Optimal and sustainable use and development of international rivers as well as protection and preservation are dependent on cooperation, and cooperation is an essential basis for the attainment and maintenance of an equitable allocation of the uses and benefits of international watercourses. The advantages of cooperation between states sharing an international river have been amply demonstrated by scholars and inescapably illustrated in game theory.

However, Egypt and Sudan, the lower sub-basin riparians, who presently benefit exclusively from the sub-basin�s resources, maintain a clear advantage by preserving the status quo and are not likely to embrace cooperation. Moreover, the present policies of the international financial institutions, which require the prior consent of each sub-basin riparian before funding any projects proposed by Ethiopia,[i] enables the strategy adopted by the lower riparians and perpetuates the status quo.

To maintain the status quo, Egypt as a Blue Nile Sub-basin riparian continues to veto international financial support for Ethiopia�s sub-basin development efforts on various grounds, but primarily on the basis that Ethiopia�s utilization of the Blue Nile Sub-basin would cause harm to Egypt�s claim of �established rights.� Without the benefit of international aid, financing and technical assistance, none of the riparians has the economic means to independently undertake significant development projects in the sub-basin.

Until recently, private financing for major schemes in developing countries was also constrained because of potential lawsuits, financial risk, and political instability.[ii] Consequently, despite the Ethiopian Government�s seven-decade attempt to utilize the sub-basin for the country�s economic and agricultural expansion, favorable results were not achieved and the status quo has heretofore triumphed.

One factor, which has made the stalemate tolerable,[iii] was the political instability and ready international food assistance to relieve the economic and political pressures for increased utilization of the sub-basin waters by the riparians. For example, food aid to Ethiopia made possible the augmentation of the nation's agricultural requirements to the extent that, while not retreating from its previously taken position, Ethiopia was not driven by impelling circumstances of drought and famine to exploit the sub-basin and its resources.

However, if Ethiopia secures the necessary financing to carry out its basin development plans, or if there were continuing drought, famine, and an unsatisfactory level of international food assistance to mitigate the effects of drought and famine, Ethiopia may not then tolerate the present deadlock. [iv] The predictable and inevitable result will be unilateral development. This article illustrates recent episodes, which have revitalized the two upper Blue Nile riparians� determination to unilaterally develop the sub-basin within their respective territories, the increasing trend towards unilateralist, and the consequences and the effectiveness of Egypt�s existing strategy to restrain unilateralist in the Blue Nile sub-basin.

Enabling Environment

Four years ago, the Egyptian government publicized to its people that ninety four and nine tenths percent of the total water furnished by the Nile Basin is �lost or is unused� and the Nile riparians �thus have a vast opportunity to increase their supply of water� and that �the current disputes over the Nile are focused on less than five percent of the Nile Valley�s total water potential; this fact should drive home the great vistas of development.� [v]

Such statements fuel the public�s anger and suspicion against the upper riparian �who covet an equitable share from Egypt�s inconsiderable apportionment of five percent when there is plenty of unused or lost water to be had.� Along such public pronouncements by the Egyptian Government, Egyptian experts warn that the present allocation of Nile waters to Egypt barely meets Egypt�s needs and �any significant reduction would jeopardize [Egypt�s] very existence.�

Egyptian experts further publicized that �Ethiopia and Sudan have ample rainfall and vast alternatives water sources they can draw on to solve their water shortages, food and agricultural problems and to boost their overall development without having to impinge on Egypt�s water right.�[vi] Egyptian experts have also publicized that any proposed projects in Ethiopia are not only unnecessary but are primarily motivated by political considerations and �conspiracies� to use the �water card� to exert pressure on Egypt variously by the United States in the past and Israel at the present time.[vii] Ethiopian development projects will �wreak havoc�, �spell an end to Egyptian agriculture,� and �change the regime of the river and spell havoc for all the structures currently built along the northern reaches of the Nile.�[viii]

According to Rushdi, the foremost Egyptian authority on the Nile, activities of the Egyptian Government in reference to the Nile Basin Initiative are also �shrouded in the tightest secrecy� and have aroused suspicion among the Egyptian experts who must rely on �unofficial press reports� and reports from Ethiopia and Sudan. He reports that the Egyptian Government has failed to release information to the Egyptian people concerning, for example, the nature of the projects proposed by the Nile riparians despite the significance of these issues.[ix]

On the other hand, in Ethiopia, economic development and food security have been increasingly linked to the development of the Blue Nile Sub-basin and have influenced the strategies adopted by �the state.�[x] In the last year, the Ethiopian government has widely publicized the need to use the Blue Nile Sub-basin as a means to achieve food self-sufficiency and economic development through irrigation and hydroelectric dams.

