Russia and Central Asian Water by John C.K. Daly - Assignment Example

Russia and Central Asian Water: Scar BY YOU YOUR SCHOOL INFO HERE HERE Russia and Central Asian Water: Scar “Russia and Central Asian Water” by John C.K. Daly is an article that describes the scarcity of water in Asia. Before highlighting the article contents and premise, it is necessary to understand the definition of scarcity and how it impacts macro-level decision-making. Scarcity is defined as a shortage of a desired product, not enough of the product to satisfy everyone who demands it. When the good has a zero price tag, “the demand for the good is still greater than the amount that is available and demanded” (Boyes & Melvin, 2005, p.6). Water, in some regions of the world, is in such short supply that the demand continuously outweighs the ability to provide it. This is referred to as an economic good. Water is a valuable commodity at any price given since it is used for inputs of production in electricity generation and as a catalyst for other power sources. Water also is a necessity to the basic physiological security of human beings and animals, therefore it will always have high demand. In certain regions, where water is scarce, demand is so high that society or government could not hope to meet the supply needs of those who require it. Water is just about the only natural resource that does not fit the law of demand since increases in price does not limit demand for this good. The law of demand states that as a price of a good increases, demand falls. In opposite accord, when a price decreases, demand tends to rise (Boyes & Melvin). In certain regions of the country where water is scarce, higher prices refute the demand curve and demand remains constant or continues to increase. With this in definition in mind and the macro-level concerns about water and its importance related to demand and supply, the article “Russia and Central Asian Water” can be focused on as a form of support to the importance of water as a scarce resource in certain Asian regions. Since the collapse of the Soviet Union 19 years ago, newly-formed countries such as Tajikistan and Kyrgyzstan have been attempting to develop their economic strength and independent infrastructure systems. However, through this collapse and restructuring of these nations, areas that contain the most fresh water are no longer controlled by the Soviet Union and instead have become controlled resources by countries such as Kazakhstan and Turkmenistan (Daly, 2009). The “Stan” countries once part of Russia now use these water sources, though still scarce, in hydroelectric power plans and as an agricultural commodity. Glacial runoff near Tajikistan and Kyrgyzstan has provided groundwater reserves that can be used to help the local economy and infrastructure development. The placement of these freshwater reserves has alarmed the Soviet Union, calling for Russian President Dmitry Medvedev to address these nations about hoarding water reserves from the rest of Asia. The President stated, “Hydropower stations in Central Asia should meet the interests of all neighbouring countries and should correspond to international rights’ norms of transboundary rivers’ usage” (Daly, p.1). Because hydroelectric power plants consume a significant amount of water, use of these reserves by the “Stan” countries jeopardizes resource allocation in downstream nations that rely on these freshwater reserves. Medvedev’s comments received much support from neighbouring Asian nations who felt that their economic and human physiological needs were being jeopardized by collection of this scarce commodity. Russia believes that this particular scarce resource should be more equitable divided, seeking non-economic solutions, but those that are political in nature. However, this is not meeting with success which is raising even more tensions in this Asian region, with both sides pointing the proverbial finger at one another. Agrarian nations downstream from these reserves believe that there should be routine discharges of the water to ensure they can grow their crops successfully, which contributes to better exporting capabilities and growth in gross domestic product. However, Tajikistan and Kyrgyzstan have agreed only to release water during specific seasons, Winter and Autumn, as they have no other means to effectively generate electricity throughout the year (Daly). This is not satisfactory for the nations who are arguing with the “Stan” nations’ policies on water discharging and continue to seek diplomatic solutions. The problem in this case is that because water is so scarce and required for so many different industries, people in neighbouring nations believe they should not be charged for water usage. It remains an economic good that is constantly in hot debate. The problem with these developing nations that had recently been part of a stronger economy, Russia, is the cost of providing an economic solution to ensure all neighbouring states have access to this water. The cost of work associated with creating a method to ensure all nations have access to this freshwater exceed $5 billion USD, something that these smaller “Stan” nations cannot or will not contribute to. In the meantime, Russian economic security has been depleted by the loss of many of its