long-term challenges and short-term crises
March 17, 2009,
Johannes F Linn (Senior Fellow and Executive
Director of the Wolfensohn Center for Development at The Brookings Institution in the US, and a Special Adviser for
the Central Asia Regional Economic Cooperation Program (CAREC). He
previously served as Vice President for Europe and Central Asia at the World
pressing challenges elsewhere in the world, the international community must
pay close attention to water and energy developments in Central Asia, warns Johannes F
Linn. Long term development opportunities and short term threats need to be
addressed in order to avoid a compound crisis in which water and energy
scarcity play a huge role.
Asia  is an arid region. Its fertile
plains are former deserts made arable by vast irrigation systems. Most of the
water comes from the high mountain ranges of Kyrgyz Republic and Tajikistan
(and to a lesser extent from Afghanistan) channelled
downstream to Kazakhstan, Turkmenistan and Uzbekistan by the Amu Darya and Syr
Darya rivers. Over the last century Soviet engineers
harnessed these water resources with an extensive system of dams, reservoirs
and irrigation canals to support the rapidly growing populations of the
downstream countries and their agricultural production that in turn supported
the Soviet Union. The reservoirs also produce electricity, but local peak demand for
electricity is in the cold winter months, when water needs to be stored for
summer irrigation release. During Soviet days, downstream countries provided
the upstream countries with gas and coal in the winter to allow them to
generate heat and power without releasing water needed for the summer.
With the breakup
of the Soviet Union the elaborate water and energy sharing agreements among the Soviet Republics of Central Asia broke down, and
the previously integrated regional water and electricity infrastructure became
fragmented and suffered from lack of maintenance. With overuse and poor water
management agricultural yields fell, and the water levels of the Aral Sea dropped precipitously,
leaving behind a mere remnant of what was previously one of the largest inland
seas in the world.
As a result, the
provinces around the Aral Sea suffered great hardships and increases in poverty. While the
Central Asian republics of the Former Soviet Union have avoided military
conflict over scarce water resources, their relations have at times been
strained, especially between Tajikistan and Kyrgyz Republic on the one side and Uzbekistan on the other.
Over the last
two years two interrelated developments have aggravated this difficult
First, the two
poor upstream countries, Kyrgyz Republic and Tajikistan, have started to develop their hydro resources for export.
Downstream countries, and especially Uzbekistan, consider this a challenge to their water security. Secondly,
changes in precipitation and temperatures threaten the supply of water and
energy in the region. This has created – together with rising food insecurity
and the impact of the global economic crisis – the potential for a ‘compound
crisis’ in the region in 2009 that combines humanitarian, economic and
environmental threats especially for Kyrgyz Republic and Tajikistan.
Let us look in
turn at these two issues: the long-term opportunities and challenges of
unlocking the hydro resources of Central
Asia, and the short term threats of a
Long term hydro development opportunities
planned and built hundreds of dams to regulate the water flow in the Aral Sea river basin for
irrigation use and for generating electricity. Among them was Rogun dam in Tajikistan, planned for a height of 335m and
started in 1976, but never finished, since the break-up of the Soviet Union and
Tajikistan’s subsequent civil war brought construction to a halt in 1991 [See
In May 2008 the
country’s President, Emomali Rakhmon,
announced that construction had resumed . While initially drawing on the
country’s limited budgetary resources, the Tajik government hopes to attract
foreign financing for this project.
the dam will generate 3600MW of power. This is enough to supply much of Tajikistan’s electricity needs and to allow exports to Tajikistan’s neighbours, including to Afghanistan and Pakistan through a 1000MW transmission line, which has yet to be
While a preliminary
dam built in Soviet days was washed away by floods in 1993, there remains a
network of huge tunnels and caverns carved inside the mountains on both sides
of the river. These will house the eight turbines that will eventually generate
the power. While the completion of the dam is still expensive at a planned cost
of US$2.2B, the fact that a significant part of the work has already been
carried out strengthens the economic justification for pushing forward with the
The plan is to
complete the dam in stages over the coming 8-10 years, while filling the
reservoir could take up to 18 years, although power generation would start
earlier. The dam is to be built of rock and earth, which will allow it to
absorb potential seismic shocks better than a concrete structure, an important
consideration in this earthquake-prone region. While eager to involve others in
the financing, the government intends to retain control over the dam and its
energy output, a fact that may deter others from participating.
