|Hydropolitics along the Jordan River. Scarce Water and Its Impact on the Arab-Israeli Conflict (UNU, 1995, 272 pages)|
|3. Towards an interdisciplinary approach to water basin analysis and the resolution of international water disputes|
|3.3. Paradigms for analysis of international water conflicts|
Economics, with the individual as a rational maximizer of satisfaction in a world of relative scarcity, offers a useful paradigm for water conflict analysis. When deciding between several possible water development options, for example, the benefit-cost analysis - an economic tool by which all of the future benefits and costs of a project are reduced to a single amount representing the net benefits in current monetary units - can help one to determine which project would be the most beneficial.
Economic theory also provides guidelines for policy options for efficient water distribution. Economic theory argues, for example, that only when the price paid for a commodity is a reasonable reflection of the true cost, can market forces work for efficient distribution of the commodity. In the Middle East, as elsewhere, the cost of water to the user is highly subsidized, especially water earmarked for agriculture. The true cost of water would reflect all of the resource development, pumping, treatment, and delivery costs of that water, most of which are not passed on to the user. In Israel alone, 20 per cent of the country's energy is used solely to move water from one place to another (Naff and Matson 1984, 12).
Subsidized water, it is argued, leads to waste in agricultural practices, to too little incentive for research and development of conservation techniques and practice, and finally, to too much water being allocated to the agricultural sector as opposed to industry. Take away subsidies and allow the price to rise, and market incentives are created for both greater efficiency on the farm and a natural shift of water resources from the agricultural sector to industry, where contribution to gross natural product per unit of water is often much higher. Since, in each of the areas discussed, between 75 and 95 per cent of water use is allocated for agriculture, the savings in water could be substantial (Wishart 1990). Thomas Naff has recommended such a shift of between 35 and 40 per cent of agricultural water in both Israel and Jordan (lecture, University of Wisconsin-Madison, March 1990).
If the price of water reflects the true costs of its development, and if property rights to water are clear, then a "water market" can be established to allow buying and selling, ensuring, through the "invisible hand" of the market-place, that each unit of water is being used most efficiently. Water markets, whether national or international, can provide clear incentives for efficient use and guidelines for trades or transfers. Howe and Easter (1971) derived the necessary conditions for economically efficient interbasin water transfers in the United States, and Dinar and Wolf (1992) discussed international water markets using a hypothetical transfer from the Nile to the Jordan basin as a casestudy. Zeitouni et al. (1992) discussed trading water rights in an international context and Gonzalez and Rubio (1992) showed that the amount of water to be transferred between basins in a Spanish case could be reduced if economic factors were considered, as opposed to straight extrapolations of need.
Economic analysis may also create a framework for easing regional water tensions. According to Wishart (1990), "conflicts over water rights are easier to resolve if transaction costs of resolution are lower, and if opportunities exist for improving the efficiency of water use and discovery." In other words, if it is cheaper for people to cooperate and save water than it is to fight, they would rather cooperate.
Some other considerations that have been used in the past to enhance the potential for economic cooperation between players include the following:
There are, however, problems inherent to using economic theory as the tool for water conflict analysis - problems that can lead to weaknesses in the economic solutions prescribed. For one, water is not a pure economic good. Options to the consumer of most goods include migrating to where it is cheaper or abstaining from it altogether if the price is too high. Given small countries with contentious borders, migration to water sources is not a viable alternative, nor, for more obvious biological reasons, is abstaining. Presumably, however, the analysis is restricted to water for agriculture, where there is ample room for reducing demand before running into such limits.
Another problem with economic analysis is more serious because it has to do with a force much more fundamental than economic theory - that is, the emotions of a nation. As mentioned earlier, all of the countries in the area were built from the farm up, and the agriculturalist, whether the fellah or the kibbutznik, holds a special mystique on both sides of the Jordan. Both Arabic and Hebrew ideologies are rife with slogans of "making the desert bloom" and "nations rooted in their land." In this context, water invariably becomes the "life blood" of a nation. One result of this has been a certain leeway granted to agriculture in the area, both political, as noted previously, and economic.
One striking example of water "diseconomy" is the case of Israeli settlements on the Golan Heights. The 24, mostly agricultural, settlements of the Golan have a population of about 3,500. In 1980, approximately 80 per cent of the 50 MCM/yr used by these settlements was pumped up from Lake Kinneret - a height differential of 600 m (Davis et al. 1980, 27; Inbar and Maos 1984, 22). Each cubic metre of water weighs a metric ton. Were the settlers to include the costs of the energy required to lift that much water that high, their crops could not possibly be competitive in the market-place. But settlements on the Golan Heights are viewed as more than a source of agricultural production: as mentioned earlier, they are also outposts, the presence of which creates a kind of first line of defence against the Syrians, whom many Israelis view as the likely antagonist in an ensuing war.
This perceived connection between settlements and security holds true throughout the country. As Frey and Naff (1985) write,
Israeli agriculture is not merely an ordinary economic sector. It is linked to the crucial matter of settlements, and settlements are linked to defense and national security.
This, then, is what makes Golan cotton competitive in the eyes of the nation.
Overlooking this fundamental aspect of a "national water ethic" of any of the countries involved, can occasionally confound an economist, especially one from outside the region. Cal Burwell, once the Director of Research for the proposed Agro-lndustrial Complex, mentioned recently that "Some of what's valuable to the folks over there just doesn't fit into what our folks would call 'good economics"' (interview, February 1990).
The economist increasingly recognizes the sometimes overpowering noneconomic values that water users occasionally attribute to their water. These might include (from Wolf 1992a):
This last represents a departure from historic economic arguments in the Middle East. In Israel, for example, water has been subsidized for years as a means of promoting population dispersion and food security. These subsidies have dwindled somewhat in recent years, as the Ministry of Agriculture has accepted more of a market approach. Lately, however, as the population soars with natural growth and extensive immigration, the suggestion has been made to increase subsidies once again as a way to keep open space among the extensive developments (interview, Martin Sherman, November 1991).
Additional factors often convolute the possibility for a traditional economic analysis, particularly in an international setting. Some of these possible political and institutional constraints to economic cooperation are as follows:
Even while recognizing its limits, one can still use economic analy sis as a useful tool to provide some guidelines to increase hydrologic efficiency. It has been suggested that following these guidelines can be especially crucial, particularly as water limits begin to be reached:
Whereas diseconomies dictated by ideology could be tolerated under condi tions of conventional water sufficiency, they cannot continue indefinitely, especially with regard to investments under conditions of system's short age. (Galnoor 1987)