, 2,5 2, 1,5 1, 5 Fig. 2.5: Food osses in Pakistan Lives Lost Source: Kazi, 25. Area Fooded (Miion Acres) Paper 14. 6

36 The Chaenges and Achievements of the Past and expensive options dredging, and continuing to raise the side embankments. The inevitabe consequence is that when a protection bund breaches in Sindh province, inundations are proonged, and the foods not ony damage summer crops but they aso interfere with the sowing of subsequent winter crops. The potentia for economic osses, and human sufferings for the poor inhabitants of reativey cheap food-prone ands near the river, are the greatest. In addition to miions of acres of irrigated and that is subjected to fooding, country s major rai and roads are aso sometimes affected by super food events that keep the infrastructure out of service for ong durations. 8 Transforming an arid and capricious environment into one in which arge numbers of peope coud ive peacefu and prosperous ives is, everywhere, a great gambe and even, in the eyes of some, a Faustian bargain. The natura fow regimes of the rivers were dramaticay atered. Rivers which had previousy meandered over wide pains were now confined within narrow channes. The arge quantities of sediments which were washed off of the young Himaayas in the spring foods now no onger nourished the deta but were diverted onto and (and ater partiay trapped behind high dams). Vast quantities of water were disgorged onto deserts, substantia parts of which were of oceanic origin and highy saine. And areas which were previousy habitabe ony by nomads were now transformed into dense cana coonies of immigrant farmers. 9 The area was, for better or worse, transformed into a hydrauic civiization which brought great returns but which aso posed, and poses, massive poitica, hydrauic, and economic chaenges in maintaining an acceptabe baance between the natura system and man. The first chaenge for the nation of Pakistan was a poitica chaenge which arose because the hastiy drawn ines of Partition severed the irrigated heartand of Punjab from the ife-giving waters of the Ravi, Beas, and Sutej rivers (fig. 2.6). The second chaenge was hydrauic in nature, because there was now (fig. 2.6) a mismatch between the ocation of Pakistan s water (from the Fig. 2.6: The Indus water cana system at Partition in 1947 Source: The Word Bank. Indus, Jheum, and Chenab, the so-caed western rivers) with the areas that had previousy been irrigated from the Ravi, Beas, and Sutej (which were now India s rivers ). The third chaenge was neither poitica nor hydrauic, but ecoogica. It was this ast reaity which gave rise to the third major water chaenge which Pakistan had to face at and after Independence. Hundreds of biions of cubic meters of water were now stored in the naturay-deep aquifers of Punjab aone. The groundwater tabe rose dramaticay (fig. 2.7), and in many areas water tabes now reached the eve of the and. And these waters were rich in sats which had been absorbed from the soi. After the water evaporated, the and was covered with a crispy ayer of ife-suppressing sat. In the eary 196s it appeared that Pakistan was doomed, ironicay, to a watery, saty grave. 8 Paper Imran Ai, The Punjab under Imperiaism, , Princeton University Press, NJ: Princeton,

37 Pakistan's Water Economy Fig. 2.7: The change in groundwater eves A CHAB DOAB RECHNA DOAB BARI DOAB A depth in m above m.s Jheum North branch ower Jheum cana Khadir branch Chenab Jhang Rakh branch branch Lower Bari Doab cana Degh Naa Ravi Dipapur cana Sutej Pre irrigation km Indus A Jheum Chaj Doab Rechna Doab Ravi Bari Doab Chenab Sutej A Degh Source: Bhutta and Smedema, 25. The Response Pubic Infrastructure The Partition both created Pakistan and did it in such a way that the very surviva of the country was put in jeopardy. Amost 9 percent of the irrigated area in the Indus Basin was now in Pakistan, 1 but the rivers which nourished these ands had their origins in India (and, to a minor degree, in remote and sparsey inhabited parts of China). Over the next decade, teams from Pakistan and India worked together with a team from The Word Bank (whose offer of its good offices was accepted by both countries) to fashion a soution which woud be acceptabe to both sides and woud be durabe. There were great difficuties and many dead ends. The first proposa (framed by David Liientha, former Chairman of the Tennessee Vaey Authority and the person who got the ba roing on the Indus Treaty) was of a singe, integrated basin authority. This was rapidy rejected as being impractica. The broad outines of the agreement were that Pakistan was (with minor exceptions for existing uses in Kashmir) assigned fu use of the waters of the Indus, Jheum, and Chenab rivers, which accounted for 75 percent of the waters of the system. The unique feature of the negotiating process was that it was agreed that the process shoud not be driven by ega principes but that, instead, principes of water engineering and economics were to be the basic considerations. 11 This meant that, Pakistan s considerabe misgivings notwithstanding, India was to be permitted (under very carefuy specified conditions which took two years to negotiate) to tap the considerabe hydropower potentia of 1 N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, 1973, and Undua Aam, Water Rationaity: Mediating the Indus Waters Treaty, Ph.D. dissertation, Durham University,

38 The Chaenges and Achievements of the Past Pakistan s three rivers before they entered Pakistan. 12 The Indus Waters Treaty (IWT) was not a firstbest for either side. Then there were conficting principes put on the tabe no appreciabe harm versus equitabe utiization. As in most other cases, internationa water aw is used by riparians ess to resove disputes than to dignify positions based on individua state interest. 13 And so too was the way in which the IWT was (and sometimes sti is) perceived. From the Indian side the fact that Pakistan got 75 percent of the water represented a fundamenta vioation of the principe of equitabe utiization (the favorite of the Internationa Law Association). The Treaty came under heavy fire in the Indian pariament and was subjected to trenchant criticism by most of the speakers who participated in the Lok Sabha debate on the subject on 3 November 196. They bamed the Government of India for a poicy of appeasement and surrender to Pakistan and said that Indian interests had been et down. 14 From the Pakistani side the fact that they were aocated ony 75 percent of the water when they had 9 percent of the irrigated and represented a vioation of the principe of appreciabe harm (the favorite of the Internationa Law Commission). A soomonic judgment (to which we return severa times in this Report in other contexts) was that of President Ayub Khan: we have been abe to get the best that was possibe.very often the best is the enemy of the good and in this case we have accepted the good after carefu and reaistic appreciation of our entire overa situation... The basis of this agreement is reaism and pragmatism. 15 The wisdom of this perspective has been vindicated many times over the past forty-five years, with the Indus Treaty recenty again being decared sacrosanct by the Presidents of both countries. A centra eement of the Indus Waters Treaty was the construction of the infrastructure which woud enabe Pakistan to both suppy those areas which woud no onger be irrigated from the Ravi, Beas, or Sutej ( India s rivers ), and to increase the overa area under irrigation. The Indus Basin Deveopment Fund (with contributions from severa western governments, a payment from India, and oans from The Word Bank) was used to re-pumb the system, as shown in fig This incuded the buiding of massive ink canas from the western rivers to the east, and the two main storage dams (Tarbea, the then biggest rockfi dam in the word, on the Indus; and Manga on the Jheum) on which the re-configured system woud depend. Fig. 2.8: The Indus Waters Treaty (196) 12 N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, 1973, and Undua Aam, Water Rationaity: Mediation the Indus Waters Treaty, Ph.D. dissertation, Durham University, Shapand in Undua Aam, Water Rationaity: Mediating the Indus Waters Treaty, Ph.D. dissertation, Durham University, N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, Ayub Khan in N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay,

39 Pakistan's Water Economy This was a massive engineering chaenge that faced, as do a chaenges in ife, times when faiure seemed imminent. But with great ski and commitment Pakistan s engineers and their coaborators from around the word did it. The Indus Waters Treaty brought a fundamenta and unprecedented change in Pakistan s options and approach towards its water deveopment and management. With the oss of the three eastern rivers, Pakistan had no choice but to rey on storage for meeting its existing demands (Manga), and for future extension of the irrigated area (Tarbea). In short, the deveopment and sustainabiity of water resources deveopment in Pakistan became, and continues to be, dependent on storage and dams. What was the socia and economic impact of this infrastructure? First, it secured the future of a young and vunerabe country. (It is reevant to note that, despite the fact that it was funded by The Word Bank, there was no economic anaysis done of Manga Dam it was an investment that was sef-evidenty necessary for the pure surviva of Punjab in Pakistan.) Second, it especiay Tarbea faciitated the expansion of irrigated area and the production of cean and renewabe hydropower. In a major study done for the Word Commission on Dams, Pervaiz Amir and coeagues did an ex-post assessment of the impact of Tarbea. The impact was and is massive. In the mid- 197s The Word Bank did an ex-post assessment of the economic impact of Manga and the ink canas. Whie recognizing that the indirect benefits were arge, the assessment focused ony on direct benefits, and concuded that these exceeded 1 percent. Tarbea has a massive impact on the economy of Pakistan. It is estimated 16 that about 4 percent of the popuation presenty benefits from water that is reguated by Tarbea. Tarbea (aong with the derivative Ghazi Barotha project beow it) represents over 3 percent of Pakistan s instaed generation capacity. The actua direct power and irrigation benefits were about 25 percent higher than those predicted at appraisa (fig. 2.9). Miion 1998 US$ Fig. 2.9: Benefits from Tarbea ( ) Predicted Source: WCD, 2. Power Irrigation Actua As noted in the Tarbea study for the Word Commission on Dams, important as these direct effects are, they te ony part of the story of the impact of major infrastructure. The irrigation and hydropower are the direct benefits, which in turn generate both inter-industry inkage impacts and consumption-induced impacts on the regiona and nationa economy. Water reeased from a mutipurpose dam provides irrigation that resuts in the increased output of agricutura commodities. Changes in the output of these commodities require inputs from other sectors such as seeds, fertiizers, pump sets, diese engines, eectric motors, tractors, fues, and eectricity. Furthermore, increased output of some agricutura commodities encourages setting up of food processing (sugar factories, oi mis, rice mis, bakeries, etc.) and other industria units. Simiary, hydropower produced from a mutipurpose dam provides eectricity for househods in urban and rura areas, and for increased output of industria products (incuding fertiizers, chemicas, and machinery). Changes in the output of these 16 Paper 2. 1

40 The Chaenges and Achievements of the Past industria commodities require inputs from other sectors such as stee, energy, and chemicas. Thus, both increased output of eectricity and irrigation from a dam resut in significant backward inkages (that is, demand for higher input suppies) and forward inkages (that is, providing inputs for further processing). In addition, as incomes rise, there is a further feedback oop deriving from increased demands for goods and services. There have been two major studies in the subcontinent which have examined these indirect impacts. A study by the Internationa Food Poicy Research Institute of the impact of Green Revoution 17 showed that: the mutipier was arge each rupee increase in vaue added in agricuture stimuated an additiona rupee of vaue added in the region s non-farm economy about haf of the indirect income gain was due to agricuture s demands for inputs and marketing and processing services, and the rest due to increased consumer demands as a consequence of higher incomes the mutipiers for basic productive infrastructure were much higher than for socia spending and other sectors As pointed out by Pervaiz Amir, 18 the indirect impacts of major dams in Pakistan are ikey to be quite simiar to those emanating from the simiarsized Bhakra Dam in the Indian Punjab, for which there has been a major recent assessment. 19 The study found that the direct benefits were higher than anticipated when the dam was buit and that the dam did, indeed, serve to transform this region. For every 1 rupees of direct benefits, Bhakra generated 9 rupees of indirect benefits for the regiona economy and rippes we beyond the region. These investments were done in the name of nationa surviva, food security, and economic growth: how do they fare when judged by the contemporary criterion on poverty reduction? The singe most important finding from research shows that the centra issue for poverty reduction is not who gets the water, but how that water transforms the demand for abor (which is provided primariy by the andess and margina farmers). The fundamenta driver is that the demand for agricutura abor is 5 percent to 1 percent higher on irrigated and. 2 As Robert Chambers has shown through viage-eve work (fig. 2.1), irrigation has meant higher and much more stabe empoyment, with the poor the major beneficiaries. Two recent, much more sophisticated anayses (which used input-output matrices and Socia Jan Fig. 2.1: Average number of empoyment for adut casua aborers each month Feb Mar Apr May irrigated viage Jun Ju Source: Chambers, Aug Sep Oct Nov Dec unirrigated viage 17 Haze, Peter, and C. Ramasamy, The Green Revoution Reconsidered: The Impact of High Yieding Varieties in South India, The Johns Hopkins University Press, Batimore, Paper Ramesh Bhatia, Economic Benefits and Synergy Effects of the Bhakra Mutipurpose Dam, India: A case study, The Word Bank, 25 (draft). 2 Ramesh Bhatia, Water and Growth, Background Paper Report,

41 Pakistan's Water Economy Accounting Matrix methods) have shown simiar resuts. The study by the Internationa Food Poicy Research Institute of the impact of Green Revoution 21 showed (fig. 2.11) that the biggest winners were the andess, whose incomes increased by 125 percent as a resut of the arge increase in demand for their abor. Fig. 2.11: The effect of irrigation and green revoution on income % increase Large farmers with irrigation Sma farmers with irrigation Non-irrigation farmers Source: Haze et a., Landess Non-agr househods And the major study by Bhatia and coeagues of the effect of Bhakra, 22 again (fig. 2.12) shows that the rura poor have benefited hugey from the project, and (fig. 2.13) that it was the indirect effects of the dam which had the major impact on urban areas (and therefore on urban poverty reduction). (There are, of course, a number of important differences between andhoding size and agricutura productivity in the Indian and Pakistani Punjabs, which woud mean that the distribution of direct benefits, which accrue to those with and, woud be somewhat different. But there is unikey to be much difference in terms of the forward and backward inkages which Fig. 2.12: The effect of Bhakra Dam on different socia groups Landowners % change of income of different types of househods with and without Bhakra Dam Agr Labor Source: Bhatia, 25. 1% 8% 6% 4% 2% % Rura Non Agr Rura Others Fig. 2.13: Income gains from directy and indirecty impacted sectors Bhakra Dam Direct Impacts Sef Empoyed- Rura Agr Labor- Rura Source: Maik, 25. Indirect Impacts Non Agr- Rura Others- Rura Urban Urban determine the magnitude of the indirect effects, or of the effects on the poor, since abor markets operate quite simiary on both sides of the border.) With the certainty or so it seems of retrospective wisdom, it has been caimed that 21 Haze, Peter, and C. Ramasamy, The Green Revoution Reconsidered: The Impact of High Yieding Varieties in South India, The Johns Hopkins University Press, Batimore, Ramesh Bhatia, Economic Benefits and Synergy Effects of the Bhakra Mutipurpose Dam, India: A case study, The Word Bank, 25 (draft). 12