potential obstacle is that some downstream countries object. Uzbekistan has been especially concerned that the large storage requirements
of the new dam will endanger the essential supply of water to the millions of
Uzbeks dependent on the river’s uninterrupted flow during the summer months
when irrigation needs are highest.
Rogun is the largest of the dams
currently on the drawing board in Central
Asia. Others are under consideration,
among them the Kambarata 1 and 2 dams in neighbouring Kyrgyzstan with a joint capacity of 2260MW and an estimated cost of US$2B. The
total capacity of currently planned hydro investments in Kyrgyzstan and Tajikistan is 11,360MW at a total estimated cost of US$10.2B .
share similar characteristics. First, because of their high costs they cannot
be funded by national resources alone – Rogun’s cost
is about 85% of Tajikistan’s gross national income (GNI), Kambarata’s cost is 77% of Kyrgyzstan’s GNI. The two countries will have to attract public or private
investors from abroad if they are to proceed.
hydro dams will generate large quantities of electricity that can meet the
rising national energy needs of the countries at costs much lower than imported
energy and will help avert the energy shortages currently prevailing during the
winter months in Kyrgyz Republic and Tajikistan. Surplus power can be exported to neighboring countries, where
electricity is also in short supply and generation costs are at least three to
ten times higher.
demand for electricity in South Asia falls in the summer, which is also the time of greatest water
release for downstream irrigation needs. This makes power exports from Central Asia to Pakistan
and eventually to India particularly attractive. Major regional transmission lines are
under construction or being planned to allow power exports from Kyrgyzstan and Tajikistan.
climate change is threatening Central Asia’s long term economic and ecological
stability as global warming is melting glaciers in the region at an alarming
rate. In the last 50 years the waters stored in the glaciers of Central Asia are estimated to
have shrunk by 25% and they are projected to shrink by another 25% over the
next 20 years . These numbers are at best guesswork for now, but they do
reflect the broad trends that will likely see major changes in water flows of
the principal rivers in the region. Greater water shortages in the long term
will force Central Asian countries to use their available water much more
efficiently than has been the case so far, especially in irrigation . But
they will also make cooperative approaches to rational storage and allocation
of scarce water resources across the region much more important if peace and
prosperity in the region are to be preserved.
financing is to be attracted, detailed feasibility and environmental impact
studies still need to be conducted for the new dams to assure that benefits
outweigh costs, and that potential negative environmental and
social impacts can be adequately mitigated. In the case of Rogun, the World Bank has initiated such assessments in
preparation for possible funding . In view of the concerns of the downstream
countries, the rules of international water conventions need to be respected.
There are various ways of dealing with the allocation of transnational water
- a) Downstream countries could pay
upstream countries for the summer release of water stored in the winter.
This in effect was the practice during Soviet days, when downstream
republics provided upstream republics with free gas and coal to generate
electricity and heat during the winter months. After the dissolution of
the Soviet Union, upstream countries argued that water should be treated
as a commodity and paid for by downstream countries (at least in terms of
the cost of maintaining and running the dams and turbines), while
downstream countries rejected this notion on the grounds that water in
transnational rivers is a common good shared equally by all riparians.
- b) Downstream countries could
build dams and reservoirs on their territories to catch the waters
released by the upstream countries during the winters for summer use. Such
reservoirs have already been constructed (in Uzbekistan) and more are currently under construction (the huge Golden Century Lake in Turkmenistan) or planned (Kokserai reservoir in Kazakhstan) . The problem with these downstream reservoirs is that
they are an inefficient and partial response. Since they are located in flat
land rather than deep mountain valleys they are more expensive, provide
little or no hydroelectric capacity, and lose lots of water to evaporation
- c) A third option is to build dams
and reservoirs upstream along the same river or river system in sequence.
