Water sharing within the states/provinces of a country and cross-border is unavoidable. Conflicts between the sharing entities might turn more severe due to additional dependency on water, growing population, and reduced availability as a result of climate change at many locations. Pakistan, being an agricultural country, is severely water stressed and heading toward a worsening situation in the near future. Pakistan is heading toward water scarcity as water availability in the Indus basin is becoming critical. Being a downstream riparian of India and Afghanistan in the Indus basin, water availability depends on the releases of water from both countries. The Indus Water Treaty is governing the water distribution rights between India and Pakistan. However, there exists no proper agreement between Pakistan and Afghanistan and the construction of new dams on the Kabul River is another threat to water availability to Pakistan. Correct implementation of the Indus Water Treaty with India is required, together with an effective agreement with Afghanistan about the water sharing. In addition to water shortage, poor management of water resources, inequitable sharing of water, lack of a systematic approach, old-fashioned irrigation practices, and growing agricultural products with large water footprints are all exacerbating the problem. The water shortage is now increasingly countered by the use of groundwater. This sudden high extraction of groundwater is causing depletion of the groundwater table and groundwater quality issues. This water shortage is exacerbating the provincial conflicts over water, such as those between Punjab and Sindh provinces. At one end, a uniform nationwide water allocation policy is required. At the same time, modern irrigation techniques and low-water-footprint agricultural products should be promoted. A fair water-pricing mechanism of surface water and groundwater could be an effective measure, whereas a strict policy on groundwater usage is equally important. Political will and determination to address the water issues are required. The solutions must be based on transparency and equity, by using engineering approaches, combined with comprehensive social support. To develop a comprehensive water strategy, a dedicated technopolitical institute to strengthen the capabilities of nationwide expertise and address the issues on a regular basis is required to overcome the complex and multidimensional water-related problems of the country.

The Indus River System is a major source of life in Pakistan. A vast array of Pakistan's agricultural and domestic consumption needs are critically dependent on the Indus River System. The Indus River contributes towards 25% of the country's gross domestic product, providing water for almost 90% of the food production in Pakistan. Linked to the water security issues, Pakistan is potentially at risk of facing a severe food shortage in the near future. The World Bank report of 2020–2021 estimates that the water shortage will increase to 32% by 2025, which will result in a food shortage of almost 70 million tons. Water shortage could also result in confrontation between the provinces as river sharing has always been a source of problem for Pakistan. According to recent estimates, siltation and climate change will reduce the water storage capacity by 2025 to almost 30%. As for the per capita water storage capacity in Pakistan, it is about 150 m3, which is quite meagre in comparison with that in other countries. Irrigated agriculture will soon be adversely affected due to the reduced surface water supplies and the consequent increase in groundwater abstraction. To make matters worse, over the past decades, a great deal of distrust has developed among the provinces of Pakistan regarding the water distribution issue, and the successive federal governments have failed to formulate a cohesive inter-provincial National Water Policy. Along with the shortages and increasing demand for water, administrative corruption also plagues the water sector and is quite common. The beneficiaries of this water reallocation system are not only the rural elite, for example the large and politically influential landlords, but also the small and medium capitalist farmers. If not properly addressed, these complications of decreasing water resources could result in serious political and economic hostility among the provinces. If it wants to harness its potential to increase storage capacity, Pakistan must improve its water-use efficiency and manage its groundwater and surface water resources in a sustainable way. Strengthening the institutions and removing mistrust among the provinces are the key elements for maintaining a sustainable irrigated agriculture in the Indus Basin.