42 The Chaenges and Achievements of the Past these interventions did nothing for the poor, because it were the rich farmers who benefited from the infrastructure. 23 These studies show the imits of such a reductionist view (which has never been one taken by governments with responsibiity anywhere in the word). At the end of the day it does not matter (a) whether such projects are justified in terms of poverty reduction, or (b) whether the primary recipients of the firstround benefits are those with and. Because the record is overwhemingy cear investments in water infrastructure in the subcontinent have resuted in massive reductions in poverty, and it is actuay the poor and andess who have been the biggest beneficiaries. The appropriate (water!) metaphor (as in other water projects around the word) is not tricke down, but a rising tide ifts (amost) a boats. Finay, a pubic infrastructure was not for irrigation. Setting arge numbers of peope in an arid and capricious environment means facing not ony the constant threat of famine, but the constant threat of variabiity s other face, occasiona but very damaging foods. Foods are detrimenta not ony in financia terms, but aso in their abiity to severey undermine the productive system that has to be reasonaby free from uncertainties and frequent disruptions. 24 As aso pointed out by Asif Kazi, there can be no such thing as fu protection from foods. In terms of infrastructure, the chaenges (and the responses) are quite different in different parts of the country. In addition to the major dams (which provided some protection from foods), and the mutitude of sma check dams in the his, there were aso substantia investments in food contro infrastructure, with about 6, kiometers of embankments constructed aong the major rivers and their tributaries. 25 There have aso been investments in watershed protection (above Manga, for exampe) 26 which have probaby had a modest effect on the uncontroabe sediment oads from the young mountains, and have and coud have (accepted wisdom notwithstanding) itte effect on arge-scae fooding. 27 Pakistan s approach to food management has aso emphasized other non-structura eements, incuding permanent and temporary reocation of potentia food affectees, review of reservoir operation reguations to attenuate food peaks, and-use reguations for hazardous areas, and an extended and reiabe Food Forecasting and Timey Warning Network. 28 The Response Private Infrastructure The arge investments in surface irrigation transformed not ony the economy and andscape of Pakistan, but had a huge impact on groundwater. The vast, eaky, irrigation system disgorged hundreds of biions of cubic meters 29 of water into the aquifers of the Indus Basin at the same time as when natura drainage channes were impeded. The resut was a fundamenta change in the water baance, with subterranean and surface fows out of the aquifers and into the rivers, and eventuay the ocean no onger capabe of draining the much arger quantities of water 23 Jack Peiquen, India: Evauating Bank Assistance for Agricuture and Rura Deveopment, OED, The Word Bank, 22, and Shripad Dharmadhikary, Unraveing Bhakra, Badwani, Madhya Pradesh, Paper Ibid. 26 Ibid. 27 Cader, Ian, and David Kaimowitz, A food of evidence, The Economist, 7 October Paper Assuming an area of roughy 2 km x 3 km, a change of depth of 15 meters, and a storage coefficient of.3. 13

43 Pakistan's Water Economy which were poured into the aquifers. The resut was an inexorabe and reativey rapid rise in the water tabe, as shown for a cross-section between the Punjab canas (fig. 2.14), and on an average basis for a onger period in fig There were two pronounced and curiousy entanged consequences of the high water tabe. The first consequence was a revoution in the use of groundwater. At the time of Independence, groundwater use in the country was very Fig. 2.14: The rise in groundwater eves ( ) A CHAB DOAB RECHNA DOAB BARI DOAB A depth in m above m.s Jheum North branch ower Jheum cana Khadir branch Chenab Jhang Rakh branch branch Lower Bari Doab cana Degh Naa Ravi Dipapur cana Sutej Pre irrigation km Indus A Jheum Chaj Doab Rechna Doab Ravi Bari Doab Chenab Sutej A Degh Source: Bhutta and Smedema, 25. Fig. 2.15: Irrigation expansion and groundwater eves 45 4 Cutivabe area 1 Irrigated area (m acres) Groundwater tabe Groundwater depth (ft) Source: IWASRI/WAPDA,

44 The Chaenges and Achievements of the Past imited mainy through Persian whees in the riverine aquifers, and the remarkabe karezes (horizonta community wes) in Baochistan. This changed dramaticay from the mid-196s onwards as a resut of severa converging factors. As Green Revoution took hod, farmers needed much more reiabe suppies of just-in-time water. The cana system, however, with few hydrauic contros and rigid, predetermined schedues was derived for another, ess precise type of irrigation and no onger met the more demanding needs of farmers. Green Revoution was not just about seeds and fertiizers, a centra part was aso the emergence of the new moduar pump pus diese engine technoogy which offered every farmer an exit option, or at east one in which he coud ensure that he had water when he needed it if the cana irrigation system faied. As emphasized by IWMI s Tushaar Shah: 3 we need to recognize that sefprovision of water is the best indicator of the faiure of pubic water suppy systems. Tubewes proiferate in cana commands because pubic irrigation managers are unabe to deiver irrigation on demand. In addition, starting in the 196s there were new forms of government support: credit and soft oan programs for pump sets and tubewes, and subsidies for eectricity (with agricutura rates 4 percent ess than norma rates in Punjab and Sindh, and 6 percent ess in Baochistan and NWFP). 31 The second consequence of the rapid rise in the groundwater tabe was much ess benign. In its trave down and back up the soi profie, the water had absorbed the sats sometimes very abundant where the sediments were of oceanic origin, as in arge parts of Sindh which were present in the soi. When the water evaporated the sats stayed behind, covering arge areas of once-fertie fieds with a sterie crust. The owying areas were now effectivey barren, due to the combined effect of sat and sodden root zones. In the eary 196s, it appeared that the bessing of bringing water to the desert had ended up as a curse, with 4 miion hectares of Pakistan affected by waterogging and sainity, and apparenty doomed to a watery, saty grave. But just as there are unforeseen ecoogica consequences when man intervenes with nature on such a massive scae, so, too, is the power of human ingenuity aso often unimaginabe. So when President Ayub Khan visited Washington in 1962, he tod President Kennedy of the curse of waterogging and sainity. And thus started another chapter, for that conversation ed to a major scientific enquiry by teams of natura and socia scientists from Harvard University and their Pakistani coeagues into the causes of the probem, and the poicy options for containing the damage. Intuition said that the baance needed to be restored by reducing the fows into the aquifers, by ining the canas. But the scientists said otherwise the way to estabish a new, not-socose-to-the-surface water baance was to increase the amount of evapotranspiration (more crops), and to increase the circuation of water so that the sats woud not accumuate in the root zone. And so it proved, athough not quite in the way that the scientists thought and advised. For that was an era of naïve faith in the capacity of governments to pan and impement, and of itte confidence in the actions of individua peasant farmers. And so the proposed soution was arge-scae instaation of pubic tubewes, which woud recyce groundwater back into the canas for subsequent use on the fieds in the sweet water areas, and pump saine water out into drains in the saine areas. And so amost 2, high capacity (5 15 iters per second) government-run tubewes were instaed from the 196s onwards under the Sainity Contro and Recamation Project (SCARP). 32 In many of the worst affected areas, the SCARP formua worked wonders converting 3 Tushaar Shah, Accountabe institutions, Background Paper Report, Robert Johnson, Private Tubewe Deveopment in Pakistan s Punjab, IIMI, Lahore, Ibid. 15

45 Pakistan's Water Economy a saine wasteand back into a productive area. In fresh groundwater areas, the SCARP drainage tubewes doubed up as an additiona source of irrigation. In saine groundwater areas the probem of disposing the highy saine effuent made the deep tubewe program far more compicated and the impact more imited. As we have seen earier, the farmers knew one thing better they did not need arger suppies of unreiabe water, but much more precise suppies which they coud contro. And so the great attack on waterogging and sainity foowed the compass of the scientists, but not their road map. The arge SCARP tubewes were instaed and did pay a roe; but it was the unfettered action of miions of farmers with their individua tubewes and their intensifying agricuture which reversed the rising tide of water and sat, and restored a stiuneasy baance. The net resut of this interpay of suppy- and demand-side factors was (fig. 2.16) an exposive increase in the number of tubewes for irrigation, primariy in the sweet water areas far from the ocean and nearer the mountains. (The investment on these private tubewes is of the order of 3 4 biion rupees.) In addition, many industries rey for their water suppy on reativey cean groundwater. 33 In 196, groundwater accounted for ony 8 percent of the farm gate water suppies in Punjab. Twenty-five years ater this figure was 4 percent, and at present groundwater use for agricuture accounts for more than 6 percent of the water at the farm gate in Punjab. 34 It is estimated that 75 percent of the increase in water suppies in the ast twenty-five years is due to groundwater expoitation. 35 In the process, the great cana system became ess of a water deivery mechanism, and more of a groundwater recharge mechanism. In Punjab, for exampe, 8 percent of the groundwater recharge is from the cana system. Finay, it is instructive to consider the source of irrigation water by both quantity and vaue, in part because it shows the centraity of conjunctive use, and the faacy of a Cartesian view, namey that groundwater is more important than surface water. Figure 2.17 shows: that surface water is very important, accounting for 9 percent use for irrigation in Punjab (4 percent directy, and 5 percent indirecty). The massive infusions Fig. 2.16: The growth in use of tubewes Fig. 2.17: Quantities and vaues of irrigation suppies in Punjab, by source Tubewes (thousands) 7, 6, 5, 4, 3, 2, 1, Source: Steenbergen and Gohar, % 1% 4% By quantity (cubic meters) Cana water directy Tubewes from natura recharge Tubewes from canainduced recharge 62% Source: Steenbergen and Gohar, background paper. 25% By vaue (Rupees) 13% 33 Paper Ibid. 35 Ibid. 16

46 The Chaenges and Achievements of the Past of surface water remain as important as ever. However, primariy because of the inabiity of the surface system to directy meet the justin-time demands of modern agricuture, the deivery is through the circuitous (and costy in many ways) groundwater system that groundwater is very important, accounting for 6 percent of the water deivered at the farm gate and 75 percent of the vaue of water deivered In summary, the ast forty years witnessed an extraordinary demonstration of man s abiity to think and act his way out of apparent dead ends. With equa doses of good thinking, good panning, and good uck, the peope and government of Pakistan have addressed the twin chaenges of producing more whie simutaneousy deaing with a fundamenta threat to the natura resource base. The good thinking was the appication of water science and economics by many of Pakistan s best and brightest in conjunction with many of the best water minds in the word. The soution was not the obvious one of ining canas and putting ess water on the and, but of increasing the use of groundwater, thus increasing evapotranspiration, drawing down the groundwater tabe, and eaching much of the sats down and out of the root zone. The good thinking and good panning were cassic pubic goods. The good uck driver of this revoution was the modest but transforming tubewe and diese engine, bought and managed by miions of farmers for the simpe reason that this decentraized on-demand source of water enabed them to greaty increase their crop yieds and incomes. The Response Institutions As described earier, the hydrauic civiization of the Indus Vaey in Pakistan was a very particuar construction, cut from quite a different coth from its apparenty simiar Indian cousin to the east. To the east, irrigation was a service provided to existing farmers who had ong been engaged in setted agricuture. To the west, in the to-be- Pakistan areas there were ony pastoraists. There the roe of the state was not ony to ay out the physica infrastructure, but aso to construct an entirey new coonia socia structure. 36 A of history is path-dependent, but in few paces is the import of the initia decisions as profound and as cear as it is in this case, as dissected with extraordinary carity by Imran Ai. 37 For the British, especiay after the armed strugge of 1857, the Punjabis were the favored peope of the subcontinent. It was ony Punjabis and not any of the other ethnic groups in future Pakistan who were given and in the cana coonies in both present Punjab and Sindh, aying the basis for stisimmering perceptions of preferentia treatment by the state. Furthermore, the coonia administration amost universay confined the seection of grantees to the upper segments of viage society (the ineages that controed and and power at the oca eve) and excuded the ower status service castes. And here another pathdefining brick was aid, for these same andhoding castes monopoized recruitment into the coonia miitary, with Punjabis comprising haf of the entire British army. The miitary thus became a major actor in the emerging hydrauic society, through substantia and grants to miitary personne, miitary farms, extensive horse-breeding schemes and stud farms, and remount depots for the cavary. After 19, the seection process worked within the framework of the Punjab Aienation of Lands Act, which isted hereditary andhoding castes in each district, and forbade and transfers from agricutura to nonagricutura castes. Finay, those who were rewarded with and in the new cana coonies were 36 Paper Ibid. 17