This allows the release of water from the higher reservoir for electricity
generation in winter, while catching and storing the water in the
subsequent reservoir for summer release. In the case of Rogun dam the downstream Nurek
reservoir could serve this purpose; for Kambarata
dam the downstream Toktogul reservoir is
options, the last one may well be the most feasible for the Central Asian
region, but it requires a level of trust among countries that is currently not
universally present. The practical question then is whether a mechanism can be
found to provide appropriate guarantees for the downstream countries that
create the minimum of trust to permit cooperation in this critical area.
various efforts are underway to try and find such a mechanism. This includes a
High-Level Group set up in 2006 by the Eurasian Economic Community (EurasEC – with Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as members) to develop a strategy for the efficient utilisation of water and energy resources in Central Asia. It has been
working on a strategy document but apparently has not yet reached agreement
The Central Asia
Regional Economic Cooperation Forum (CAREC – whose participants are Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan and Uzbekistan, as well as six multinational institutions, including the Asian
Development Bank and the World Bank) has also prepared an energy sector
strategy under which member countries agreed on the broad principles for the
development of the region’s hydroelectricity resources. The Shanghai
Cooperation Organisation (SCO – with China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as members) in its 2007 summit agreed to develop an ‘energy club’,
but so far little is known about its practical implementation and how it would
address the hydro power issues of Central
preparation of regional strategies and broad understandings are helpful for
creating a platform for dialogue and improved mutual understanding, the key
will be the pragmatic implementation of major specific river basin projects,
such as Rogun for the Amu Darya and Kambarata for the Syr Darya. A practical way to achieve this would be the creation of a
consortium of partners, including all directly affected countries, as well as
possibly one or more of the big neighbours (such as China or Russia),
the international financial organisations and private
financiers. The Government of Tajikistan has in fact invited Afghanistan, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan to join such a consortium. Kazakhstan has responded positively to this invitation .
would operate under a carefully crafted agreement that lays out the key water
and energy sharing arrangements, the financing and management responsibilities,
and the arbitration mechanism in case of unresolved disagreements.
International financial institutions could be asked to provide guarantees,
which in turn would be counter-guaranteed by the regional member governments.
Perhaps the best example of a successful internationally backed river basin
agreement with lasting success is the Indus Water Treaty which was signed in
1960 between India and Pakistan after years of arduous negotiations with the support of the World
In sum, there
are great potential benefits to Central Asia and its neighbours that argue for the
swift implementation of cooperative solutions for the development of Central Asia’s ‘blue gold’. The
principal responsibility for this rests with the countries of the region, but
the big neighbours and the international community
can do much to help create a supportive environment:
- Offering financial support for
appropriately structured regional consortiums.
- Funding neutral third-party
analyses of costs and benefits and of their distribution across countries.
- Creating opportunities for
constructive dialogue and trust building among the regional players.
- Stressing the shared long-term
interests of all concerned.
Of course, even
under the best of circumstances, the construction of new hydro capacity is a
long-term proposition. Measures to encourage more efficient utilisation
of available water resources and emergency steps to prepare for water and energy
crises when they threaten, as is the case right now, also need to be promoted
as a matter of high urgency.
A compound water-energy-food crisis
backdrop of the opportunities and challenges of long term hydro energy
development in Central Asia, a water and energy situation that is already difficult and tense
at best during years of normal weather can quickly deteriorate into a major
humanitarian, economic and political crisis for the region when climatic
conditions are adverse.
The years 2007-9
have been particularly problematic, since normal climatic cycles (probably
linked to the El Nino-La Nina phenomenon) appear to be intensifying and are
overlaid on the long term effects of global warming. The last major drought in
the region occurred in 2000-01. In 2007, a new drought period began with an
unusually hot and dry summer in much of Central
Asia, followed by an exceptionally cold
and dry winter.
