Harnessing Nepal’s water resources for economic growth.
BY Prof dr. Kamal Raj Dhungel
Nepal is blessed with abundant water resources which have the potential to be a reliable source of livelihood for its people if developed as an economic resource. There are around 6,000 rivers and rivulets in Nepal, originating from the Himalayan region or flowing down from Tibet, that have a perennial flow of water. In the past, water was primarily used for drinking, cleaning, irrigation, and grinding grains with the help of water mills. However, in recent times, the utilisation of water has expanded to include fisheries, swimming pools, and hydropower generation. This widespread variation in the use of water is worth considering. Despite being an essential commodity that nurtures the ecosystem and sustains life - without which living creatures on Earth would find it impossible to survive - the demand for water has increased, resulting in a short supply. As a result, water has become a highly sought-after commodity worldwide, and its variability in use for different purposes has also made it a scarce resource. It is, therefore, crucial to carefully manage and prioritise the utilisation of water resources in Nepal to ensure their sustainable development and availability for future generations.
Nepal possesses abundant water resources, but their potential is yet to be fully realised. Water can be utilised properly in two sectors: the primary sector, which includes drinking and cleaning functions, and the secondary sector, which encompasses fisheries, swimming pools, irrigation, and hydropower, among others. Efforts are needed for just, proper, and equitable development of these sectors to tap into the untapped water resources of Nepal. If scarce but untapped water resources are utilised rationally, it has the potential to transform the socio-economic structure of Nepal. It can help increase national income, leading to welfare and prosperity for the people.
Cleaning and drinking
The availability of adequate water for water and cleanliness is a prerequisite for having smart, active, and healthy human resources. However, urban centres, especially Kathmandu Valley, are facing a shortage of drinking water. Every household in the Kathmandu Valley is spending a significant portion of their income to meet their daily requirement of safe drinking water. These expenses are recurring over the years, as the water source is not regular and reliable. To address this issue, a forward-thinking policy for utilising untapped water resources could fulfil the water requirements of the people. The policy should focus on mobilising the recurring expenditures towards building a permanent provision of safe drinking water. If such policies are implemented, both public and private capital could be utilised to establish a reliable water supply system.
Introducing the concept of public-private partnership can play a crucial role in channelizing scarce resources towards the productive sector, such as the development of water resources. Adequate provision of water is essential for the development of healthy and smart human resources, which is a fundamental pillar of overall economic development.
The long-awaited Melamchi project can meet a significant portion of the water demand in the Kathmandu Valley, if not hampered by technical, political, and economic challenges.
Irrigation and fishery
Monsoon-based agriculture in Nepal has been facing challenges of low production and productivity, with declining trends indicating diminishing returns over the years. Despite being the major sector providing livelihood to over 66% of the population, agriculture is becoming unattractive due to these challenges. One potential solution to increase production and productivity in agriculture is the utilisation of untapped water resources from numerous rivers and rivulets for irrigation. The arrangement of irrigation facilities, along with the construction of ponds for fisheries, can be essential components in making the sector more attractive and sustainable.
The construction of canals and ponds for irrigation and fisheries can be made possible by mobilising both public and private resources. Public-private partnership could be a suitable model for harnessing water resources in this context. This model ensures the sustainability of irrigation projects and promotes the efficient use of water resources for agriculture, ultimately leading to increased production and productivity.
Smooth and reliable electricity supply is crucial for anticipated economic growth. The average annual growth rate of electricity consumption in Nepal has been found to exceed the growth rate of GDP, indicating that households tend to increase their electricity consumption despite their income status. However, Nepal suffered power outages for nearly three decades, disrupting social and economic activities and negatively impacting economic growth. The country is endowed with vast water resources, with approximately 240 cubic kilometres of renewable fresh water. Some of the biggest rivers in South Asia originate in Tibet, an autonomous region of China, and then flow into Nepal, India, and Bangladesh before reaching the Indian Ocean. This indicates that these rivers are shared by four sovereign countries and serve as a source of drinking water, irrigation, and electricity for the people of these nations. Nepal has limited alternatives to choose from in terms of utilising its water resources for its own development.
Water, as a free gift of nature, is the key resource upon which Nepal's future prosperity depends. Nepal’s topography is one of the best in the world for hydropower development. If properly tapped, Nepal's hydropower potential has the potential to benefit all stakeholders and allow for power sharing among neighbouring countries. However, there are no easy solutions for water utilisation in Nepal, as many of its rivers are shared by four sovereign countries.
Implementing a power-sharing model would be the best option for harnessing the hydroelectric potential of the Himalayan region. This would involve mobilising capital from all the benefiting countries to construct large hydropower projects, and ensuring that the resulting benefits are shared among multiple stakeholders with diverse interests. Benefit sharing could be the most effective policy option for mobilising regional capital and constructing large hydropower projects.
However, the development of water resources in Nepal has faced various challenges. Internal capital inadequacy to develop these sectors is a major constraint. Broken or stunted policies to harness this potential have depressed the overall development of the economy. Similarly, narrow patriotic feelings, vested interests of political parties or specific groups, and persistent political instability, among other factors, are major bottlenecks in harnessing the untapped water resources. Diplomatic failures to bring all stakeholders together for the development of water resources have also hindered progress. The slow development of this sector has had a paralysing effect on other interrelated development sectors, severely impacting the socio-economic progress of the people of Nepal.
(Prof Dr.Dhungel is an Economicist)