Central Asian countries have long been competing over the water resources of the Syr Darya and Amu Darya river basins. Despite political commitment to cooperation, the policies of the five Central Asian republics – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – have largely been driven by uncoordinated and partly contradicting national strategies. This focus on short-term national interests entails significant financial costs and major risks for the future development of the whole region.
“Rethinking Water in Central Asia”, a new report recently released by adelphi and the Central Asia Regional Environmental Centre (CAREC), examines the risks and costs arising from limited cooperation on transboundary water resources and identifies a significant range of negative impacts. Although such costs are hard to quantify, the report estimates that annual opportunity costs amount to more than 4.5 billion USD. Moreover, it shows that every country in the region loses out from lack of cooperation over water.
The transboundary water literature emphasizes the benefits of cooperation over shared waters because integrated, basin-wide planning can generate greater benefits than national planning. Flood control and water storage, for instance, are typically far more efficient in upstream, mountainous areas. In many cases, it would thus be economically smarter for downstream countries to secure these services in upstream countries, even if they had to pay for these.
If water cooperation offers such advantages, why is there such limited cooperation? As in many other international river basins like the Nile or the Mekong, the core of the water management challenge in Central Asia is a perceived conflict of interest between upstream and downstream countries. The main challenge can be described as a trade-off between food security for downstream countries versus energy security for upstream countries.
What differentiates the transboundary basins in Central Asia from many other contested international basins is the presence of an extensive transboundary water infrastructure, a legacy of the region’s shared history as former Soviet republics. During the Soviet era, major dams and reservoirs were constructed in Kyrgyzstan and Tajikistan to store water for agricultural irrigation in Uzbekistan, Kazakhstan and Turkmenistan during summer months. Hydropower generation was a secondary objective, as upstream republics could make use of the coal and gas resources of their energy-rich downstream neighbours.
This implicit resource-sharing system collapsed after the disintegration of the Soviet Union. With import prices for fossil fuels rising, Kyrgyzstan and Tajikistan started producing their own energy in the form of hydropower. This resulted in a change of water releases, often prioritizing hydropower production for heating in winter rather than downstream irrigation in summer. The resulting tensions have had strong negative impacts on the region.
The limited water cooperation of the past decades entails significant, direct and indirect risks and costs. Costs directly related to water management primarily include losses in agricultural production due to inadequate seasonal availability of water for irrigation, losses and damages from winter floods, and the costs of new, regionally ‘redundant’ infrastructure.
These direct economic costs are accompanied by significant social and environmental costs, such as impacts on livelihoods and ecosystems. In addition, insufficient water cooperation adversely affects other sectors, resulting in significant costs often surpassing those directly related to water management. In Central Asia, this has notably led to inefficient trade in energy, constrained countries’ access to international finance, and created political frictions that limit all countries’ abilities to shape their region to mutual advantage.
How much, then, does non-cooperation cost Central Asia? Drawing on three previous studies that calculated monetary values of proxies for three cost categories – agricultural losses, inefficient electricity trade and lack of access to finance – the report estimates that insufficient cooperation costs up to more than 4.5 billion US$ annually.
Though significant, this systematically undervalues the true cost, as it ignores many sectors and interaction effects between them. A global level study by the World Bank from 2016 estimated the difference between good and bad water governance to add up to more than 20% of GDP for Central Asia by 2050, which would translate into more than 60 billion US$ annually.
The current costs of insufficient cooperation are already significant, and the risks for the future substantial as demographic growth, infrastructure deterioration, and climate change will likely significantly increase pressures. “Business as usual” would thus be dangerous. The report therefore maps out three alternative scenarios to show how cooperation at different levels could significantly reduce costs and positively transform regional relations:
In seeking to strengthen water cooperation, Central Asian governments can build on numerous existing cooperation frameworks. The intensified political dialogue between Central Asian countries in the past year has created new opportunities and a promising environment for reinforced cooperation.
The report provides some suggestions for policy makers to harness the benefits of cooperation. Regional governments and outside actors seeking to strengthen cooperation should start by focusing on less contested issues that benefit all actors, e.g. on topics like dam safety or improved irrigation efficiency. They should furthermore consider complementing existing regional approaches for cooperation through bi-/trilateral technical and political cooperation below the regional level. To increase chances of success, actors should simultaneously pursue different water-related topics (irrigation, energy, flood control) at different scales (local, national, sub-regional) and administrative levels to leverage water cooperation. Whilst pursuing such a poly-centric approach, it is however important to ensure compatibility and consistency with regional level cooperation efforts. This also implies an important role for international actors, as they will be required to think carefully about the incentives they set and communicate when supporting sub-regional activities.