1. Economic dimension of water cooperation in South Asia: Nepali perspective
Perspective shared at the Conference on ‘Water governance and cooperation in South Asia’ at Gokarna Forest Resort, Kathmandu from October 2013
Bishnu Raj Upreti, PhD
Director
Nepal Centre for Contemporary Research (NCCR),
Kathmandu , Nepal
Website:
Tel ; (m)

2. Outline of the presentation
Setting the context
Framework for economic cooperation in South Asian water resources
Mechanisms for regional economic cooperation
Nepali perspective on economic cooperation over water resources
Conclusion
I have different perspective on economic cooperation than the water resource economist and focusing to regional context.
Merely economy focused water cooperation does not work in South Asia (market alone is not the determinant of economic cooperation in water resoeuces)

3. 1. Setting the context
Objective: Contribute to ongoing debate on economic cooperation over water resources in South Asia
Addressing global and regional changes requires moving beyond existing attitude, behaviour and action by SA actors (internalizing regionalism)
Expand, refine and implement Gujaral Doctrine
a) India (any SA country) does not ask for reciprocity from neighbours;
b) SA countries don’t allow territory to use against the interest of another country;
c) None will interfere in the internal affairs of another;
d) SA countries must respect each other’s territorial integrity and sovereignty and
e) Settle all their disputes through peaceful bilateral negotiations.
Holistic approach for addressing new challenges:
Environmental cooperation
Economic cooperation
Political cooperation
Civil society cooperation
Research and technological advancement

4. 2. Mutuality framework for economic cooperation on South Asian water resources

5. 2. Mutuality framework…2 Mutual interests
Harnessing available South Asian water
Achieving stability, peace and harmony
Mutual benefits
Addressing power crisis (interdependency)
Promoting trade/economic growth
Mutual trusts
South Asian integration
Gujaral doctrine
Mutual risks
Effects of global change process (CC, demographic change, migration, etc)
Conflict, terrorism and instability from poverty, inequality, injustice

6. 3. Mechanism for regional economic cooperation
Investment friendly policies (e.g., SAFTA, Electric Power Trade Agreement, trade facilitation, etc.)
Regional structures (e.g., regional power exchange and power transmission lines/grids, Bilateral and Multilateral Investment Promotion and Protection Agreements , Regional Power Exchange Committees, etc.)
Conflict management mechanisms and negotiation capacity
Promotion of public-private partnership (joint ventures, regional investment projects, FDI, etc.),
Harmonising regulatory mechanisms (e.g., Inter-governmental committees to promote trade and facilitate transit)
Joint academic study and research at regional level technological and data-base advancement s
Developing mechanisms for broader consultation and participation and ownership (through costs and benefit sharing),
But market force alone can not determine economic cooperation on water  Equitable regional water governance and integrated water management and change in the existing mindsets are needed
UN Water publication 2013 entitled ‘Water cooperation in action: Approaches tools and process’ has identified 7 tools: 1) Legal frameworks, 2) institutional arrangements, 3) Sharing information and conducting joint assessments, 4) Incentives for cooperation, 5) mediation and dispute resolution mechanisms, 6) costs and benefits sharing, and 7) Financing (P.10).

7. 4. Nepali perspective
1. Regional collaboration and concerted actions are essential to promote economic cooperation in utilizing South Asian eater resource
2. Single country alone can not promote economic cooperation in exploiting the potential of south Asian water, despite power and resources
3. Changing role of India and other countries is needed in promoting economic cooperation on developing hydro-power in the regions and for addressing India’s energy crisis [one the largest energy consumers (rank 6th ?) and water is still important source (+ coal, petroleum, thermal, nuclear + + ), high energy demand (annual growth rate of almost 4%, with shortages of around 10% during ‘peak hours’),
4. Nepal’s power crisis (10-16 hours power cut /day in stressed session) forced for seeking international investments in hydro-power development (often said that out of 42,000 MW economically feasible of hydropower only around 3 % is exploited and 97% to do yet). Openness,
5. Mistrust among South Asian countries (e.g., 1950’s Peace and Friendship Treaty between Nepal and India is always being source of mistrust, Indo-Pac tension, Indo-Bangladesh border tension, etc)  need more work to promote economic cooperation
6. All SA countries need to move beyond security concerns and collectively work for economic cooperation (technological, investments, trade facilitation of both goods and services, cultural integration and civil society cooperation)

8. 5. Conclusion
Promotion of economic cooperation on water resources in South Asia requires change in the present mindset: flexibility and openness to create enabling environment
Concerted efforts from political decision makers, government policy makers, professionals and civil society are essential to address the challenges associated with water resources in South Asia (e.g., transboundary conflicts, non-cooperation, mistrust, suspension and inaction, power crisis, etc.)
Regional framework for action: effective water sector governance and increase financial investment, research and innovation
However, mutuality framework, regional structures and mechanisms discussed earlier will provide firm basis for regional economic collaboration in governing water researches
Political decision and policy makers need to be flexible for benefit sharing (expanding the pie) and moving beyond economic motives
Gujaral doctrine if internalised and applied by the South Asian rulers could address many challenges face by South Asia
Research: water processing, recycling, efficient use, best management, cost saving use etc
Financial investment: Huge amount of capital investment in infrastructures in water resource management

9. Thank you