previous territories, these “Stan” nations, and therefore cannot invest currently in creating a cascade system so that all nations can enjoy this scarce resource. Uzbekistan and others who support this particular country’s position believe that the freshwater reserves should be classified as transboundary rivers which make them open to international rules and regulations regarding its usage. However, this appears to be a weak argument that does not meet with appropriate resolution under diplomatic strategy. A scarce resource such as water which is needed desperately for human health reasons and food production seems to make individuals proverbially grasp at straws as a means to ensure their continued longevity, agricultural health and human survival. In an effort to try to deal with the issue and formulate some diplomatic or economic solution, five countries in the region created the Interstate Coordinating Water Commission in 1992 to try to create a solution that would best fit every country’s needs (Daly). However, after many meetings since its inception, hardly any regionally-based solution has been developed, thus allowing these disputes to continue. The main problem in this case is that no nation who is disputing the water’s usage maintains the economic resources, financially, to ensure that appropriate facilities are created to better allocate this scarce resource. The article reinforces the importance of a scarce resource especially when so many nations count on it for survival and economic growth. Many wars in history have been started due to hoarded natural resources when one power attempts to overcome another to gain access to it for personal objectives and national economic growth. There is a theory in economics referred to as rational self-interest, “the means by which people choose the options that give them the greatest amount of satisfaction” (Boyes & Melvin, p.7). It is rational self-interest for Russia and its neighbouring country advocates that they continue to pursue both diplomatic and economic solutions to ensure they gain access to these reserves. It is also creating a situation where these countries have many opportunity costs and tradeoffs while attempting to create a diplomatic solution. Russia is forced to abandon its own production and agricultural needs in this tradeoff in order to obtain some other means of sustaining their economy now that the “Stan” countries have developed their own independence and economic systems. This adds marginal costs to Russian and other nations’ activities while they seek alternatives to this scarce resource, something these countries cannot afford. What this has done is given Tajikistan and Kyrgyzstan considerable comparative advantage in water production, or the ability to produce a specific good or service with much lower opportunity costs than any other nation. Under ethical guidelines, a country with a comparative advantage in one product should continue to produce the good for others who have less capability to do so. It seems that the argument associated with this newfound comparative advantage is that Tajikistan and Kyrgyzstan are exploiting this comparative advantage in a method that goes far beyond simple rational self-interest. This article shows the importance of scarcity from the economics perspective and how an economic good that is in short supply can disrupt the economic health at the macroeconomic level. When marginal costs are incurred and opportunity costs are forced on a nation because of another’s lack of cooperation, it continues to erode long-run economic health and growth, leaving a country with an imbalance in areas of export-led growth and being forced to rely on import partners to deliver their water needs for agriculture and human sustainment. It will be interesting to witness whether the tangible needs for this water will lead to increased aggression, militarily, between these nations due to frustration over a lack of economic or diplomatic solution. In this case, it would likely be the “Stan” nations that are at a military disadvantage should this ever occur due to their lack of compliance for this scarce resource provision. References Boyes, W. & Melvin, M. 2005, Economics, 6th ed. Houghton Mifflin Company. Daly, John C.K. 2009 [internet] Analysis: Russia and Central Asian Water. [accessed October 23, 2011 at http://water-is-life.blogspot.com/2009/02/russia-and-central-asian-water.html] Analysis: Russia and Central Asian water by John C.K. Daly Washington (UPI) Jan 30, 2009 An integral element of the new Eurasian "great game" between Russia and the United States is a tussle for control of the Caspians hydrocarbon riches and those of former Soviet republics farther east. But Russia is making a diplomatic play on another key resource -- water. Russian and foreign energy consortia remain largely focused on the regions rich oil and natural gas reserves. Within the "Stans" -- former Soviet republics Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan -- an added element in the matrix is water, used by Tajikistan and Kyrgyzstan largely to generate hydroelectric power, while the downstream states of Uzbekistan, Kazakhstan and Turkmenistan view it as a resource for supporting agriculture rather than an energy source. In the 17 years since the Soviet Union collapsed, the