Sustainable transboundary water governance is often challenged by conflicts between agents, which necessitates the design of cooperative and self‐enforcing alternatives to facilitate equitable water distribution. A pervasive and critical problem related to many transboundary rivers is that the total allocation or demand of riparian states is usually much more than that of the total available water. This problem is a major cause of disputes, both nationally and internationally. A key challenge concerns how to allocate the available water among riparian states with competing and often conflicting needs under an uncertain supply–demand gap. To address this pervasive allocation problem related to transboundary rivers, the bankruptcy method is used. The bankruptcy method distributes water among riparian states when their total demand exceeds the total available water. We investigate the utility of this method in the Indus River – a river that is shared among the four provinces of Pakistan, namely, Punjab, Sindh, Baluchistan and Khyber Pakhtunkhwa (KPK) – using five commonly used bankruptcy rules and the Shapely value. Two new bankruptcy rules namely the “groundwater‐based rule” and “the proposed rule” are also proposed to address the usage of groundwater: the land affected by salinity and the gross domestic product (GDP) of each province. Additionally, this paper introduces a new method to compare and contrast the bankruptcy rules, the Shapely value and the two proposed rules. The findings suggest that the groundwater‐based rule has the lowest dispersion and is the preferred method for water allocation in the Indus River Basin. The use of the bankruptcy rules, the Shapely value and the two proposed methods has the potential to address the supply–demand mismatches of shared rivers. The proposed framework for selecting the best rule is recommended as an effective tool to facilitate negotiation over practical water allocation within transboundary river basins.

The ranking of the reservoirs in Pakistan is an important decision and it has a vital impact on the sustainability of the region and the economic operation of the reservoir. The reservoirs ranking is a vital problem which involves multi-criteria decision-making. The framework proposed in this paper involves the Fuzzy AHP-TOPSIS method for the ranking of reservoirs in Pakistan. Potential feasible locations are identified from the Water and Power Development Authority, Pakistan. Weight calculation for the criteria is done by the fuzzy AHP method, which is a multi-criteria decision-making method. In order to model the fuzziness, equivocacy, incomplete knowledge and ambiguity, the fuzzy AHP is used. Furthermore, in order to rank the selected reservoirs based on their performance, the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) is applied, which is a multicriteria decision making method. We demonstrate the application of the above-mentioned methods to the case study of the Indus Reservoir system in Pakistan. A decision support tool is provided for the decision makers in this paper to manage, evaluate and rank the planned reservoirs in the Indus River.

Abstract A common problem in water resource allocation is to design a stable and feasible mechanism of water sharing in critical scarcity conditions. The task becomes very challenging when the water demand exceeds the available water resources reserves. To address this pervasive allocation problem related to transboundary rivers, the bankruptcy method is used. The bankruptcy method distributes water among riparian states when their total demand exceeds the total available water. This paper describes a new methodology for the allocation of scarce water resources in a complex system using a stochastic game theory which is an extension of bankruptcy theory. The authors have also proposed ‘weighted bankruptcy’ approach that can be used under a stochastic setting. The weighted bankruptcy approach favors agents with ‘high agricultural productivity’. The bankruptcy rules have been applied in the water resource system in four critical scarcity scenarios. The available water is allocated under the simple and weighted bankruptcy rules. The results showed that under all four scenarios, the weighted bankruptcy rules favor the agents which have a high agricultural productivity. The stochastic bankruptcy approach under the simple and the weighted bankruptcy rules can provide important strategic information for better management and sustainable sharing of water resources.

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The question of how to govern and manage transboundary river basin for competing and often conflicting demands due to limited supplies continues to be an issue of concern, conflict, and cooperation. A key novelty of this paper is the use of the Water Diplomacy Framework (WDF) to address supply-demand mismatch using the notion of collaborative problem-solving and joint fact-finding. It builds on innovative applications of game-theoretic approaches and uses equity and sustainability as guiding principles to address the supply-demand mismatch. Five different bankruptcy methods (net benefit ranges between US$17,462M to US$18,201M) and the Nash Bargaining Solution (net benefit ranges between US$18,132M to US$19,216M) are used to resolve supply-demand mismatch in the Indus basin among four provinces within Pakistan. The maximum total benefit generated from the Nash Bargaining Solution is 5.5% higher compared to the best bankruptcy method. Moving from the non-cooperative and rule-based bankruptcy methods to the Nash Bargaining Solutions provided increased benefit for all stakeholders. Reallocation of these increased benefits among the four provinces is done by applying the Nash Bargaining Solutions for homogenous and heterogeneous weights. These findings suggest that aspects of WDF – cooperative problem-solving approaches involving joint fact-finding and exploring different options – has the potential to simultaneously resolve supply-demand mismatch and generate more benefits for all stakeholders.