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.
Transforming regional relations
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:
- Strengthened technical cooperation, including cooperation on dam safety or joint early warning systems, could reduce social, environmental and political risks and costs caused by seasonal water scarcity and floods.
- Reinforced sub-regional political cooperation could complement technical cooperation with bi-, tri- or quadrilateral agreements that govern the management of specific infrastructure (such as particular dams) and coordinate water use in sub-basins.
- Reinforced regional cooperation would build on the two previous scenarios, culminating in an institutional and legal framework for the joint management of basin resources. Although such an overarching framework would be difficult to negotiate and implement, it offers the greatest potential benefits and economies of scale and scope.
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.