47 Pakistan's Water Economy primariy non-musim Punjabis from the east, aying the seeds for the massive probems of return migration in The hydrauic state in Pakistan, then, created not just infrastructure, but socia fabric, and it was a state which evoved in cose association with the miitary. The hamark of the Pakistani water bureaucracy at Partition was one of discipine, order, and the unquestioned supremacy of the state. As described earier, the pressing water chaenges of Pakistan in the first decade after Independence were to buid the infrastructure necessary for water and energy security. Given the dominance of the singe trans-provincia Indus Basin and the need for basin-wide soutions, the ogica response was WAPDA, a parastata given a mandate of panning and buiding this infrastructure, and given the human and financia resources to do so. WAPDA proved to be very successfu, deveoping a goba reputation for word-cass expertise in panning, construction, and operation. Buiding institutions, however, is not a one-shot business. Trade-offs which were made quite sensiby at one particuar stage of deveopment, may not be appropriate as opportunities and vaues change. The key test is whether the physica and institutiona systems are abe to evove as circumstances change. The very success of one endeavor gives rise to new chaenges, and often chaenges which are fundamentay different from those just mastered. It is now generay agreed that in recent decades the major water institutions irrigation departments, WAPDA have ossified, and not evoved in the face of changing circumstances, incentives, and demands. Like a institutions, they were designed to meet a specific need at a particuar historic juncture. In the case of the irrigation departments, the chaenge of the nineteenth century was to put in pace a ow-cost extensive unined cana system which coud spread the then-abundant water onto a very arge area at minima cost for the production of foodgrains. The reasonabe resut was a system which had itte abiity to reguate fows within the channe systems or for fow measurement at either the main, branch, or distributary eves, and which ensured that pain was equay spread through an infexibe time-based aocation system. Some defects were cumuative and became apparent and important over time. The rigid and simpe warabandi rues had many virtues, but aso ike a human endeavors vices. A major issue was that a time-based distribution system which did not take account of arge cana osses ended up heaviy discriminating against taienders. The take it when we give it; and use it or ose it phiosophy of warabandi aso meant that the system became ess aigned with the needs of irrigators as water became scarce, and as farmers shifted to varieties and crops which were more sensitive to the timing of water inputs. Farmers, as everywhere, adapted in ways that they coud by trading warabandi turns in the distributaries, and, eventuay, by becoming heaviy reiant on groundwater which they coud contro much better. This invoution (to use Cifford Geertz s cutura anthropoogica construct) 38 meant that the irrigation departments sowy but surey shifted their focus from being a good service provider to being concerned substantiay with ways in which the departments coud serve the needs of the peope in it. A greater and greater amount of the rea attention of the irrigation departments was paid to the empoyment provided, and the opportunities for rent which coud be extracted at a eves. The iron equation of rent seeking (monopoy + discretion accountabiity = corruption) was at work even in coonia times: The subordinate bureaucracy was invoved extensivey in perquisites from agricutura owners. 38 Cifford Geertz, Agricutura Invoution: The Processes of Ecoogica Change in Indonesia, University of Caifornia Press,

48 The Chaenges and Achievements of the Past The arger and more powerfu the atter, the more concessions they coud obtain from corruption. This occurred in essentiay two features: first, greater and inordinate access to irrigation water; and second, underassessment of water rates. This situation was exacerbated in Sindh, with more and under arge andowners. 39 After Independence, this process was deepened and strengthened. The irrigation departments (a) maintained (to this day) their monopoy status; (b) deveoped ever-higher eves of discretion (so that at each eve in each of the systems there are just a few peope sometimes one who decide exacty how and why water is distributed to the various canas in the ways it is), and ensured that the water records remained (and remain) interna rather than pubic records; and (c) concurred with the cumuative tipping of the who pays baance away from the user and towards the budget, thus creating a arger and arger discrepancy between the cost and vaue of water (and thus a arger and arger space for arbitrage) and ess and ess accountabiity to users. The end resuts are somewhat different in different areas, and aways there are good peope at various eves who push to hod the incentive structure at bay. But the systemic resut is cear. The origina discipine of the warabandi is severey damaged, with direct outets constituting up to 3 percent of fows in some cana commands. The rents extracted are huge: at the top of the feeding chain in some provinces crores of rupees aegedy are paid by officias for positions; at the executive engineer eve offers of cean jobs at four times the saary are rejected because of the major oss of income (forma and mosty informa) this woud entai. Put a of this on top of a system where inequaity (the so-caed feuda probem ) was buit in from the start, and it is not surprising that the singe most striking feature to experienced outsiders is the very high eve of mistrust in the water management system of Pakistan. The contemporary situation is summarized we by Imran Ai:...with decining administrative efficiencies, overstretched organizationa resources, degraded service deivery, and unchecked corruption, there appears to be a garing faiure of centraized irrigation management. 4 WAPDA has a shorter history driven by the origina panning and construction of major infrastructure mission. It performed this heroicay, in many respects, with an organization of high morae and competence buiding Manga and Tarbea, and, in the process overcoming enormous technica chaenges which threatened the integrity of structures which have served the country so we. With the imminent competion of Indus Basin Project and Tarbea Dam, the country s emphasis shifted to addressing waterogging and sainity probems, both of which were incuded in WAPDA s founding Act. In 1973, the federa government aunched an acceerated program of waterogging and sainity contro (SCARP). WAPDA, which had skimmed off the cream of the technica expertise earier avaiabe in the irrigation departments, was the natura choice to pay the ead roe in the construction of SCARPs as we as new canas that cross provincia boundaries. Whie federa resources for SCARP were aocated to the provinces, they were obiged to use WAPDA as the contractor. Competed works were handed over to the irrigation departments, who took over O&M responsibiity, invariaby with reuctance and reservations. Besides operating and maintaining the existing three major reservoirs, WAPDA continues to perform some of these new responsibiities to date, even though this takes opportunities for the irrigation departments to deveop their own capacity. With the ongoing reforms of WAPDA s Power Wing and the advent of the drought and emerging water shortages, WAPDA has once again been 39 Paper 9. 4 Ibid. 19

49 Pakistan's Water Economy thrust into the imeight. The residua Water Wing of WAPDA has shifted its focus towards deveoping water resources envisaged in its ambitious Vision 225. WAPDA is constructing severa medium-size reservoirs as we as major irrigation extension projects (Greater Tha and Kachi Canas), whie panning for and advocating major new reservoirs. In many ways, these key institutions of the hydrauic state of Pakistan resembed and in some cases were modeed after simiar institutions in deveoped countries which had used water infrastructure as the patform for growth in arid ands. And as with a such countries incuding USA, Mexico, Brazi, South Africa, Egypt, India, Thaiand, Austraia, and China the process of institutiona change has been protracted, fitfu, difficut, and incompete. In the process of a simiar review with The Word Bank in China, the Government of China deveoped a usefu schematic representation (fig. 2.18) of the institutiona chaenge in moving from an era Stage 1, in which buiding infrastructure is the dominant chaenge, to Stage 2, where infrastructure sti had to be buit, but maintenance Fig. 2.18: Rates of return on investment on infrastructure and management of water resources Returns on Investment Deveoping Infrastructure Investments Source: The Word Bank, 23. Management Investments Type 1 Type 2 Type 3 Deveoped and management of existing infrastructure and resources become the primary chaenge. Long as the distance is to go, Pakistan has made important progress in some critica areas. Institutions are not just organizations, but the rues of the game which govern reationships among organizations and peope. 41 The most fundamenta of the instruments which affect water management are those which define who is entited to do what with water. At the apex eve there is the Indus Waters Treaty which defines, unambiguousy and in perpetuity, the water that beongs to Pakistan. One of the great virtues of the Treaty was that by the carity of definition, and the permanent nature of the rights so estabished, it motivated India and Pakistan to focus on how they woud use the water that was theirs (and not on endess distracting hagging about what water they shoud have). Recent differences on differences which have arisen in the interpretation of the Indus Waters Treaty have confirmed the foresightedness of the framers of the Treaty (who set up we-defined mechanisms for deaing with these), but have aso suggested that there is room for modernizing the biatera dispute resoution mechanism so that questions can be resoved in a more predictabe and timebound manner by the Indus Waters Commission. In a set-up where most depend on a singe river system, carity on entitements at the next eve down between provinces was equay important and, in many ways, equay disputatious. Starting in 1935, there were a series of high-eve commissions constituted first by the British and then Pakistani governments to try to get a asting agreement on the division of the Indus system waters among the provinces. After many faied attempts, in 1991, agreement was reached on the provincia entitements to waters of the Indus Basin (see box 2.1). 42 The Water Accord is a great 41 Dougass North, Institutions, Institutiona Change and Economic Performance, Cambridge University Press, Paper 6. 2

50 The Chaenges and Achievements of the Past achievement since it defines, unambiguousy and in perpetuity, the shares of avaiabe water which can be used by each of the provinces. It is worth recounting the bases for the Accord. The basis for entitements was prior existing use of water: the record of actua average system uses for the period woud form the guideine for deveoping a future irrigation pattern. These ten daiy uses woud be adjusted pro-rata to correspond the indicated seasona aocations of the different cana systems and woud form the basis for sharing shortages and surpuses. This meant that the existing uses of water suppies to the provinces, which they have so far been getting as ad hoc aocations, remain untouched. The Accord specifies an automatic process for adjusting entitements depending on avaiabiity. These ten daiy uses woud be adjusted pro-rata to correspond the indicated seasona aocations of the different cana systems and woud form the basis for sharing shortages and surpuses. In case a province was not in a position, for the time being, to make fu use of its aocation, that surpus may be used by another province without acquiring a right to it. The provinces were, in aw, given freedom by the Accord to use their aocation in any way that they want: there woud be no restrictions on the provinces to undertake new projects within their agreed shares, and the provinces wi have the freedom within their aocations to modify system-wide and period-wise uses. In practice, however, the fact that provincia entitements were expained as aggregates of specified historica uses in different cana commands meant that the Accord was thus impicity specifying the distribution of the provincia shares to each of the existing cana commands, aocations which, in Punjab at east, are foowed to this day. Simiary, the historic aocations within each cana command among the distributaries is aso defined historicay and foowed, and simiary down to the outet eve, beow which the warabandi system specifies shares. What this impies is that in major parts of the Indus Basin irrigation system there are, in fact, we-defined entitements at a eves, from the internationa, through the interprovincia, down to cana commands, distributaries, outets, and utimatey to each farmer on a water course. This we-estabished set of water entitements is a tremendous institutiona asset for Pakistan as it moves towards modern water management. That said, the entitements have not been impemented, at any eve, with transparency and accountabiity. This has bred widespread beief that the discretion, which is aways present when there is no transparency, is widey abused. The extent of actua abuse remains uncear officias wi, in one breath, say that administration is by the book at a eves, and then say that a move towards transparency wi be opposed because it wi reduce the discretion which officias have been used to exercise at a eves. If existing entitements at a eves were pubicized, aong with actua fows, and if this was done in a way such that the information was easiy accessibe, and comprehensibe to ay peope, then a great dea of the discretion, corruption, and mistrust woud evaporate. In addition, farmers equipped with reiabe information on what they woud get each season, and confidence that it woud actuay be deivered, woud be abe to improve substantiay the returns to the crops they grow. And, of course, there woud be much greater pressure on the irrigation departments for actuay providing that to which users are entited. The instaation of a teemetry system at a barrages and headworks of canas is a vita first step in this process. With periodic, credibe caibration, 21

51 Pakistan's Water Economy Box 2.1: The Water Accord of 1991 There was an agreement that the issue reating to apportionment of the waters of the Indus river system shoud be setted as quicky as possibe. In the ight of the accepted water distributiona principes, the foowing apportionment (in MAF) was agreed to: Kharif Rabi Tota Punjab Sindh* NWFP Baochistan Civi Canas** (NWFP) Grand Tota * Incuding aready sanctioned urban and industria uses for metropoitan Karachi. ** Ungauged civi canas above rim stations. Under Section 14 (b), the record of actua average system uses for the period woud form the guideine for deveoping future reguation pattern. These ten daiy uses woud be adjusted pro-rata to correspond to the indicated seasona aocations of the different cana systems and woud form the basis for sharing shortages and surpuses on a-pakistan basis. Baance river suppies, incuding food suppies and future storages, sha be distributed as 37 percent each to Punjab and Sindh, 12 percent to Baochistan, and 14 percent to NWFP. The need for certain minimum escapage to sea beow Kotri to check sea intrusion was recognized. Sindh hed the views that the optimum eve was 1 MAF which was discussed at ength, whie other studies indicated ower/higher figures. It was, therefore, decided that further studies woud be undertaken to estabish the minima escapage needs downstream Kotri. A efforts woud be made to avoid wastages. Any surpus used by provinces woud not estabish a right to such uses. Source: Abstract from Water Accord and pubic access to the data on the Internet, this wi substantiay improve pubic confidence in the impementation of the Water Accord. We return to this theme, and the exciting possibiities for progress, in Chapter 3 of this Report. Finay, a profound institutiona change over the ast thirty years throughout the subcontinent has been the de-formaization of the water economy. Reca that over the past twenty years, 75 percent of the expansion of irrigated area has been outside of the forma system, and driven by the individua decisions and investments of miions of farmers. In many ways this deformaization has been a great success. But nothing asts forever, and now it is cear that the aissezfaire attitude to groundwater expoitation, which worked so we in recent decades, wi not work now that the chaenge has changed from underexpoitation to incipient overexpoitation of many aquifers. The forma institutions have not been doing very we in their home territory (providing services and maintaining their infrastructure); now they wi not ony have to improve greaty there, but aso gear up for the new and very difficut task of conjunctive use of surface water and groundwater, and co-managing these in coaboration with the users (discussed in detai in Chapter 3). 22

