World Bank Response to Corruption Articles

Friday, June 2, 2006
Dear Peter,

Thank you (and Shannon) for your email and your article, which you also sent to other Bank colleagues who are on the International Rivers distribution lists (some of whom I am copying), and Mr. Wolfowitz. Since we last met, my role has shifted and I now divide my time as senior water advisor equally between Africa and South Asia.

I (and other colleagues as appropriate) would be happy to discuss your views on the water sector in Pakistan, and any suggestions that you may have for ways in which we could help Pakistan more effectively. There are multiple views within and outside Pakistan and we would like to promote inclusiveness and convergence of views.

Given the structure of Pakistan’s economy and its geography and aridity, it is our view that sound management of the Indus River and a well-performing irrigation sector are critical to growth and poverty alleviation and even to the very survival of Pakistan. As you would expect, I take issue with the overall message of your paper, which suggests that we are entirely focused on infrastructure and dams. Your paper raises a wide range of issues and advocates solutions that we have ourselves emphasized in our water assistance strategy, which presents a broad view of the challenges of water management and infrastructure development within the Indus Basin in a modernizing Pakistan. As you have drawn from our findings extensively, we have a great deal of common ground - I will highlight a few key areas.

We have long recognized that corruption is a serious issue, and we are providing strong support to Pakistan’s efforts to push aggressively two key, system-wide governance measures. First, devolution of irrigation management to farmer organizations - empowering users; this has been slow precisely because it is confronting many of the rents that are at the root of corruption, but it is being increasingly widely adopted and we believe that this is revolutionary reform. Second, provision of public information on water entitlements and real-time flows (now available on the internet for Punjab); this is at the core of adressing some of the most intractable issues related to transparency, trust and accountability. Other governance and institutional reforms are also essential and under active debate within Pakistan. Groundwater storage is the key to sustaining irrigation in many parts of the basin and "leaky" canals are fortuitous but important recharge structures in fresh groundwater areas; high returns could be derived from efficient conjunctive use of surface and groundwater storage. The "maintenance gap" is great and we give very high priority to asset management. We also highlight the "performance gap" and the major potential to improve on-farm productivity, combining better water management with better farming practices; closing this gap is essential. We are specifically addressing all of these issues in Pakistan, both in our projects as well as in our dialogue with federal and provincial authorities.

With regard to the "soft approaches" you advocate, we have long been active promoters of drip irrigation and there is clearly much potential in Pakistan to be realized. We engaged with Paul Polak and IDE in Bangladesh during the development phase of the treadle pump in the 1980s, and we have promoted its adoption for supplementary irrigation in many countries, where fresh groundwater levels are very shallow, farm plots very small and farmers very poor. Where there are similar conditions in Pakistan, the pump clearly has potential application.

On most of these issues we appear broadly to agree. However, where we seem to disagree is over the rehabilitation of major hydraulic infrastructure on which the whole system depends (e.g. Taunsa barrage, where rehabilitation is also designed to ensure much more reliable flows to poorer farmers at the tail end of the canal systems), and over the creation of additional storage capacity to provide replacement of lost storage, greater flexibility in Indus system regulation and major power benefits. The Indus River system needs major regulation infrastructure to manage and distribute water if lives and livelihoods are not to be subject to serious shocks and development and growth are to be sustained. However, infrastructure development must be linked to institutional development and reforms that increase productivity and reduce inefficiency, waste and corruption. In addition, high social and environmental standards must be maintained in the development and management of such infrastructure, and there are opportunities for creative solutions that minimize adverse effects, and thus inherent tradeoffs, and promote benefit sharing.

It has always been and remains our firm view that the full range of water development and management options (from small to large scale) need to be carefully considered by developing countries, as they have been by developed countries, in the search for sustainable solutions for their people. However, of course we do not have all the answers and we are interested to discuss your views, in the search for consensus as well as for innovative ideas that could lead to better, more affordable solutions, proven to be effective at national scale.

I would be delighted to organize a meeting in Washington or in Pakistan. Alternatively, some time ago I offered to come to Berkeley, if that would help to advance a constructive and practical dialogue. I could again explore that possibility, and I would also enjoy meeting with Patrick and Lori.

Best wishes,

David Grey
Senior Water Advisor