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WATER POLITICS

Via the Silk Road Intelligencer, an interesting article on water in Kazakhstan:

Kazakhstan is not the first country that comes to mind when discussing water politics. In Central Asia, this topic is more often associated with Uzbekistan, which uses more water annually than it has, and Kyrgyzstan and Tajikistan, which are both located upstream from Uzbekistan and are looking to dam the rivers that feed (or quench) Uzbekistan.

But Kazakhstan is becoming more familiar with this issue. Xinjiang, a Chinese province bordering Kazakhstan and benefiting from China’s so-called “Go West” policy, is using more and more water for agricultural, industrial and extraction purposes.

This affects Kazakhstan since two major rivers, the Irtysh and the Ili, originate in Xinjiang and meander across the Kazakh steppe into Russia. Kazakh, Russian, and Chinese scientists have noted these water issues with varying levels of concern. Kazakhs and Russians fear a repeat of the Aral Sea disaster, where agriculture projects siphoned off too much water and the sea slowly died. Chinese officials simply note that care should be taken in the future.

Clearly, a lack of water or changing environmental conditions will affect business conditions in Kazakhstan but, that said, it should affect the planning process rather than eliminate entry into a market entirely.

Investigating water-use issues must comprise part of the due diligence of any investment scheme in Kazakhstan.

Knowledge of future water supplies should influence the strategic decision-making process in the following ways — length of lease, area of investment and the viability of project.

Depending on the location, time, and demands of the business, this could lead to unique opportunities, especially corporate social responsibility projects which have a lasting impact on the local population and could help cement the reputation and position of you and your company.

Water can threaten your business in Kazakhstan, but it can also guide you in unexpected ways.