52 The Chaenges of the Present and the Necessary Responses CHAPTER 3 THE CHALLENGES OF THE PRESENT AND THE NECESSARY RESPONSES There has been much deiberation in Pakistan in recent years on how to reorient the state to meet the massive water deveopment and management chaenges. At the nationa eve, this incudes deiberations refected in the Ten Year Perspective Pan (Panning Commission, 21), the Nationa Water Poicy (Ministry of Water and Power, Draft 22) and the atest of October 22, the Pakistan Water Sector Strategy Study by the Ministry of Water and Power, which incudes three main documents: the Nationa Water Sector Profie, which summarizes and detais a aspects of the water avaiabiity and utiization as they exist today; the Nationa Water Sector Strategy, which identifies the key issues and objectives for the water sector and proposas for panning, deveopment, and management of water resources and their use in a water sub-sectors; and the Medium Term Investment Pan (MTIP), which identifies the key programs and projects which shoud be undertaken by 211, and which are designed to achieve the initia objectives of the Strategy. As summarized in the background paper by Sardar Tariq and Shams-u-Muk, two of Pakistan s most eminent water practitioners, the core issues emerging from these documents are: the desirabiity of attaining financia sustainabiity defining ceary the water rights and entitements both for surface water and groundwater creating trust and transparency in equitabe water distribution and improving services rationaizing water charges and increasing productivity cearing huge backog of maintenance and modernizing the existing infrastructure deveoping additiona infrastructure for storage, distribution, and deivery It is to these and reated chaenges, and the responses they demand, that we now turn our attention. Adjusting to the Needs of a Changing Pakistan Pakistan is in the throes of profound demographic and economic changes, which have major impications for water management. First, there are major changes within agricuture and rura areas. Unti reativey recenty, as described by Shahid Ahmad, 1 agricuture was characterized by ow cropping intensity and production dominated by ow-water requirement crops ike food grain (wheat, maize, sorghum, and miets, puses, and oiseeds). During the ast decade, however, the pressure on water has drasticay increased, with more competition for quantity and quaity of irrigation water within the irrigation sector. There is now the emergence of a cass of farmers known as progressive farmers, who are growing high-vaue crops for both domestic and export markets, and who have eapfrogged out of the od brute force type of agricuture into precision agricuture, in which water pays a centra roe not just in evapotranspiration, but as a mechanism for deivering fertiizers and pesticides to crops. Incipient as it is, there is aready evidence that this agricutura diversification is 1 Paper 5. 23

53 Pakistan's Water Economy transforming the countryside in many ways. As in other parts of the word, this agricutura diversification transforms rura ife (and water management) in many ways. High-vaue crops produce many more jobs per drop of water and per unit of and than traditiona crops (fig. 3.1). And they have deeper rippe effects into the rura Person days per hectare Fig. 3.1: Empoyment generation by crop Fodder crop Rice Jowar Source: Bhatia, 25. Rainfed Bajra Wheat Puses Irrigated Oiseeds Cotton Groundnut Spices economy, both backward (since they demand more inputs) and forward (since they give rise to a variety of off-farm processing activities). These changes are spurring substantia empoyment chaenges within rura areas, with about 3 percent of peope in rura areas aready dependent on non-agricutura sources of income. 2 Contract farming, often ed by progressive farmers, is ikey (as it has in other countries) 3 to be an important mechanism for bringing unified packages of technoogy, services, and marketing, in making the transition to high-vaued agricuture, and in ifting arge numbers of peope both those who stay in agricuture and those who move into the associated service sectors out of poverty. In short, rura areas in many parts of Pakistan are changing in fundamenta ways, captured in vivid prose by Akhter Hameed Khan, the great observer and socia activist: (In the) rura areas of Pakistan the subsistence economy has given way to a cash economy. Education has changed peope s attitudes. New professions, business and commerce have created new reationships and the cuture of poverty is dead or dying. Government inputs, however inadequate and bady impemented, have changed the physica and socia environment. the changes that have taken pace, have created a new society and a new cuture 4 Second, there are major demographic and economic changes taking pace. Popuation growth (fig. 3.2) is very high from 8 miion peope in 198, the popuation wi be 23 miion in 225. Popuation (miions) Fig. 3.2: Popuation growth in Pakistan * Source: Siegmann and Shezad, 25. This means that aggregate water demands have increased sharpy and wi continue to do so. Simutaneousy, Pakistan is urbanizing rapidy the percent of the popuation which ives in urban areas has doubed over the past twenty years, and the absoute size of the urban popuation has increased by a factor of 3.5, going from 2 miion in 198 to 7 miion in 2 (fig. 3.3). Associated with this urbanization is a rapid increase in the roe of manufacturing (fig. 3.4) which now contributes about the same as agricuture to the GDP of Pakistan. Poverty decined during the 198s but has stagnated unti recenty (fig. 3.5). 2 Edward Luce, Cure for India s rura woes ies in abiity to escape the farm, Financia Times, 7 December For exampe Brazi, as documented in Word Bank Water Resources Sector Strategy, Arif Hasan, in John Briscoe, Two decades of change in a Bangadeshi viage, EPW, Vo. XXXVI, No. 4, 26 October

54 The Chaenges of the Present and the Necessary Responses Fig. 3.3: Urban popuation growth in absoute numbers Urban popuation (miions) Source: Siegmann and Shezad, 25. Fig. 3.4: Proportion of GDP in manufacturing Source: Siegmann and Shezad, 25. These changes of scae, ocation, and composition have profound impications for water management in the future. Most obviousy they wi mean a Mathusian arithmetic, in which growing demands wi put unprecedented pressure on a imited quantity of avaiabe water. But it aso % 2 1 % GDP in manufacturing Fig. 3.5: Prevaence of poverty in Pakistan Source: Qureshi, Urban Overa Rura means that demands that coud once comfortaby be met at a oca eve wi start having regiona impications, and thus impications for other sectors. A major cities of Pakistan, with the exception of Isamabad and Karachi, depend on tubewes which tap oca aquifers for their raw water suppies. Lahore, for exampe, has 3 wes that suppy the city with water. This arrangement functioned we as ong as the cities were sma and the aquifers were not contaminated. But now the exposive growth in demand which is expected to grow from 4 percent to 15 percent of aggregate water demand in the next twenty years 5 has meant that oca aquifers are being drawn down very fast. And more ominousy, arge quantities of untreated, often highy toxic municipa and industria wastes are being dumped in open drains, and are eaching down into the aquifers. As discussed in more detai in the section on the environment ater in this Report, more than 9 percent of municipa and industria wastes are simpy dumped, untreated, into the oca aquatic environment with major consequences for the environment and human heath now, and since natura aquifer ceansing takes pace over decades or even centuries, for very ong periods into the future. Finay, there is a growing understanding that there are major environmenta needs for water in sustaining rivers, wetands, and coasta areas, incuding the Indus Deta (discussed in the ater section on the environment). As understanding and income grow, so these needs (sti often described as wastage, as in wastage to the sea ) wi become important caimants on the everscarcer resources of the country. In summary, then, in the past water resources management in Pakistan was argey synonymous with management of water for irrigation. Whie irrigation wi continue to use the majority of water in the foreseeabe future, management of water resources in Pakistan wi become a much more mutisectora affair. Water use for towns and industries wi become a major oca and regiona 5 Paper 2. 25

55 Pakistan's Water Economy issue, and the use of water for environmenta purposes wi demand more water and more attention. And issues of water quaity wi grow to be as important as issues of quantity. Water managers in Pakistan shoud, ike their counterparts in India, be bracing for a turbuent future. 6 Preparing for Cimate Change There are strong indications that cimate change is ikey to affect Pakistan in a number of ways. There is much uncertainty about some, and itte uncertainty about other of these impacts. The Indus Basin depends heaviy on the gaciers of the western Himaayas which act as a reservoir, capturing snow and rain, hoding the water and reeasing it into the rivers which feed the pain. It is now cear that cimate change is aready affecting these western gaciers in a dramatic fashion (far more seriousy, for exampe, than in the damper eastern Himaayas). Whie the science is sti in its infancy, best estimates 7 (fig. 3.6) are that there wi be fifty years of gacia retreat, during which time river fows wi increase. This especiay in combination with predicted more fashier rainfa is ikey to exacerbate aready serious probems of fooding and draining, especiay in Fig. 3.6: Accumuated effects of degaciation on Indus river fows over ten decades Source: Rees et a., Briscoe, John, and R.P.S. Maik, India s Water Economy: Bracing for a Turbuent Future, Oxford University Press, New Dehi, Rees, Gwyn, and David Cains, An assessment of the potentia impacts of the Himaayas, Draft Report, HR Waingford, Apri

56 The Chaenges of the Present and the Necessary Responses the ower parts of the basin, in the next few decades. But then the gacia reservoirs wi be empty, and there are ikey to be dramatic decreases in river fows as shown in fig. 3.6, conceivaby by a terrifying 3 percent to 4 percent in the Indus Basin. Degaciation is, of course, not the ony way in which cimate change is ikey to affect the avaiabiity and timing of runoff in the subcontinent. The Intergovernmenta Pane on Cimate Change (IPCC) uses ten Genera Circuation modes, nine of which project that precipitation during the summer monsoon wi increase substantiay (fig. 3.7). Degaciation is going to resut in inadvertent mining of the water banks of the Himaayas. This is going to resut in increased runoff (and sit oads) for a few decades, to be foowed by major, permanent reductions in runoff. Fig. 3.8: Predicted change in number of rainy days from the decreased rainfa IPCC mode Fig. 3.7: Change in South Asia summer rainfa predicted by nine Genera Circuation Cimate Modes Change in precipitation (%) Mode Source: IPCC, 24. The IPCC has used a regiona mode (curiousy based on the one goba mode which showed reduced precipitation) to expore possibe changes in the number of rainy days and in extreme rainfa in India (with obvious extrapoations to Pakistan). This mode predicted a decrease in the number of rainy days (fig. 3.8) but substantia increases in extreme precipitation events (fig. 3.9). What does seem ikey is that cimate change wi increase the variabiity of aready highy variabe rainfa patterns, requiring greater investments in managing both scarcity and foods. From this fog of information the foowing concusions emerge very ceary: Source: IPCC. Fig. 3.9: Predicted change in rainfa intensity (in mm per day) from the decreased rainfa IPCC mode Source: IPCC. 27

57 Pakistan's Water Economy Cimate change is ikey to substantiay increase overa monsoona rainfa in Pakistan, but this is ikey to be poory distributed in the sense that much of the additiona rainfa is ikey to be in highintensity storm events. The area affected by fooding is ikey to increase substantiay in the coming decades as the gaciers met and as rainfa intensity increases. Water scarcity is forecast to become widespread in Pakistan in a future which is, given the fact that changing water use habits takes decades to effect, just around the corner. The next severa decades offer a window of opportunity, in which there is ikey to be more water, to prepare for a future in which the quantity of water avaiabe is ikey to be substantiay reduced. What, then, are the impications of these changes? Despite the many uncertainties, they incude: a need for arge investments in water storage. As described earier, Pakistan actuay has reativey itte capacity to store water. For exampe, whereas there is about 9 days of storage capacity on the Coorado and Murray-Daring rivers, there is ony about 3 days of storage capacity in the Indus Basin. Accordingy, major investments need to be made to increase capacity to store water, in both surface water and groundwater reservoirs, in projects sma (such as oca rainwater harvesting) and big (such as arge dams). In so doing, however, there is a need for concomitant adoption of quite different deveopment and management strategies. It must be understood that storage projects shoud primariy be for improving the reiabiity of suppying existing demands and for meeting historicay deprived environmenta uses, and not for creating and serving new demands (which simutaneousy inevitaby means curtaiing existing downstream uses.) The meting of the gaciers offers Pakistan a window of opportunity, first, to make productive use of this windfa, but aso to understand that this window shoud be used to prepare for the very hard days, with substantia fow reductions in the Himaayan region, which ie ahead. Whie the exact shape of the future cimate regime is uncertain, it is very ikey that there wi be greater variabiity both of droughts and foods. As was shown in a detaied examination by the Nationa Atmospheric and Oceans Administration of US water practices, the best preparation for managing unpredictabe future changes is to put in pace a water resource infrastructure and management system which is driven to a much greater degree by knowedge (incuding but not imited to hydroogic knowedge), and which is designed and operated to be much more fexibe and adaptive. Fooding, which aready affects substantia areas of Pakistan (incuding areas in and outside of the Indus Basin), has yet to be effectivey addressed. Pakistan is ony now starting to expore the combinations of hard interventions (to protect high-vaue infrastructure) and soft interventions (smart adaptation to iving with foods, incuding changing and use patterns and cropping patterns, and construction of emergency sheters for peope and animas), which have been used to considerabe effect in countries as diverse as the United States 8 and Bangadesh, 9 and are gobayaccepted best practice. Adapting to Scarcity: An Imminent Water Gap Pakistan is cose to using a of its avaiabe water resources in most years. Shahid Ahmad 1 has 8 Mier, Barbara A., A. Whitock, and R.C. Hughes, Food Management the TVA experience, Tennessee Vaey Authority, Oak Ridge, Ainun Nishat, powerpoint presentation on food management in Bangadesh, Word Bank Water Week, Paper 5. 28

58 The Chaenges of the Present and the Necessary Responses summarized the situation as foows: The ongterm sustainabe average annua net infow of the Indus Basin is 175 biion m 3. Cana diversions over the same period have averaged 128 biion m 3, with an average of 35 biion m 3 fowing downstream of Kotri Barrage to the sea. In a system with itte storage and considerabe variabiity, however, averages can be deceptive fig. 3.1 shows, again in Ahmad s words, that Pakistan is now essentiay at the imit of its surface water resources. Simiary, on groundwater: 11 Estimates of groundwater avaiabiity have been made in severa studies, and average around 63 biion m 3. Abstraction of groundwater for irrigation and for urban and rura drinking water suppies is estimated as about 52 biion m 3. Whie these figures may suggest some potentia for further expoitation, they are based on very itte actua monitoring of the resources or the abstraction and shoud be treated with caution. Other evidence, such as increasing sainity of groundwater due to redistribution of sats in the aquifer and decining water eves, suggests that there is itte, if any, further potentia for groundwater expoitation. The bottom ine is cear Pakistan is currenty cose to using a of the avaiabe surface water and groundwater, yet it is projected that over 3 percent more water wi be needed over the next twenty years to meet increased agricutura, domestic, and industria demands (fig. 3.11). Getting more Product per Drop: The Performance Gap There are severa coroaries to the fact of ooming water scarcity in Pakistan: the focus of attention Fig. 3.1: Annua cana diversions and escapages to the sea 2 15 Fows (MAF) Years Existing cana diversion Escapages to the sea Source: The Word Bank anaysis. 11 Paper 5. 29

