Water is not free: Kyrgyzstan is urged to monetize its water resources
The downstream countries of Central Asia, such as Kazakhstan and Uzbekistan, perceive water as a commodity and service for their domestic consumers, but as soon as it comes to transboundary rivers, the resource is considered by them as a free “God’s gift”. This double standard was pointed out by Professor, Doctor of Economics Guras Japarov, stating at a conference in Bishkek about the need to introduce market mechanisms and fees for services to regulate runoff. According to him, in order to ensure a rational distribution of resources and overcome their deficit, it is necessary to switch to a system of sold water use rights, where the price is formed taking into account demand, cost and transaction costs.
The expert noted that international experience demonstrates different approaches to the pricing of water resources. In world practice, water is often recognized as a natural resource with a value that includes compensation for the costs of hydraulic structures, shore protection works and ecosystem services. Japarov cited the opinion of Chinese expert Liu Qing, who believes that a water market is needed for effective water use. However, in Central Asia, the situation is complicated by the lack of a regional electricity market and disagreements between countries. Some examples of cross-border interaction are successful, but others remain at the stage of debate or unresolved conflicts.
The economist paid special attention to the work of the Toktogul reservoir. Currently, it operates in an energy mode: accumulation occurs during the growing season, and the main discharge of water is in the autumn—winter to generate electricity. This creates a conflict of interest, since irrigation to neighboring countries is necessary in the summer. The situation is aggravated by climate change, low-water cycles and an annual increase in energy consumption. Since 2014, in order to prevent the water level from dropping to a critical level, Kyrgyzstan has transformed from an exporter to a net importer of electricity.
To solve the problem, Japarov proposed specific economic calculations. Taking into account the market price of electricity in the region of about $ 0.05 per kWh, the volume of regulation of runoff during the growing season can be estimated at $ 32.5 million. Such compensation would make it possible to preserve the water resources of the Toktogul reservoir through the import of electricity. The professor also mentioned the idea of introducing the term “interstate water reserve”, for which the owner of the reservoir should receive a fee.
The speaker stressed the importance of separation of concepts: countries regulating the flow, transit countries and consumer countries. Economic analysis shows the need for joint solutions to problems, including reimbursement of infrastructure maintenance costs and consideration of man-made and natural risks. Kyrgyzstan needs to calculate the real costs of restoring and creating hydraulic communications and determine the degree of financial participation of neighboring states. According to the expert, the architecture of water and energy cooperation should be based on a benevolent policy, but with the application of strict economic principles and tariff policy based on demand in the energy market.
Professor Japarov’s statements were made during the conference “Water, mountains and glaciers of the Kyrgyz Republic. Sustainable Future”, which took place in Bishkek. The organizers of the discussion platform were KNU named after Zh. Balasagyn, OF Green Energy, CEI “Oi Ordo” and OJL “Green Alliance of Kyrgyzstan”.
Alexander Eskendirov (Rivers.Help!)
Original (in Russian): Вода не бесплатна: Кыргызстан призывают монетизировать свои водные ресурсы
