Why World Bank and the U.S Were Interested in the Indus Waters Treaty?

Introduction

The involvement of the World Bank and the United States in the Indus Waters Treaty was motivated by humanitarian, geopolitical and economic factors. While dealing with the dispute, the US wanted to avoid dangerous confrontation and ensure stability in the region. However, there were also economic reasons why Washington was interested in resolving the dispute.

Meanwhile, the World Bank and the U.S had different motives in addressing the issue. The World Bank acted as an honest broker, but the US had its geopolitical and economic interests in South Asia.

1. Why the World Bank Cared

A. Prevent an Economic Disaster

Right after the independence of Pakistan and India in 1947, the Indus basin water system was divided between the countries. Pakistan was entirely dependent on the river system for its economy. Most of the agricultural sector was dependent on canal irrigation.

According to the World Bank, at the time, Pakistan’s economy was highly reliant on agricultural produce and export of its surplus. Besides, many people were dependent on the canal system as their source of livelihood. In addition, most of the country’s exports consisted of agricultural products for instance cotton. Therefore, the World Bank wanted to prevent any sort of disruption to irrigation in Pakistan.

B. Avoid Projects Setbacks

In addition to the economic disaster that would have ensued if the dispute was not resolved, the World Bank wanted to help Pakistan and India avoid any setbacks to development projects. At the time, both countries needed a lot of investment in hydropower and other sectors. However, any investment scheme would require a long-term agreement on water sharing. Moreover, the project would require huge sums of money that the banks would be hesitant to lend if there was no agreement on the water use. In addition, Pakistan would require huge amounts of foreign capital to fund the building of new dams to replace those on the eastern rivers.

C. Pay for Projects

Instead of the World Bank funding the dispute resolution, a more practical engineering approach was adopted to solve the problem. The bank proposed to allocate the waters of the Eastern rivers to India and those of the western rivers to Pakistan. Consequently, funding the construction of the new dam in Pakistan and the link canals and barrage in India would be easier. In addition, the creation of the fund helped provide a forum where donor agencies could make contributions to the development fund and the projects in Pakistan’s Indus basin would be completed. Some of the projects that benefited from this fund include the Mangla dam, link canals, and barrage.

2. Why the US cared

A. Cold War

Since the dispute occurred during the cold war period, the involvement of the US in settling the disagreement between Pakistan and India was mainly based on strategic needs. The US did not want to lose Pakistan as an ally since it had joined the security alliances that placed it under the US sphere of influence. At the time, Pakistan had joined the SEATO and CENTO, as a result, it had become a strategic ally of the US in the region and the world. In addition, the US wanted to prevent another Korea-like scenario from emerging. In addition, the dispute resulted from a serious misunderstanding between Pakistan and India and this could cause a larger conflict that would hinder efforts to develop the region.

B. Stability

The American leadership feared that the dispute would cause regional tensions, trigger an armed conflict and affect the economies of Pakistan and India. The instability that would arise from these conflicts would create the conditions for soviets to take advantage of the situation and intervene. As a result, the US wanted to de-escalate the situation and prevent further tensions from erupting in order to ensure stability and regional integrity. Besides, the US wanted to promote economic development in order to help prevent instability in the region.

C. Food Security

The US also wanted to support Pakistan’s food security as that of its economy was undeniably tied to the canal system. In addition, the country’s exports were undeniably dependent on the canal system. According to the World Bank, if the water diversion continued, it would cause food shortages in Pakistan which, in turn, would lead to political instability in the region.

D. Peaceful International Diplomacy

The US also wanted to show the world that despite differences, disputes between countries could be resolved peacefully through diplomacy and international agreements. Consequently, the Indus Waters Treaty became a model for development and peaceful coexistence around the world.

3. Who else cared?

Several countries donated to the Indus Basin Development Fund. The countries that made donations to the fund included the USA, UK, Canada, Australia, New Zealand, and West Germany. These nations were willing to help fund the project for various reasons, some of the reasons include promoting economic development, and regional stability besides preventing humanitarian crises that may have resulted if the water dispute was not resolved quickly.

4. Was the World Bank Biased?

This is a very controversial issue that has been subjected to research. Supporters of this claim argue that the World Bank pushed for the resolution of the dispute between Pakistan and India for its own motives for about a decade before the agreement was reached. The bank was in a position to fund billions of dollars in replacements for the Pakistani system. It was also able to set the rules for water use that have persisted to date. On the other hand, critics of this argument assert that the bank ignored the basin management approach and chose a more engineering approach by splitting the rivers into western and eastern streams in Pakistan and India respectively. This way, the World Bank failed to take care of some of the riparian ecological needs that were vital to the dispute resolution.

5. Was the US helping India or Pakistan?

Most historians have argued that the US was not helping one nation over the other but instead it wanted to ensure stability in the region. The resolution of the dispute benefited Pakistan because it got sufficient water from the western rivers. Moreover, it got long-term international support to fund the projects that would help it adapt to the new situation. On the other hand, India also benefited from the agreement as it had access to the eastern rivers. The agreement also opened the doors for international donors to fund Pakistan’s water-related projects thus reducing any chances for renewed confrontations. Although Pakistan and India made concessions, they both gained from the deal.

6. What strategic advantage did the World Bank gain by being involved in the dispute resolution?

By helping facilitate the resolution of the dispute, the World Bank was able to prove that it could do more than just make loans to countries. For instance, it showed the world the bank’s ability to engage in international diplomacy, fund long-term development projects, and promote sustainable development through the resolution of international disputes. As a result, the bank enhanced the reputation as a development institution.

Conclusion

The involvement of the World Bank and the US in the Indus Waters Treaty was based on different but intertwined factors. While the World Bank wanted to help prevent disruptions to Pakistan’s canal system, as well as fund projects that would facilitate the transition, The US wanted to ensure that there were no confrontations in the region that may have jeopardized its cold war plans. As a result, the US and the World Bank helped fund projects that would enable Pakistan to adjust its irrigation system, and in return, the US got a strategic ally that could help promote regional stability.