The winter of
2007/8 had its most severe impact in Tajikistan, where parts of the country had
to do without electricity for weeks at a time, shutting down businesses and
schools, limiting hospital operations, and forcing families to live without
heat or light during the winter months when temperatures as low as -30°C were
not uncommon. Even the capital, Dushanbe, was severely affected by power cuts.
Tajikistan’s situation was aggravated by the fact that Uzbekistan, plagued by its own winter energy shortages, suspended gas exports
and limited transfer of electricity through its territory. At the same time,
the food situation in the country deteriorated, as farmers had to eat or sell
their seed stock, cattle ran short of feed, aquaculture suffered from frozen
ponds and streams, and food supplies from neighbouring
countries dwindled along with rising prices . Kazakhstan, the main grain exporter in the region, temporarily banned exports,
including to some of its neighbours, reinforcing the
damage done by the world food crisis beyond its borders.
The summer of
2008 was once again unusually dry in large parts of Kyrgyz Republic and Tajikistan, with the result that the major reservoirs of these two countries, Toktogul and Nurek, experienced
sustained levels much below normal. Like Tajikistan, Kyrgyzstan depends on electricity for the winter months. Going into the winter
2008/9, both countries had to ration electricity in large parts of each country
for months on end. Fortunately, so far this winter has been relatively mild, so
the humanitarian impact has been less severe, even though the economic and social
costs of the disruptions of power supply are once again significant.
international reaction to the unfolding water and related energy crisis in Central Asia involved emergency
assistance for Tajikistan in 2008. Among others, the US
provided nearly US$2.5M in emergency relief to Tajikistan in 2008 . The World Bank provided a US$6.5M emergency grant for
rehabilitation of key energy facilities and to assist with the development and
implementation of the Government’s Energy Emergency Mitigation Action Plan
. The World Bank also provided up to US$5M in grants for emergency
agricultural farm inputs and animal husbandry . The FAO carried out an
assessment of the food security situation as a basis for a coordinated response
by the international community. The UN organised
flash appeals for emergency assistance for both Kyrgyzstan and Tajikistan, with mixed success.
Concerned by the
indications of a severe crisis, the UNDP organised a
meeting of international organisations and bilateral donors
in July 2008 to share what information was available on the crisis situation.
The meeting concluded that an in-depth assessment was urgently needed and under
the leadership of the UNDP a report on the compound crisis was prepared and
released in January 2009 . It concluded that Kyrgyzstan and Tajikistan are indeed threatened by a combination of water and energy
shortage, high food prices and a looming recession resulting from the impact of
the global economic crisis. The report noted that:
- Kyrgyztan’s and Tajikistan’s key reservoirs, Toktogul
and Nurek, were respectively 20% and 9% below
normal at the end of 2008, with rigorous restrictions on winter water
releases essential if reaching ‘dead levels’ of these reservoirs (at which
electricity production ceases) are to be avoided.
- Kyrgyzstan and Tajikistan have
been hit by an ‘electric shock’ due to lack of power – the estimated
impact of the winter 2007/8 blackouts amounted to US$280M in Tajikistan,
or 7% of the country’s GDP; with the extended blackouts especially in the
provinces, but increasingly also in the capital cities, significant
economic losses are again expected during the current winter 2008/9.
- Both countries have large
population segments suffering from food insecurity, some 1.5M people in
the case of Tajikistan, as a result of high incidence of poverty and high local food
prices, even after international food prices receded from the
exceptionally high levels reached during the summer of 2008.
