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How to Share waters of River Nile: Lessons from South America

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Interesting Proj Syndicate piece by Biniam Bedasso and Maria A. Gwynn. Ethiopia and Egypt have again failed to reach an agreement on the Grand Ethiopian Renaissance Dam on the Blue Nile, raising fears that the entire region may be plunged into conflict. But a similar dispute in South America in the 1970s shows how this outcome can be avoided. ….. In the 1970s, Brazil and Paraguay initiated a binational effort to construct a massive hydroelectric dam on the Paraná River, located on their shared border. The Itaipu Dam –completed in 1984 – today generates around 88% of Paraguay’s electricity and over 11% of Brazil’s supply, making it a world leader in renewable-energy production capacity. But the Itaipu Dam project faced considerable resistance from Argentina, a downstream country

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Interesting Proj Syndicate piece by Biniam Bedasso and Maria A. Gwynn.

Ethiopia and Egypt have again failed to reach an agreement on the Grand Ethiopian Renaissance Dam on the Blue Nile, raising fears that the entire region may be plunged into conflict. But a similar dispute in South America in the 1970s shows how this outcome can be avoided.

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In the 1970s, Brazil and Paraguay initiated a binational effort to construct a massive hydroelectric dam on the Paraná River, located on their shared border. The Itaipu Dam –completed in 1984 – today generates around 88% of Paraguay’s electricity and over 11% of Brazil’s supply, making it a world leader in renewable-energy production capacity.

But the Itaipu Dam project faced considerable resistance from Argentina, a downstream country that, like Egypt today, worried about its water supply. Owing to its objections, international financial institutions initially refused to finance the dam’s construction.

The problem was resolved with the conclusion of the Acuerdo Tripartito between Argentina, Brazil, and Paraguay, which all three signed in 1979. The agreement established acceptable changes in water levels, as well as environmental protections and water-quality standards. To monitor compliance, the agreement established a mechanism for the three countries to exchange information on hydrological conditions. Moreover, an institutional framework for cooperation and transboundary water management was created for the Paraná Basin.

The instruments and institutions established at the Itaipu Dam’s inception continue to support dispute resolution. Today, extreme drought has severely reduced the Paraná River’s water flow, reducing Argentina’s water supply and making it difficult in landlocked Paraguay to navigate the river, which is essential for its agricultural export industry.

While no independent arbitration body is in place to manage this crisis, the affected countries have negotiated an amicable solution, based on the 1970s treaties and international law. The binational council managing the Itaipu Dam agreed to release just enough water from the reservoir to ease the drought’s effects for downstream countries, without compromising energy production. 

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

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