59 Pakistan's Water Economy MAF Fig. 3.11: Projected demand for water Source: Hasan, 25. wi have to shift from productivity per unit of and to productivity per unit of water, and the major chaenge wi be to get more from ess more crops, more income, more jobs per unit of water. A basic point of departure is that there is abundant evidence that irrigated agricuture in Pakistan is not efficient. As shown in fig. 3.12, a comparison of wheat yieds in Caifornia (USA), Tons/ha Fig. 3.12: Wheat yieds per unit of and and water Imperia Vaey, USA Source: Ahmad, 25. Tons/ha yied Bhakra, India Industry Municipa and rura water suppy Agricuture at the farm gate kg/m3 Punjab, Pakistan 1.2 the Indian Punjab, and the Pakistani Punjab shows that productivity in Pakistan reative to India and Caifornia is about 3:6:1 per unit of and, and about 5:8:1 per unit of water. A second important macro perspective emerges from data anayzing the reationship between kg/cubic meter overa water avaiabiity and production. As shown in fig. 3.13, drought has a dramatic impact on production in non-irrigated areas, but remarkaby Fig. 3.13: Drought effect on yieds 3. Pre-green 2.5 revoution Green revoution+ Source: The Word Bank, 23. Post-green revoution Wheat yied (Mt/Ha) Punjab Sindh NWFP Baochistan Pakistan Drought itte impact in irrigated areas. This is confirmed in fig. 3.14, which shows the very modest impact of drought on irrigated crops and, indeed, by the production figures for Apri 25. Despite an unusuay dry monsoon season (with Tarbea not fiing for the first time) and despite some drastic prognostications of production eves as ow as 12 miion tonnes, Pakistan has had a bumper wheat crop: overa production was 22 miion tonnes, 1 percent higher than the government s target. 12 These data suggest that irrigation is obviousy vita for high and stabe eves of crop production, and that a ot more efficiency ( crop per drop ) can be squeezed out of the system. As pointed out by Shahid Ahmad, 13 the most important basic principe in irrigation is to deiver a reiabe suppy of water. In an uncertain environment, farmers wi not invest in seeds, fertiizers, and and preparation, and consequenty yieds and water productivity wi suffer. A second basic principe has to do with timing. At various times in a crop s growth cyce, water stress can be particuary damaging. In principe water 12 Minding the wheat market, Editoria, Dawn, 14 Apri Paper 5. 3

60 The Chaenges of the Present and the Necessary Responses Fig. 3.14: Crop production and drought ( Tons) 7, 6, 5, 4, 3, 2, 1, 1, Cana Diversion Sugarcane Tota Food Grain Wheat Rice Cotton Drought Onset Miion Acre Feet Source: The Word Bank, 23. Years entitements for a users of an outet are equa under the warabandi system; in fact numerous studies have shown that there is a high degree of madistribution which favors head-enders and discriminates against tai-enders, with serious impications for equity and productivity. Within watercourses, tai-enders typicay get about 2 percent ess water than those in the midde, who in turn get about 2 percent ess than headenders. 14 Figure 3.15 shows how head-enders systematicay do much better than tai-enders, and fig shows that there coud be major overa production gains by re-distribution of water currenty used in excess by head-enders. A detaied anaysis by IWMI 15 (fig. 3.17) shows that inequity in water distribution in the Pakistani Fig. 3.15: Crop yieds for head- and tai-enders Tai Source: Qureshi, 25. Head Wheat IRRI Rice Basmati Rice Sugarcane (x1) Punjab is substantiay worse than it is in the Indian Punjab. At the high productivity end, farmers in 14 Paper Internationa Water Management Institute Research Report No

61 Pakistan's Water Economy Net Income (Rs/ha) Fig. 3.16: Returns to irrigation ocation in a cana Source: Bhatia, 25. Fig. 3.17: Differences in wheat yieds across distributaries Indian Punjab Pakistani Punjab Yied (t/ha) Yied (t/ha) Source: IWMI, Head Midde Tai Batta Rohera Distributary ocation Maximum Mean Minimum Laan Khadir FAO Distributary ocation Maximum Mean Minimum Pakistan are doing at east as we as farmers in India, but the spread between high- and ow-yieds is much greater in Pakistan, due in part to more unequa water distribution. These inequaities pay an important roe in the expanation of the ower productivity of Pakistan s irrigation systems. When these suppy uncertainties are resoved, the impacts on productivity can be very arge: the productivity of water from tubewes (avaiabe on demand) is twice that of cana water. 16 For these reasons, there is broad agreement that the most promising intervention is to provide equitabe water distribution to the head- and tai-end reaches, 17 with the issues of transparent administration of water entitements, and accountabe, efficient provision of irrigation services again being key eements. There is aso growing evidence that different water appication regimes coud greaty increase the amount of crop per drop. Studies conducted by PARC and IWMI indicated that extensification rather than intensification coud greaty increase productivity. As shown in fig. 3.18, deficit and suppementa irrigation produce much higher returns per unit of water compared to compete irrigation under farmers practices and rainfed farming systems. The deficit and suppementa irrigation had increased the water productivity two- to three-fods compared to rainfed systems. 18 Tons/ha Fig. 3.18: Yied and water productivity of wheat under different irrigation scheduing strategies Rainfed tons/ha Farmers' Practice Source: Ahmad, 25. kg/m3 Fu Suppementa Irrigation Deficit Suppementa Irrigation Kg/m3 16 Paper Ibid. 18 Ibid. 32

62 The Chaenges of the Present and the Necessary Responses In situations of water scarcity, however, it is important to ook at productivity not just in terms of units of water appied, but to take into account that return fows to sweetwater aquifers are not osses, but water that is sti avaiabe for other uses and users. (This is a concept that has ong been appied in the subcontinent for exampe, in the 195s Indus Waters Treaty discussions of the net effects of upstream abstractions in Kashmir on the avaiabiity of water from the Jheum and Chenab. 19 ) Consider the basic arithmetic of oca water baances under equiibrium as shown in the equation beow: Appied water = consumed water + non-consumed water Consumed water = beneficia evapotranspiration + non-beneficia evapotranspiration Non-consumed water = water recharging the aquifer + water returning to streams Now consider three issues of productivity water productivity, energy productivity, and economic productivity. (a) Water productivity: In simpified terms the basic objective of increasing productivity of water is: in sweetwater areas the measure of water productivity is to maximize the proportion of consumed water which goes to beneficia evapotransipration (Et) (and minimize the proportion due to non-beneficia Et.) in saine areas here water which goes to the aquifer is no onger of any use, and therefore the objective is to reduce the sum of water ost to non-beneficia evapotranspiration and water which is added to the saine aquifer. (b) Energy productivity: Cana water which infitrates into sweetwater aquifers is not ost, but it takes energy to ift the water again. And therefore it is not appropriate to consider very eaky systems to be fine, especiay as aquifer depths increase. (c) Economic productivity: If the prices incuding those reating to externaities and incentives are right then the summation of a costs water, energy, and those of greater precision in the appication of these and other inputs are a summed up in the economic vaue of a crop and it is thus the economic return criterion which is the appropriate one in assessing the efficiency of different regimes. Shahid Ahmad s background paper 2 ooks at the issue of water productivity from the Et perspective. The major findings incude: There is considerabe oss of water due to inefficient irrigation appication at the fied eve. Because of poor surface irrigation hydrauics and uneveed fieds, farmers appy enough water to cover the highest spot in the fied. The resut is not ony excessive non-beneficia Et, but aso oss of nutrients especiay nitrates, and poution of the groundwater with these excess appications of agricutura chemicas. This is a particuar probem in the cana commands which have high Authorized Cana Water Aowances. There is much non-beneficia Et due to weeds, shrubs, and pants that grow aong the waterways, weeds in faow fieds, and vegetation in wasteands. As the weed infestation is very high in the Indus Basin, it is expected that amost 2 3 percent of water is consumed by weeds and thus regarded as non-beneficia Et. Watercourses are the main source of weed seeds to the fieds. Weeds grown aong the watercourse shed seeds which utimatey reach the fied through the irrigation water. Weeds in cropped fieds not ony reduce crop yied but aso consume water. A weeds 19 N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, Paper 5. 33

63 Pakistan's Water Economy shoud be reguary eradicated as part of the watercourse maintenance activity, something that wi be substantiay improved as part of the major nationa program for watercourse ining. Et studies were conducted by IWMI and PARC using remote sensing techniques in areas where drought had positive impacts in reducing waterogging and increasing productivity. These studies showed that over-irrigation is a common practice in southern Punjab and Sindh. Evaporation from faow fieds and waterogged areas increases non-beneficia Et and contributes to accumuation of sats in the surface soi. The major impications are that there can be major reductions in non-beneficia Et by: p reducing evaporation from water appied to irrigated fieds through improved irrigation technoogies such as precision and eveing and furrow irrigation in the IBIS, and drip irrigation in areas where water is at premium, and, as shown in fig. 3.19, introduction of modern agronomic practices such as residue farming using zero-ti panting, muching of fruit pants, or changing crop panting dates to match periods of ess evaporative demand p reducing evaporation from faow and by decreasing area of free water surfaces, decreasing non-beneficia or essbeneficia vegetation, and controing weeds p minimizing sainization of return fows by minimizing fows through saine sois or through saine groundwater to reduce poution caused by the movement of sats into recoverabe irrigation return fows p shunting pouted water to sinks to avoid the need to diute with fresh water, saine or otherwise pouted water shoud be shunted directy to sinks p reusing return fows by integrating crops, forest pants, forages, and aquacuture into and use to utiize different quaities of water in a sustainabe manner There is agreement among agronomic and water professionas that the overa productivity of the IBIS coud be improved by reaocating water from areas where production per unit of water oss is high. As pointed out by Shahid Ahmad: reaocation wi generay be difficut between the provinces as the water apportionment and rights are we defined. However, there is a possibiity that each province ooks into Authorized Cana Water Aocations of various cana commands and reaocates water aowance based on evapotranspiration, cropping pattern, and cropping intensity to have sustainabiity on ong-term basis. This wi dramaticay increase the economic productivity of water, both under the deficit and excess cana commands. As discussed esewhere in this Report, the use of such technocratic discretion woud fy in the face of the singe-most important need in the system, namey to reduce discretion and to put in pace systems which make entitements invioabe, and which reduce the appication of administrative discretion. Fortunatey, there is another way of moving towards the desired goa of greater productivity. Fig. 3.19: Production (kg/cubic meter of water) under different agricutura practices Zero Tiage Source: Amir, 25. Laser Leveing Conventiona 34

64 The Chaenges of the Present and the Necessary Responses Pervaiz Amir, in his background paper on agricuture, 21 has outined the appropriate way to encourage such efficiency gains. Entitements (based on historic use) are, to a arge degree, estabished for the major parts of the Indus Basin system. There shoud be no command-and-contro overriding these entitements, even in the case of greater productivity. What there shoud be, instead, is an aggressive effort to make cear to both those who have too much water and those who have too itte, how reaocation (perhaps initiay as a ease and eventuay as permanent transfers) might benefit both parties, and then encourage water trades (with wiing buyers paying wiing seers). Such trades woud ogicay start within specific cana commands, but then expand to trades between cana commands, and eventuay trades between provinces. Finay, crop productivity obviousy depends on much more than just the suppy of water. Box 3.1 describes the ways in which distortions in pubic subsidies can give rise to absurd water use patterns (in this case in the sugar industry). It is apparent that water (not and) is the main constraint, and there is growing attention to the quite different water requirements of different crops (fig. 3.2). An acre of sugarcane, for exampe, consumes as much as eight times the water needed by wheat. Increased attention is accordingy now being given to producing crops that can yied more with ess water, withstand water-scarce and drought conditions, and thrive on ow quaity (saine/akaine) water, 23 and to the effect of different agronomic practices on water productivity. Successfu reforms in the water sector need, therefore, to be accompanied by simutaneous improvements on the agricutura side, in production techniques, marketing efficiencies, and in research, education, and extension. 24 There is a Box 3.1: How other distortions affect the water economy the case of sugarcane (from the background paper by Imran Ai 22 ) The inkages between industria needs and impacts and water quaity and suppy can be seen in the case of the sugarcane. Starting with one sugar mi in 1947, Pakistan now has over 8. Sugar mis are often a reward for poitica services and support. A arge number are owned by poiticay important eements and owe their existence to poitica gratification. Aso, in the 199s the Nawaz Sharif government induced financia institutions to extend oans for sugar mis, to which Sharif s Ittefaq Foundries was a capita goods suppier. Sugar aso seemed a reativey uncompicated form of earning industria rents. The Pakistani consumer had to subsidize the processor, since internationa sugar prices traditionay remained beow domestic prices. However, beyond a ow percentage of tota cropped area, sugarcane production is not ecoogicay suited to an arid region ike the Indus Basin. Now, farmers need, or want, to grow enough sugarcane to feed 8 mis, creating excessive demand on both surface and tubewe water. Areas with criticay ow groundwater eves have arge standing crops of sugarcane (as we as rice, the other water intensive crop). Shortfas in sugarcane suppy woud create a crisis in the sugar industry, which has the second highest capitaization in the Pakistani stock market, as we as poiticay eminent stakehoders. Additionay, effuents from sugar mis are a significant source of water poution, which is affecting human and ivestock heath. Ceary, on specific issues there are compex options facing the administration, invoving trade-offs between environmenta, hydrauic, socia, agronomic and industria priorities. 21 Paper Paper Paper Paper 9. 35

