Creating a region of cooperation

THE Asian Infrastructure and Investment Bank (AIIB) will begin its operations in 2016. Its opening for business coincides with the launch of the Global High Level Panel on Water and Peace (Global HLP) by the governments of 15 countries from all continents. The AIIB has indicated that water, sanitation, hydro-power, agriculture and environment will be five of its 10 priority areas. These are precisely the sectors which will be addressed by the work of the Global HLP.

The government of Switzerland, which brought together the 15 countries, is also a subscriber to AIIB capital. Out of the 4.4 billion people in Asia whom AIIB aims to serve, about a third or 1.5 billion people live in shared river basins. Where waters are shared between neighbours, incremental capital output ratio for water, agriculture, hydro-power and related sectors - which is currently at 2.5 globally - can decline to 2 if there is collaborative management instead of conflict. This can considerably improve the returns on capital. Cooperation can reduce cost overruns by avoiding disputes and judicial processes. Therefor…