- Finally, with their heavy
dependency on minerals and cotton exports and on migrant workers’
remittances – in the case of Tajikistan remittances are estimated to have
reached 50% of GDP in 2008 – both countries are likely to see drastic
reductions in foreign currency earnings, budget revenues and household
incomes which will aggravate their already difficult economic and social
The impact of
this compound crisis is exacerbated by the tense relations between Tajikistan and Kyrgyzstan on the one hand, and Uzbekistan on the other. Despite an agreement at the CIS Summit in October
2008 among the presidents of the region which was to have facilitated the
provision of gas and electricity to Kyrgyzstan and Tajikistan in exchange for
prudent management of winter water releases, Uzbekistan blocked electricity
transmission over its territory from Turkmenistan to Tajikistan and also cut
off gas supplies to Tajikistan over an apparent disagreement on price. In
return, Tajikistan threatened to draw down more of its water resources during the
winter and curtail releases during the subsequent summer.
circumstances it is critical that the international community and the big neighbours collaborate in assisting the upstream countries
cope with the ecological, economic and social crisis that they now face. This
requires assistance in addressing the underlying issues that cause their
vulnerability to recurring droughts (limited power generation capacity,
inefficient water and energy use, weak institutions), and engagement in a high
level diplomatic dialogue to ensure the current tensions between upstream and
downstream neighbours do not lead to tit-for-tat
reactions that could turn into interstate conflict.
Honest brokers required
Asia lies at the hub of a rapidly
integrating Eurasian super-continent, surrounded by some of the biggest and
most dynamic economies on the globe. Its stability and prosperity is critical
not only for Central Asians but for all of Eurasia and the rest of the world.
Central Asia faces many opportunities and constraints. Among them the region’s
water and energy resources stand out because of the great potential that they
represent, but also because of the complexity of the challenges that they
present to each of the countries, to its neighbours
and to the rest of the world. It is essential that Central Asian countries
promptly address both the long term development opportunities and the short
term threats of the compound crisis in which water and energy scarcity plays a
huge role. But they cannot do it alone. They need the help of their neighbours as well as the help of the wider international
international organisations – the United Nations and
the multilateral development banks, including the World Bank – have a special
role to play, because of their technical and financial capacities and their
ability to act as honest brokers. Despite all the pressing challenges elsewhere
in the world, it is important that the international community pay close
attention to the developments in Central
Asia, especially the developments in the
water and energy domains.
 For the
purpose of this article Central Asia is defined to include Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. The population of the five countries combined is about 60 million.
For an overview of the regions economic, social and political conditions see
UNDP, Central Asia Human Development Report, New York, 2005
 Konstantin Parshin, ‘Tajikistan: government harbours hydropower dams, EurasiaNet, June 4 2008.
 See Eurasian
Development Bank, Water and Energy Resources in Central Asia, Industry Report, April 24 2008.
Development Bank, op. cit. See also John Magrath,
Glacier Melt, Oxfam Policy Paper January 2004
 See UNDP, Central Asia Human Development
Report, op. cit.
 For a good
summary of prior feasibility studies for Rogun see
International Water Power and Dam Construction (May 2008), Onwards and Upwards,
Volume 60, No 5, pp30-34.
 See UNDP, Central Asia Human Development
Report, New York, 2005. Kazakhstan announced in 2008 that it will proceed with the construction of Kokserai reservoir; see Joanna Lillis, Central Asia: Water Woes Stoke
Economic Worries, Eurasianet, 28 April 2008
Development Bank, op. cit.
 On February 3, 2009 Russia reportedly agreed to provide Kyrgyzstan $2 billion in financing for the construction of Kambarata;
Tajik-Russian negotiations about Russian financing for Rogun
broke down in 2007 since Tajikistan would not agree to give up control of this key national asset.
During a recent visit to Uzbekistan, Russian President Medvedev announced his
country’s support for the Uzbek position that no upstream development of
hydropower resources should proceed without full consultation and agreement of
the down-stream neighbours; see http://enews.ferghana.ru/article.php?id=2497.
 See Stimson, The Indus Water Treaty: A History, 2007 http://www.stimson.org/?SN=SA20020116301
Central Asia Regional Risk Assessment: Responding to Water, Energy, and Food
Insecurity, Regional Bureau for Europe and CIS, New York, January 2009