65 Pakistan's Water Economy Fig. 3.2: Cubic meters of water to produce a ton of produce Potatoes Maize Mik Wheat Soybean Source: Hoefstra, 23. Rice Poutry Eggs Cheese Beef Sugarcane vita pubic sector roe in the production of these pubic goods. But experience in other countries which have undergone recent agricutura diversification (such as Chie, Brazi, and Mexico) has shown that the private sector can pay an equay important roe. As Pervaiz Amir has described: an important driver for higher water efficiency and farm productivity wi be estabishment of hi-tech modern farms with internationa cooperation that show the modern way. Exposing industry eaders to opportunities of joint partnership can hep bring new biotechnoogy, efficiency based systems thinking and internationa marketing perspective to a arger segment of the farm community. In summary, improving the productivity of water used in agricuture is a centra chaenge facing a water-scarce Pakistan. (As pointed out by Shahid Ahmad, since the water required to grow enough food for one person between 3, and 5, cubic meters a year is about 1 times the amount required for househod purposes [1 pd or about 35 cubic meters a year], urban demands are important ocay but not at a nationa scae.) Confronting this chaenge wi require actions on mutipe fronts, not east of which is changing the water suppy system so that it meets the predictabiity, transparency, and fexibiity required for a modern and much more productive agricutura system. Narrowing the Trust Gap One of the defining issues in contemporary Pakistan water management is the pervasive ack of trust, at a eves. 25 It is, again, usefu to start with the Indus Basin treaty, both because of its direct importance to Pakistan, but aso because of the mode it provides in reducing mistrust. The Indus Waters Treaty shows very ceary that a we-defined set of entitements, which are monitored by both stakehoders, and which have cear enforcement mechanisms, can provide a high (not perfect) eve of trust, even when the parties invoved have iteray gone to war severa times. The IWT is a great exampe of how good fences make good neighbors. Now consider the parae issue between provinces in Pakistan. As described earier, the 1991 Water Accord is an enormousy important achievement. There remain a number of important issues on which agreement needs to be reached, incuding how to share fows under drought conditions, how much water to aocate to the deta, and how to manage the demands from some provinces. There is aso a need for putting in pace a modern confict resoution mechanism. These caveats notwithstanding, the Accord is basicay sound and shoud be impemented in its present form. But what has happened? Fifteen years after the Accord was signed there is sti not a sound organization equipped with the right instruments that woud give a parties confidence that the Accord is being impemented transparenty. This is a deporabe missed opportunity, because it has caused mistrust to 25 Described in many of the background papers done for this study. 36

66 The Chaenges of the Present and the Necessary Responses fester and to corrode a host of water-reated and other issues between the provinces. The irony is that, with the Accord in pace, this is so easy to fix! Simiar accords in other countries the Coorado Compact in the US and the Murray- Daring Agreement in Austraia show that once there is a cear agreement, there are three fundamenta impementation requirements. First, that a rigorous, caibrated system for measuring water infows, storages, and outfows be put in pace. Second, that the measurement system be audited by a party which is not ony scrupuousy independent and impartia but is seen to be so by a parties. (In the case of the Coorado the Federa Department of the Interior is the river master ; in the Murray-Daring system, an individua from Western Austraia is retained as the water auditor.) Third, reporting must be totay transparent and avaiabe in rea time for a parties to scrutinize. The great frustration in Pakistan is that, given the Accord, this is so easy to do and yet it has not yet been done. The centra function of IRSA (see box 3.2) is to be this auditor and river master, but it acts more ike a poitica body and does not do this task. For years now a teemetric system for automatic measurement of fows into and out of the main barrages and contro structures has been under impementation, but there is aways something that does not work (further fueing beief that the ack of transparency in the system is being manipuated for nefarious purposes). There is no higher priority for water management in Pakistan than to move aggressivey in putting Box 3.2: The Indus River System Authority (1992) The Water Accord necessitated the creation of an Indus River System Authority (IRSA) for its impementation. The Authority was estabished in December It consists of 5 members, one each to be nominated by each province and the federa government from amongst engineers in irrigation or reated fieds. The first Chairman was the member nominated by the Government of Baochistan, to be foowed by the nominees of the Governments of NWFP, Punjab, and Sindh, and the federa government, and thereafter in the same order. The term of office of the Chairman is one year. The functions of the Authority are as foows: n n n n n n n Lay down the basis for the reguation and distribution of surface waters amongst the provinces according to the aocations and poicies spet out in the Water Accord; Review and specify river and reservoir operation patterns, and periodicay review the system of each operation; Coordinate and reguate the activities of WAPDA in exchange of data between the provinces in connection with the gauging and recording of surface water fows; Determine priorities with reference to sub-cause of cause 14 of the Water Accord for river and reservoir operations for irrigation and hydropower requirements; Compie and review cana withdrawa indents as received from the provinces on 5-daiy or, as the case may be, on 1-daiy basis and issue consoidated operationa directives to WAPDA for making such reeases from reservoirs as the Authority may consider appropriate or consistent with the Water Accord; Sette any question that may arise between two or more provinces in respect of distribution of river and reservoir waters; and Consider and make recommendations on the avaiabiity of water against the aocated shares of provinces within three months of receipt of fuy substantiated water accounts for a new projects for the assistance of the Executive Committee of Nationa Economic Counci (ECNEC). Source: Paper 6. 37

67 Pakistan's Water Economy in pace a totay transparent, impartia system for impementation of the Accord. This situation is mirrored within the provinces. As described earier, one hugey important part of the Accord was that it formaized the entitements for the 24 cana commands in Punjab, the 3 major barrages in Sindh, the 2 barrages serving Baochistan, the 5 canas serving NWFP. 26 Consider the case of Punjab as an exampe. The aocations to the 24 cana commands are specified for 1-daiy periods in both the kharif and rabi seasons in the annex to the Accord (fig. 3.21). 27 And the administrators of the aocation system in Punjab apparenty respect these, for the most part. The irrigation department keeps detaied records of the entitements for each season of the amounts of water actuay deivered, and of the baances for each cana command. (For exampe, as can be seen in the first few entries for the current season, a number of cana commands did not wish to receive their fu shares, but they get credit for this, and can use these saved amounts ater in the season.) This system is very cose to something that woud be idea. The one big missing piece is the transparent and verified impementation of the aocations. And here, again, ack of transparency means that there is discretion, discretion which corrodes beief in the fairness of the system. Many Fig. 3.21: Punjab cana entitements from the 1991 Water Accord 1-Day Seasona Systemwise Adjusted Aocations (Excuding Food Fows & Future Storages) 1 of 8 E1 Source: Government of Pakistan, Punjab Kharif Period F.I.C. M.R. CBOC S.Y.C. S.V.C Trimmu Panjnad Tha Taunsa CABC Greater Tota INT (Upper) (Lower) Tha (1 Cs) Apr May Jun Ju Aug Sep Tota MAF Indus River System Authority, Apportionment of Waters of Indus River System between the Provinces of Pakistan: Agreement 1991 (A chronoogica expose), undated. 27 Ibid. 38

68 The Chaenges of the Present and the Necessary Responses officias, incuding those at senior eves, honesty try to impement the water according to entitements. But they are under a variety of murky and non-transparent pressures to tweak the system, to use discretion for a variety of opaque reasons. These officias are the strongest advocates for moving to verification and transparency at a eves. In some cases, however, what is happening is not tweaking but whoesae destruction of the discipine on which the system fundamentay depends. In his background paper Sarfraz Qureshi 28 describes the existence of a arge number of uncontroed direct outets (DOs) in the Nara Cana in Sindh. These are outets which draw water directy from the main canas that often have no outet contro (gates for exampe, and where these exist they are not easiy controed by the ID). These types of outets are iega under the 1873 Irrigation Act, but have been permitted and a majority has been accorded officia sanction over the years. The cumuative effect of the steady increase in these DOs has been to increase the command area of the Nara Cana by more than 3 percent making it impossibe to distribute water to arge areas in the tai portion of the cana command area without a major increase in diversion and a change to a rotationa method of water distribution among the distributaries since outet discharges become unreiabe if the fow in the cana is outside the range of about 7 11 percent of design discharge. It is common knowedge that arge amounts of money change hands for the sanctioning of these direct outets. This paradox of a basicay sound aocation system being administered without transparency and accountabiity is repicated down beow the cana commands and into the distributaries, outets, and watercourses. As described in the background paper by Faizu Hasan: Lack of trust among various users, especiay mistrust of sma farmers on the arge farmers and mistrust of the farmers on the state agencies, is at the heart of the water rights issues in Pakistan. A disputes stem from the crisis of confidence. The sma and medium farmers have the apprehension over the arge farmers of using more water. The sma and medium farmers have an understanding that the irrigation department is not equitaby distributing the water, therefore, providing more water to the infuentia farmers. Therefore, there is a need to deveop the confidence buiding measures at a the eves. Deays in justice and poor accountabiity have aso shaken the confidence of the farmers on the state agencies. It is obvious that Pakistan faces a series of serious natura chaenges in managing its water resources. As described by Siegmann and Shezad, it is, in fact, the human-induced uncertainties that are of greatest concern to common farmers: the avaiabiity of water for irrigation often varies during the season (despite efforts to improve forecasts, there are no guarantees), but this variabiity and uncertainty does not seem to be the primary issue with farmers transparency and timey information, participation in decisions about what to do when there are shortages, and deivery on whatever is agreed, are the more important issues. Or in the words of Faizu Hasan: Farmers generay understand the natura variabiity of their main source of water suppy, the Indus River, but want to know what their share is and when it wi be deivered with this information they can make good or at east informed and ower risk decisions on how best to use both the water and their and (and possiby respond more appropriatey to incentives). The overa situation and some of its ramifications are summarized by Pervaiz Amir in his background paper: The ack of transparency in information sharing and hiding data that shoud be in the pubic domain has created an environment of distrust and despair. Uness the grievances in reation to water entitements, 28 Paper 1. 39

69 Pakistan's Water Economy distribution, and governance are addressed in a comprehensive manner, dams or even other arge scae water infrastructure projects wi be bamed for a the shortcomings in water sector. In the shadows of discretion and ack of accountabiity, of course, urk a sorts of interests of powerfu peope who manipuate the system for their ends, and of those in the bureaucracies who serve them and are rewarded for this service. The amounts of money that circuate in service of these distortions are very arge, and those who benefit from it wi not easiy acquiesce to changes. But there is a widespread sense in Pakistan that this has now gone too far for too ong, and there woud unquestionaby be massive support for poiticians who ensured that entitements were made pubic, and that there was unimpeachabe information pubicy avaiabe on who is getting what. Modern measurement and computer technoogy makes it much easier to do this today. In the words of an astute observer of simiar probems in India: an entire range of activities which normay incubate corruption can be made transparent through the intervention of technoogy The government must concentrate on enabing technoogy to overarch human venaity, and empower the ordinary person to access and monitor the avaiabiity of services directy. 29 Maintaining the Resource Base Groundwater As described earier, the initiation of arge-scae irrigation in the Indus pains started a arge, and sti on-going transformation in the hydrogeoogy of the basin. First there was the injection of hundreds of biions of cubic meters of water into the aquifers, quantities of recharge which far exceeded the subsurface horizonta drainage capacity of the aquifer system. This ed to an inexorabe rise of the water tabe (from an average of about 8 feet in 19 to 1 feet a century ater, shown in fig. 3.22) and the mobiization of arge amounts of sat, as hundreds of biions of cubic Irrigated area (m acres) Fig. 3.22: Irrigation expansion and groundwater eves Cutivabe area Groundwater tabe Source: IWASRI/WAPDA, Groundwater depth (ft) meters of surface water were stored in the aquifers. The resut was arge-scae waterogging and sainity, but aso the ready avaiabiity of arge amounts of groundwater which coud be used to suppement cana water suppies. And so in the 196s extensive groundwater expoitation got under way, a process which has continued unabated unti the present. The 196s saw the start of the era of arge-scae groundwater expoitation. As described in the background paper by van Steenbergen and Gohar, 3 over 6, private tubewes have been sunk. It is estimated that 75 percent of the increase in water suppies in the ast twenty-five years is to be attributed to pubic and private groundwater expoitation (fig. 3.23). The investment on these private tubewes is of the order of 3 4 biion rupees, whereas the annua benefits in the form of agricutura production are estimated at 2 biion rupees, roughy equivaent to 5 percent of GDP. In addition, most towns and many industries rey for their water suppy on groundwater. To a arge degree this groundwater system has become 29 Pavan K. Varma, Being Indian, Penguin, Paper 11. 4

70 The Chaenges of the Present and the Necessary Responses Miion acre feet per year Fig. 3.23: The growing roe of groundwater irrigation Cana Groundwater Source: Steenbergen and Gohar, 25. the primary storage mechanism used to distribute avaiabe water between the monsoon (Kharif ) and dry season (Rabi). 31 It is usefu to consider the history of groundwater deveopment in Pakistan in three stages. Stage 1 was the pre-cana era of deep and stabe water eves, in which ony sma and oca use was made of groundwater. The main feature of Stage 2, starting in the nineteenth century, was the injection of massive amounts of seepage into the aquifers, but sti of very itte use of groundwater. Stage 3 started in the 196s, and invoved the appication of new technoogies on a massive scae for the expoitation of groundwater. Stage 4 started some years back in the barani areas (where recharge is much smaer), and is now starting in the main Indus Basin. It is a stage in which the primary chaenge becomes preserving the resource base the groundwater on which so much ife and weath now depends. As shown for the Punjab in figs and 3.25, groundwater is in baance in the kharif season, but now systematicay negative in the rabi season, meaning that groundwater is being mined and water tabes must fa. And the eves are indeed faing (fig. 3.26) The management chaenge is to stabiize the groundwater tabe at eves where the cost of pumping is not prohibitive (see fig. 3.27) and in which primary attention is given to understanding and managing the quaity and especiay the sainity of the aquifers. Athough groundwater eves are aready very deep in some barani areas Fig. 3.24: Punjab water baance: norma year (MAF) Recharge Discharge 5 Recharge from 4 River Return 3 fow from GW Abstraction 2 Recharge 1 from Irrigation System Recharge from Rainfa Source: Steenbergen and Gohar, Loss from storage Base fow to rivers Non-beneficia ET osses Groundwater Abstraction (Pubic + Private) 31 Paper 5. 41

