A Dam-Building Race in Asia: How to Contain the Geopolitical Risks

Brahma Chellaney

A paper published by The Transatlantic Academy, Washington, DC, May 2012


Asia’s phenomenal economic rise has attracted a lot of attention in international policy circles but the sharpening water competition this growth has triggered is less well known. Water has emerged as a source of increasing competition and underlying discord between many Asian nations, spurring new tensions over the resources of transnational rivers. Asia’s fastest-growing economies are all at or near water-stressed conditions, underscoring how water shortages threaten to hamper the continent’s continued rapid economic growth. For investors, the Asian water crisis carries risks that are at least as potentially damaging as nonperforming loans, real estate bubbles, and political corruption.

Dam building on transnational rivers is at the heart of the inter-riparian tensions in Asia. Asia is already the world’s most dam-dotted continent: It has more dams than the rest of the world combined. Yet the numerous new dam projects in Asia show that the damming of rivers is still an important priority for policymakers. In the West, dam building has largely petered out. In Asia, however, the construction of new dams continues in full swing.

Like arms racing, “dam racing” has emerged as a geopolitical concern in Asia, where the world’s fastest economic growth is being accompanied by the world’s fastest increase in military spending and the world’s fiercest competition for natural resources, especially water and energy. As riparian neighbors compete to appropriate resources of shared rivers by building dams, reservoirs, barrages, irrigation networks, and other structures, the relationships between upstream and downstream states are often characterized by mutual distrust and discord.

This paper warns that just as the scramble for energy resources has defined Asian geopolitics since the 1990s, the struggle for water is now likely to define many inter-country relationships. At a time when many territorial disputes and separatist struggles in Asia are being driven by resource issues — extending from the energy-rich South and East China Seas to the water-rich Tibet and Kashmir — water indeed is becoming the new oil. But unlike oil — dependence on which can be reduced by either tapping other sources of energy or switching to other means of generating electricity — there is no substitute for water. Asian economies are the world’s leading importers of resources like mineral ores, hydrocarbons, and timber, importing them from distant lands. But they have no such import choice on water.

The paper, drawing on the author’s book on Asian water challenges published last fall by the Georgetown University Press, examines how the rising geopolitical risks arising from the dam-building competition can be stemmed. It does so by examining the broader water tensions and competition, which center on four distinct zones: China and its neighbors; South Asia; Southeast Asia; and Central Asia, where the Soviet Union’s disintegration left a still-festering water discord among the five so-called “stans” — Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan.

The overexploitation of river resources has only promoted unbridled groundwater extraction, resulting in rapidly falling water tables across much of Asia. The scope of this paper, however, is limited to analyzing how the resources of shared rivers have become the target of rival appropriation plans, in what can be described as a silent hydrological warfare. Driving the rival dam-building plans and the accompanying water nationalism is the notion that sharing waters is a zero-sum game. The danger that the current or new riparian disputes may escalate to conflict looms large on the Asian horizon, with important implications for Asia’s continued rapid economic-growth story and for inter-riparian relations.

Different continents’ water resources

The challenges posed by the frenetic dam building, however, come with new opportunities to break with business as usual and adopt water conservation and efficiency as well as cooperative approaches in order to help sustainably manage shared water resources and underpin mutual development goals and environmental security. What Asia  needs is institutionalized water cooperation between co-riparian states, with clear rules on building dams on transnational rivers, so as to minimize apprehensions and promote greater regional cooperation.

Only cooperative water institutional mechanisms can help mitigate the risks arising from the rush to dam rivers and create an upstream hydroengineering infrastructure that could potentially arm upstream states with tremendous political and economic leverage over downriver nations. Such cooperation will need to be based on transparency, information sharing, independent environmental impact assessment, dispute-settlement mechanisms, water pollution control, and a mutual commitment to refrain from undertaking projects that could materially diminish transboundary river flows.

Download the full paper here.