Central Asian nations emerging from the debris have yet to resolve the issue of an equitable distribution of the arid regions most precious resource. The most significant amounts of oil and gas are found in the westerly "Stans" of Kazakhstan and Turkmenistan; the regions aquatic reserves are largely under the control of the most easterly (and poor) mountainous states, Tajikistan and Kyrgyzstan, which between them account for more than 85 percent of the regions groundwater reserves, primarily in the form of alpine glacial runoff that feeds the regions two largest rivers, the Syr Darya and Amu Darya. Earlier this week Russian President Dmitry Medvedev, during a state visit to Uzbekistan, weighed in on the issue, telling journalists: "The construction of hydropower stations in Central Asia should meet the interests of all neighboring countries and should correspond to international rights norms of transboundary rivers usage. It is impossible to act in isolation. It can cause tensions which can only be solved not by economic but by political means. ... "Hydroelectric power stations in the Central Asian region must be built with consideration of the interests of all neighboring states," he said, adding, "If there is no common accord of all parties, Russia will refrain from participation in such projects." Medvedevs comments delighted his hosts, who have argued that if Tajikistan proceeds with constructing its planned Rogun hydroelectric cascade, which would be Central Asias largest, it would severely impact the water needs of downstream states. Uzbek President Islam Karimov stated: "I would like to especially speak on one issue. Uzbekistan counts on Russias well thought-out and considered position on issues relating to the implementation of hydropower projects in the Central Asian region." Sayfullo Safarov, deputy director of Tajikistans Center for Strategic Studies, opined that Medvedevs statement "regarding the regions water question is most likely a diplomatic dodge of this problem," adding that while Moscow is interested in normal relations with all Central Asian nations, the water issue remains today the "most painful" unresolved issue in fostering the relations. Building Rogun is beyond Dushanbes capabilities; the government was forced to announce a tender for participation in the project, because the cost of the work was appraised at $5 billion to $6 billion. Medvedevs statements caused Tajikistan to deliver a diplomatic protest, fearing that Moscow was favoring Tashkents position over its own. There are, however, alternatives to gigantic Soviet-legacy projects like Rogun, first begun in 1976, such as smaller, more numerous hydroelectric facilities that would alleviate many of the downstream nations concerns and have been advocated by Western specialists with such institutions as the United Nations, the International Monetary Fund and the Asian Development Bank. The equitable division of these waters remains at the heart of the contentions, with the downstream agrarian states both seeking regular water discharges for irrigation while maintaining that water is not a resource for which they should be charged. In turn, Tajikistan and Kyrgyzstan maintain that if fiscal or energy assistance is not received to tide them over through the bitter winter months, they will release the water during the autumn and winter to generate electricity as they have no other power options, whatever the agrarian concerns of their downstream neighbors. It is not as if the Stans have not attempted to grapple with the issue. In 1992 the five countries established the Interstate Coordinating Water Commission to formulate a regional solution to the problem, but despite more than 50 meetings during the last 16 years, little of note has been accomplished, leaving each country to pursue its own interests or bilateral relations. The opposite negotiating positions are the Kyrgyz and Tajik insistence that water is as fungible and marketable as their neighbors hydrocarbons, while Uzbekistan is increasingly supporting the position that the Amu Darya and Syr Darya are in fact "transboundary" rivers, which accordingly makes them regional and international rather than bilateral issues. While there are more than 263 "transboundary" river basins worldwide, there are currently very few international agreements for integrated water management, and Tajikistan and Kyrgyzstan, both anxious to further develop their hydroelectric potential, are feeling unjustly pressured by their more prosperous downstream neighbors. What is lacking is money and vision -- Dushanbe recently admitted it could contribute only $150 million toward Roguns costs. If Russia and the United States can provide both funding and expertise for smaller, more environmentally friendly alternative power generating projects that meet indigenous power needs rather than remaining fixated on developing hydrocarbon reserves for export or massive Stalinist power complexes, the potential benefits would range from easing local tensions over water use to providing electricity for export to Afghanistan. While such projects would not be cheap, in the battle for Afghan hearts and minds, illumination and warmth may well prove more potent (and inexpensive) weaponry in battling the Taliban than any projected NATO troop surges. Read More