71 Pakistan's Water Economy Fig. 3.25: Punjab water baance: drought year (MAF) Recharge Discharge 5 Recharge from Rivers 4 Return fow from GW Abstraction Loss from storage Base fow to rivers Recharge from 2 Irrigation System 2 Non-beneficia ET osses Recharge 1from Rainfa 1 1 Groundwater Abstraction (Pubic + Private) Source: Steenbergen and Gohar, 25. (farmers are driing wes to 1, feet in the fruitgrowing Pishin district of Baochistan), in the pains groundwater tabes are sti fairy shaow (fig. 3.28), something which good management woud aim to preserve. In none of the past stages have conscious management payed any roe in the fate of the aquifer. In Stage 4 it is precisey the abiity to consciousy manage the aquifer which constitutes a huge and quite new chaenge to the peope and the state. The faiure to manage groundwater in the barani areas is a sautary warning. As described by van Steenbergen and Gohar: 32 Overuse of groundwater is dramatic in some of the barani areas of Pakistan (with) orchards in Baochistan being dismanted and by out-migration, destabiizing a region that is aready voatie by nature and ocation. the constant overuse of groundwater in the ast decades has Water tabe-feet Fig. 3.26: Decining groundwater tabe in Punjab Water Tabe Decine in SGW Zone of Chaj Daob Oct Mar- 99 Jun- 99 Oct- 99 Mar- Period Jun- Oct- Dec-Apr- 1 Source: Steenbergen and Gohar, 25. SZ- I SZ-II SZ - III Pumping cost per AF (Rs) Fig. 3.27: Effect of the depth to the water on ast of pumping Tota cost Construction cost Energy cost Average water tabe depth (ft) Source: Steenbergen and Gohar, Paper

72 The Chaenges of the Present and the Necessary Responses Percent area 1% 8% 6% 4% 2% Fig. 3.28: Depth of water tabe by province % NWFP >1 ft 5 1 ft <5 ft Punjab Sindh Baochistan Source: Steenbergen and Gohar, 25. Pakistan made the barani areas of Pakistan ess resiient to drought. This descent into non-sustainabiity, and the huge associated socia, economic, and poitica costs shoud be considered as a warning of the importance of action to manage the groundwater of the Indus Basin. There are specia chaenges of managing groundwater in the vicinity of Pakistan s burgeoning cities, most of which depend on groundwater for water suppy. The arge-scae expoitation of the aquifer underneath the cities and in urban periphery has however ed to faing water tabes and to contamination of water suppies by eaking sewerage systems and septic tanks as documented for Karachi, for exampe. In Quetta the over-expoitation of the confined aquifer by agricutura users around the city has aready ed to a number of doomsday projections, predicting that in a foreseeabe future even the suppy from deep fossi groundwater to the capita of Baochistan province wi dry up. It is estimated that the remaining groundwater may be exhausted by And the water tabe around Lahore has faen at more than haf a meter a year for the ast thirty years, resuting in a cup-shaped depression prone to the migration of saine groundwater. Goba experience suggests severa things about managing scarce groundwater. First, it is a very difficut task, even under good governance conditions. Second, it requires changes in severa reated areas, incuding ega and administrative. Of particuar importance (and sensitivity), it means that the rights of individuas to pump as much water as they wish from their and have to be curtaied. Water rights have to be vested in the state, with individuas then given entitements (usuay reated to historic use) to pump specific voumes. The administrative chaenge is immense, both to register historic use (and entitements) and to manage those. Van Steenbergen and Gohar 34 describe some of the experience to date in this regard: The Groundwater Rights Administration Ordinance is a usefu mode for barani areas, whereas the Groundwater Reguatory Framework deveoped but not yet endorsed in Punjab can serve as an exampe for the auvia aquifer systems in the Indus vaey. At the same time preferaby within the Provincia Irrigation and Drainage Authorities Groundwater Management Units need to be estabished and activated in each Province. Past history showed that such efforts quicky went in dormancy, for instance in Baochistan and Punjab. By giving the Units a centra roe in the enforcement of groundwater egisation and in the impementation of programs they can become vibrant organizations in their own right. In a instances where groundwater management has had some success, the foundation has been Aquifer User Associations who are supported very strongy by government who have a vita roe in providing the information and systems for making decisions (for exampe on the 33 Paper Ibid. 43

73 Pakistan's Water Economy tota amount of pumping from an aquifer) and in providing the necessary ega and administrative support. In the case of the Indus Basin there are three compicating factors. First, some of the aquifers are very arge, much too arge to be managed by a singe Aquifer User Association. (Experience in the huge Ogaaa Aquifer which stretches from Minnesota to Texas shows that a singe aquifer can, indeed must, be broken down into pieces which can be managed by oca associations. 35 The smaer such units become, the ess reaistic it is to treat them as individua aquifers; but the arger they become the more difficut the management of users becomes. This wi require, as with so much, a earning approach and adaptive management). Second, it is particuary important to manage the sweetwater aquifers which border saine aquifers with specia care. The tendency wi be for more pumping from the sweetwater aquifer, thus causing the phreatic eve in the sweetwater area to fa reative to the eve in the saine aquifer, inducing saine intrusion and destroying the sweetwater aquifer. Third and finay, given the highy integrated nature of the cana and groundwater systems, integrated management of surface water and groundwater is a must. What this suggests is that a pragmatic initia approach woud be to deveop aquifer associations on the foundation of the Farmers Organizations (FOs) which are being formed in various provinces for management of water distribution at the distributary cana eve. And here a key issue is sequencing as ong as the FOs are weak, they shoud not be encumbered with the compex additiona task of extending their mandate to cover groundwater, too. But once the FOs find their feet, then the next step shoud be to expand the scope of their work to incude both surface water and groundwater. The forms of organization woud necessariy be different in different parts of the country. As suggested by Gohar: 36 in the Indus Basin there are 43 main cana commands, for which aggregate and distributary-eve water baances coud be deveoped as a basis for the formation of integrated surface water/groundwater user associations. In the mountainous areas (such as the Pishin-Lora, Quetta Vaey, and Bund Kushdi Khan areas of Baochistan) water baances have been or coud be deveoped, and provide the knowedge base for the deveopment of aquifer associations. In their background paper, van Steenbergen and Gohar 37 describe an initia experience with some eements of such an approach: This approach worked we in the Kamaia Distributary that takes off from Buraa Branch Cana of LCC. The initia response of farmers and oca agencies was ukewarm, but after a first awareness buiding stage the ice was broken. During the course of the piot, participatory piezometers were instaed at farmers and and oca water management was discussed in penary. The resuts were a shift of paddy cutivation to other crops and water reeases to the tai ends of the distributary for the first time in three years. In a arge number of deveoping countries (incuding Mexico 38 and India 39 ), this intrinsicay difficut task has been greaty compicated by a tradition of subsidizing eectricity for groundwater pumping. This genie, ike most other genies, is very difficut to put back in the box, and it means that stabiization of aquifer eves (which is inevitabe, one way or another) wi come at much higher economic, socia, and environmenta costs. 35 White, Stephen E., and David E. Kromm, Loca groundwater management effectiveness in the Coorado and Kansas Ogaaa Region, Natura Resources Journa, Vo. 35, Shamshad Gohar, persona communication. 37 Paper Kemper, Karin, and John Briscoe, Mexico: Poicy Options for Aquifer Stabiization, The Word Bank, Briscoe, John, and R.P.S. Maik, India s Water Economy: Bracing for a Turbuent Future, Oxford University Press, New Dehi,

74 The Chaenges of the Present and the Necessary Responses The situation in Pakistan is not idea tariffs for agricutura tubewes are approximatey 35 percent beow rates for the domestic or industria uses (with serious anomaies in Baochistan, where the subsidies are much higher and have been fundamenta to digging a hoe so deep that in paces escape is amost impossibe). In addition, at present 86 percent of tubewes are powered by diese motors, and thus unaffected by eectricity prices. But this wi change as rura eectrification improves and as the groundwater tabe fas. As in a other countries, there are and wi be popuist temptations to subsidize energy for pumping groundwater. A high priority for poicymakers at both the nationa and provincia eves is not to succumb to such pressures. If there was to be a decision to increase subsidies to agricuture, then these subsidies shoud be ones that enhance water productivity (as has been done in Mexico 4 ), not destroy the resource base. This management wi not be ony an issue of managing quantity the issues of quaity are equay important, and cosey reated to the quantitative aspects of aquifer management. Most peope in rura and urban Pakistan depend on groundwater for their drinking water. Of the major towns, ony Karachi and Isamabad rey primariy on surface water sources. With the emergence of the probem of arsenic contamination in the Ganges-Brahmaputra Basin, there is now concern about this issue in Pakistan, too. The extent of arsenic contamination of groundwater has recenty been documented for the first time. Preiminary findings of the Nationa Water Quaity Monitoring Programme indicate that arsenic found its way in arge number of water sampes from cities such as Bhawapur, Mutan and Sheikhupura and Lahore. 41 Figures 3.29 and 3.3 show the eves of arsenic, reative to the WHO guideine of 1 parts per biion (ppb). Fig. 3.29: Arsenic in groundwater in Punjab 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Arsenic concentration % more than 5 ppb Arsenic concentration % 1 5 ppb Arsenic concentration %upto1ppb % Bhawapur DG Khan Layyah Mutan Jhang Muzaffargarh Percentage RY Khan Districts Source: Steenbergen and Gohar, Kemper, Karin, and John Briscoe, Mexico: Poicy Options for Aquifer Stabiization, The Word Bank, Paper

75 Pakistan's Water Economy Fig. 3.3: Arsenic in groundwater in Sindh 1% 9% 8% Percentage 7% 6% 5% 4% 3% 2% 1% Arsenic concentration % more than 5 ppb Arsenic concentration % 1 5 ppb Arsenic concentration % up to 1 ppb % Dadu Khairpur Nawab Shah Tharparker Districts Source: Steenbergen and Gohar, 25. The presence of fuoride in the groundwater is aso a potentia heath risk. A survey of 987 sampes from sources of domestic water suppy, showed, however, that they are predominanty ow in fuoride, with 84 percent containing ess than.7 ppm of fuoride.suggesting that fuoride and fuorosis incuding the denta and bone deformation are not uniform but can be serious at specific paces. 42 As concuded in the background paper by van Steenbergen and Gohar: 43 for both arsenic and fuoride contamination, aertness is required without being aarmist. The resut of the recent studies needs to be substantiated, before initiating programs to dea with these issues. It is important at the same time to keep things in perspective and not ose track of the fact that bacterioogica contamination remains the major contamination and cause of morbidity in drinking water. In addition to these natura contamination probems, human-induced contamination now constitutes an additiona threat to the quaity of groundwater. This is especiay serious where aquifers are being used to dispose of ong-ived synthetic organic chemicas and heavy metas, poutants which wi concentrate and persist in aquifers for many decades. (This issue is discussed further in the section on environment.) Finay, the most fundamenta of a quaity chaenges, however, is sainity where wi the sat go? How wi groundwater be managed so that freshwater aquifers are not destroyed by intrusion from saine aquifers? among other things a subject to which we now turn in the next section. 42 Paper Ibid. 46

76 The Chaenges of the Present and the Necessary Responses Maintaining the Resource Base Sainity Management 44 The management of sainity constitutes one of the major chaenges for ong-term sustainabiity of irrigated agricuture in the Indus Basin. Why is sainity such an issue? The basic concern is that high sainity in the root zone greaty inhibits the productivity of most crops. The simpified physics starts with the fact that as rainwater turns into streamfow, it traves through sois and dissoves sats that are naturay present in the sois. When this water is then used for irrigation, most of the water is ost to the atmosphere through the process of evapotranspiration. The sats, however, do not evaporate, but stay behind, generay in the root zone or even on the surface of the soi. In temperate cimates where there is a ot of rainfa and where evapotranspiration rates are ow, the sats are mosty eached out to rivers and eventuay the ocean, and pose itte probem. In arid environments, however, the situation is reversed evapotranspiration rates are very high (meaning that a arge amount of sat stays behind ), and there is itte rainfa or excess water appied to wash the sat out of the root zone and into sinks where it no onger constitutes a threat. Compicating the issue in arid environments is the fact that the process of irrigation often mobiizes arge amounts of sat that were previousy in deep aquifers and sois where they caused no harm. As described in the background paper by Bhutta and Smedema, 45 the sats presenty occurring in the Indus Basin are of a variety of origins. Firsty, there are the fossi sats deposited as a resut of evapotranspiration during the drier period in the geoogica formation of the Indus pains. These sats occur at various ocations and depths in the substrata and in the groundwater. Most of the fossi sat is safey stored in the deeper substrata but some are mobiized by the ongoing tubewe pumping and by the deeper groundwater fows. These mobiized sats then become part of the sat dynamics of the root zone and underying shaow groundwater zone. Secondy, much of the ower basin is of marine origin (having been eevated through movements of the earth and by the deposition of sits from the Indus). Further inand, where the deposits are oder, some of the marine sats in the upper soi have been eached out over time. But in the younger ands of ower Sindh, the marine sats are sti strongy present at shaow depth. Third and finay, there are the sats imported by the Indus irrigation water. Athough this water is mosty of ow sainity (ony some 2 3 ppm at Tarbea and other rim stations), this means that about 3 miion tonnes of sat are being imported each year. Before the advent of arge-scae irrigation, roughy simiar amounts of sat were being exported to the sea. (Minor sat sources, such as those reeased by minera weathering, and imported by fertiizers and rain are generay too insignificant to be considered in the sat management panning.) The advent of arge-scae irrigation had dramatic impications for sainity in the Indus Basin. First, fows of both water and sat to the ocean were reduced. Today, ony about 1 miion tonnes are being returned to the sea each year in the Indus and about 4 miion tonnes via the Left Bank Outfa Drain (LBOD). This means that about 15 miion tonnes of sat (or about 1 tonne of sat per hectare per year of irrigated and) are being stored somewhere in the basin. Second, as described earier, arge amounts of water were dumped into the unsaturated zone above the then-deep aquifers. These waters dissoved some of the sats which had previousy been safey stored we beow the root zone. In 44 This section draws heaviy, and often directy, on the background paper by Bhutta and Smedema (Paper 15). 45 Paper

77 Pakistan's Water Economy many paces, the water tabe has now come cose to or even intersected the surface. This meant arge increases in evaporation, with the sats that were in the water being deposited in the root zone or the soi surface. As described in Chapter 2, by the 196s the waterogging and sainity probem posed a major threat to arge areas of the irrigated pains of the Indus. The response to this chaenge showed what can be done if the nation s and the word s best scientific and technica minds are put to work on a probem. It was reaized that the soution comprised three integrated actions first, to ower the groundwater tabe through massive pumping, thus reducing arge evaporation osses (and the corresponding sat deposition); second, to increase the appication of water to crops, so that sats woud not accumuate in the root zone but be eached down and out of harm s way; and third, to use the incentive of greater crop production to motivate farmers to engage in greater use of groundwater. In many ways this sainity management strategy has worked extraordinariy we over the past forty years on the aggregate (fig. 3.31). But with water, ike poitics, everything is oca. And there are sti substantia areas, especiay in the ower part of the deta, where groundwater is naturay saine and where waterogging and sainity remain immediate probems (fig. 3.32). Paradoxicay, in a country where water scarcity is a ooming probem, it is scarcity which heps reduce the sainity probem! Consider the foowing two exampes. In Sindh the area affected by waterogging and sainity varies enormousy (by a factor of 5 over the 199s) and appears (fig. 3.33) to be directy reated to the quantity of water appied during the previous year. 46 And overa, as described earier, water shortages in the Indus Basin have itte impact on production, because the deeterious effect of water shortages is offset by the positive effect of reduced waterogging and sainity and because of suppementary Fig. 3.31: Long-term trends in severe waterogging Area (Ma) Year Punjab Sindh/Baochistan NWFP Pakistan Source: Bhutta and Smedema, Paper

78 The Chaenges of the Present and the Necessary Responses 1% 8% 6% 4% 2% % Fig. 3.32: Sainity eves by province Sat free Moderatey saine NWFP Punjab Sindh Baoch. Pakistan Source: Bhutta and Smedema, 25. Sighty saine Strongy saine irrigation from groundwater. It is aso sautary to recognize that this happy coincidence cannot persist for ong, because of constraints on both the quaity and quantity of groundwater. Twenty years ago, it was beieved that the ony way of maintaining sat baances in the basin woud be to construct a drainage superhighway which woud transport sats from Punjab, NWFP, and Sindh to the sea. The (panned and inadvertent) successes of the ast decades has ed as refected in the report of the Expert Pane on the Drainage Master Pan to a fundamenta rethinking of the needs for this infrastructure. The genera consensus is that these arge drains (such as the LBOD) are necessary in the sat-pagued ower deta, but that the fundamenta approach is now to reduce the drainabe surpus through more efficient water use and oca use of saine drainage effuent, and that extension of the existing drains further up the pains wi not be necessary. Whie there is much that has been enormousy positive in Pakistan s remarkabe success at stemming the pague of waterogging and sainity, there are aso very worrying signs that this was at east as much good uck as it was good judgment. Experience in other arid areas has shown that sainity management must be buit on a strong knowedge base, both system-wide and ocay. And here, after so many years, there are gaping hoes in the knowedge base even at the system eve. Consider, for exampe, the most basic piece of knowedge, namey a system-wide sat baance Fig. 3.33: Cana diversions and waterogging in Sindh Change in waterogged area Cana diversion previous year Area in 1 ha 3 Cana diversions MAF/yr Source: Steenbergen and Gohar, 25. Years 49

79 Pakistan's Water Economy which woud indicate the fux of sats both horizontay and verticay. The Drainage Master Pan is attempting, for the first time, to construct a system-wide sat baance. Whie there is a reasonabe understanding of what is coming in and what is going out of the system, knowedge of how much sat is being retained in the root zone, or being fushed down to the deep aquifer is rudimentary at best. The first estimate of the Drainage Master Pan was that there are 34 miion tonnes of sat accumuating in the root zone. The WAPDA figures, however, showed that soi sainity eves in the root zone had stabiized in the 199s and actuay decined during the ast five years. This ed to a revised sat baance (fig. 3.34) in which it is estimated that the root zone is actuay osing 3 miion tonnes of sat a year. This is a profoundy important issue. If sat is not managed, there wi be major productivity, socia, and environmenta consequences; and to achieve a sat equiibrium in the fresh groundwater areas it is essentia to know how much sat needs to be exported and where it shoud be stored. This cannot be done without reiabe sat baances at fairy disaggregated eves. Each new era of water deveopment poses new chaenges to water managers. As described earier, over the coming decades groundwater tabes in the sweetwater areas are ikey to continue to fa, in many cases quite rapidy and steepy. In addition to the other chaenges described in the previous section on groundwater, this raises an important sainity concern in the aquifers which border on saine areas. Because as the groundwater tabe fas in the sweetwater area, the hydrauic gradient wi be steeper, and the normay sow horizonta fow of water wi increase, in this case out of the saine aquifers into the sweetwater aquifers. In addition, the heavy pumping of groundwater can cause upconing of saine water from deeper aquifer (which caused more than 25 drainage cum irrigation tubewes instaed in the fresh groundwater zone Fig. 3.34: Approximate current sat baance in the Indus Basin (miion tonnes a year) Mountains Indus 29 Cana diversions 22 3 Sink Pumping from tubewes Root zone =.1 Unsaturated zone Leaching 7 Sink 3 1 Sink 6 7 Saturated zone =11 1 LBOD 4 Evap Pond 7 Sink Sea Source: M.N. Bhutta, persona communication. 5

80 The Chaenges of the Present and the Necessary Responses of SCARP-II to be abandoned 47 ). It is vita to monitor both water and sat fows, so that this process does not become a oca threat. A centra and poiticay sensitive issue is the fact that, from a sainity perspective, there are areas in the Indus pain which are suitabe for irrigated agricuture (generay near the mountains and far from the coast) and others which are not so suitabe (especiay those in the saine ower reaches of the basin). It is usefu to step away, momentariy, from the obvious and very sensitive poitica impications of this gradient and see how other countries have deat and are deaing with simiar probems. A good exampe is the Murray-Daring Basin in Austraia, which is of about the same size and faces many of the same sainity probems. A cornerstone of the Austraian sainity management strategy is to define different strategies for different saine areas. In some areas there is a strategy of saine agricuture, which encourages cropping with sat-resistant crops and the use of saine groundwater for this purpose. In other areas of high sainity not ony is productive agricuture not possibe, but it woud mobiize arge amounts of sat which woud cause systemic harm. In these areas, the strategy is to offer farmers incentives incuding sae of their water entitements to retire their and from irrigation. The impications for Pakistan are obvious there is a need for detaied assessment down to the oca eve, and there is a need to have a support and incentive structure which wi ensure that the right type of agricuture is done in the right areas. Migration of water and other inputs must be a vountary one in which those who are surrendering their right to use them are compensated. In Austraia, the growing water markets do this in a way that farmers in these ow-productive areas do far better from the revenues from seing their water rights than they did by practicing irrigation. Sainity management, then, in the words of the former CEO of Austraia s Murray-Daring Basin Commission is as much about managing human expectations as it is about managing sat. Sat creates its own distributiona impacts which for many areas bear no resembance to the origina design or individua equity within irrigation schemes. Therefore, effective sainity management schemes aways contain a significant restructuring component to enabe individuas to eave the industry in a managed way. This is generay much cheaper than trying to eradicate sainity. In summary, there is an urgent need to invest heaviy in monitoring, and scientific and technica capacity to dea with the sainity issue. At a macro eve it is cear that the difference between sat being imported and sat being exported is about 15 miion tonnes per year. This gives rise to two key questions. Key question 1 where is this sat going? Is it to safe storage or into paces where it wi affect agricuture? Key question 2 there are very arge amounts of sat aready stored at various paces in the soi and groundwater. Are water management actions keeping these out of harm s way, or are these being mobiized (for exampe, through pumping of deep groundwater or through atera movement from saine to fresh aquifers)? For this, managers need to know goba baances but, more importanty, they need: to be abe to get inside the back box and find out what is happening in terms of both stocks (where is the sat?) and fows (where is it moving?), and to have a very good knowedge base for oca situations. In concusion, it is important to note that about 8 percent of irrigated agricuture in Pakistan currenty operates in a argey sat free environment. This figure is not static, however, and maintenance of this proportion depends on good management. For both currenty safe areas and those where sainity eves are high, sound knowedge-based strategies for iving with and managing sainity must be deveoped to avoid adverse ong-term effects on the productivity and sustainabiity of the system. 47 Paper

81 Pakistan's Water Economy Reversing Large Scae Environmenta Degradation 48 Sainity management is the biggest and most fundamenta environmenta chaenge in the Indus Basin. But there are other environmenta chaenges too of managing the coasta zone and deta, of preserving wetands, and of managing poution. The deta The coasta zone of Sindh is highy productive in terms of photosynthetic processes and biodiversity, 49 with about 2 species of fish reported in the deta. The deta produces arge quantities of shrimp about 25, tonnes a year, more than haf of which is exported. Mangroves are a centerpiece of the detaic ecosystem. Estimates using sateite imagery show a steady decine in mangrove coverage in the Indus deta. A 1977 estimate was of 263, ha; a 199 study estimated 16, ha of mangrove forests; and the atest estimate in 23 reported that 16, ha of mudfats are under the mangrove forests aong the coast of Sindh. There are mutipe reasons posited for this decine. The mangroves have traditionay been used as a source of wood for construction. However, today the residents of the coasta viages mainy use them as a source of fodder for ivestock, and as a source of fue. In addition, professiona ivestockers from the interior of Sindh bring arge number of cames to the coasta ands for grazing and browsing mainy during the food season. These factors notwithstanding, it has ong been cear that the reduction in freshwater outfow to the deta and the decrease in sediments and nutrients pay a roe in this decine, and the associated decine in fisheries and iveihoods in the deta. To a substantia degree the retreat of the deta is an inevitabe phenomenon and a part of the bargain struck in order to support arge numbers of peope in the Indus Basin. That said, it has aso ong been recognized that it is important to provide some managed fows to sustain the deta to the degree that this is possibe. This was, in fact, an item which was specificay discussed as part of the Indus Waters Treaty. There is a ongstanding debate about the fows that are needed to maintain reasonabe quaity in the deta. In his definitive history of the Indus Waters Treaty, Guhati 5 records that for sainity repusion at the mouth of the Indus and for purposes of navigation between Kotri and the sea, Pakistan wanted to reserve 17 MAF as an existing use. This was taken up again in 1991 in the discussions of the Water Accord. The need for certain minimum escapage to sea, beow Kotri, to check sea intrusion, was recognized. Sindh hed the view that the optimum eve was 1 MAF, which was discussed at ength, whie other studies indicated higher/ ower figures. It was, therefore, decided that further studies woud be undertaken to estabish the minima escapage needs down-stream Kotri. 51 After many years of discussion, the Ministry of Water and Power has commissioned major studies by internationa consutants to examine the issue of the decine of the deta, the various contributing factors, the roe of diminished fows, and to make recommendations about the quantity and timing of managed fows for the deta. The report is due soon and is expected to resut in a fina agreement. Wetands Pakistan possesses a great variety of wetands from the Indus deta to the high Himaayas. The area of inand waters in Pakistan has been estimated at 48 This section draws heaviy, and often directy, on the background paper by Vakar Zakaria. 49 Paper 3. 5 N.D. Guhati, Indus Waters Treaty: An Exercise in Internationa Mediation, Aied Pubishers, Bombay, Indus River System Authority, Apportionment of Waters of Indus River System between the Provinces of Pakistan: Agreement 1991 (A chronoogica expose), undated. 52

82 The Chaenges of the Present and the Necessary Responses 7,8, ha. Pakistan s Wetands Action Pan, recenty prepared by WWF-Pakistan and NCCW, gives an overview of 53 important wetands of Pakistan, and describes their ocation, area, threats, and management status. Figure 3.35 shows the ocation of important wetands in the country. As is impicit in the description of the major types of important wetands man-made reservoirs (31 percent), brackish akes (35 percent), and freshwater akes or dhands (17 percent) the arge-scae use of water for irrigation has had both positive and negative effects on this environment. Wetands are a vita part of the ecosystem. Exampes of key vaues and functions of wetands in Pakistan incude: Food contro: Kinjhar and Haeji akes reduce the impact of Indus foods, whie Manchar ake accommodates water from Fig. 3.35: Pakistan's wetand resources Source: Zakaria,