The government has emphasized the present under-utilization of the sub-basin and its resources, the enormous potential presented [xi] and the government�s determination to exploit the resources to deliver the promised rapid economic and social advancement of the nation. [xii] The government has routinely identified Egypt as the sub-basin riparian who continues to frustrate Ethiopia�s effort to improve the conditions in the country by developing the potential of the sub-basin in its sovereign territory.

Mounting expectations of economic development and prosperity have fueled the national hostility towards Egypt, in particular. Ethiopian scholars and intellectuals have depicted Egypt as the traditional �enemy� of Ethiopia and the major obstacle to legitimate aspirations of the Ethiopian people intensifying the historical, cultural, ideological and political differences and suspicions [xiii] thereby galvanizing calls for unilateral development of the sub-basin within its territory.

In spite of the strength of scientific consensus, statements by government officials, intellectuals and authorities have triggered false impressions, raised suspicion and negative images and hostility rendering the level of trust among the sub-basin riparians. The chosen course of action has undermined the willingness to legitimately weigh the concerns of other co-basin riparians [xiv] and emboldened the riparians to act freely in pursuit of their own national self-interest.

Towards Unilateralist

Despite objections from the upper riparian, Egypt unilaterally embarked on its �New Valley Project� whereby water will be pumped annually from Lake Nasser and transported thousands of miles, outside the natural drainage basin of the Nile, to provide drainage for reclamation projects. Egypt has also proceeded unilaterally with the North Sinai Agricultural Development Project - a project aimed to carry waters from the Nile into the Northern Sinai, by traversing the Red Sea and the Suez Canal, in order to open the way for new settlements.

Ethiopia believes that the Egyptian projects are wasteful attempts to secure even more water and to create conditions in which Egypt becomes the sole beneficiary of the Nile by committing all of the Nile discharge, thereby pre-empting negotiations and the rights of other Nile riparians. Ethiopia also questions the legality of Egypt�s diversion of the Nile waters from it natural basin, while moving to impede Ethiopia's use of Blue Nile Sub-basin waters to meet its agricultural and energy needs.

However, Egypt believes that it has the right to use its allotment of Nile waters under its agreement with Sudan as it sees fit. Egypt�s unilateral actions have brought about serious tension between Egypt and Ethiopia, particularly after the Egyptian offer to Israel of Nile �water for peace.�

In the past, Ethiopia and Sudan did not pose an immediate threat to Egypt's water supply. Sudan's international isolation, Ethiopia�s economic and political instability and the Egyptian veto power over international financing of development projects in the upper basin provided little hope of foreign assistance in order to build expensive water projects. However, with new oil wealth, Sudan�s constraints on unilateral action have been greatly reduced.

Similarly, Ethiopia, with relative political stability and recent privatization of its power sector,[xv] now possesses the strength to mobilize private investment to develop the Blue Nile River and other tributaries in the sub-basin. According to Ethiopia, in the absence of an accord for �equitable� utilization �the only alternative left [is] for each country to follow the example of Egypt in unilaterally making use of the Nile as it deems fit. � If our proposal for equitable sharing falls on deaf ears, Ethiopia will be forced to join in the scramble to obtain her fair share.�[xvi]

Both Sudan and Ethiopia are proceeding unilaterally and independently of Egypt with sub-basin development projects. Sudan and Ethiopia have signed an agreement for power sharing arrangements and are exploring flood control projects on the Blue Nile and the Sobat River Sub-basins, particularly as a result of the recent devastating floods in Ethiopia and Sudan (threatening the capital city of Khartoum).[xvii]

Furthermore, financial assistance from international financial institutions is no longer a significant factor for Ethiopia and Sudan and the prior consent of Egypt is no longer a constraint on unilateral actions. Egypt and international institutions are losing the benefit of any influence, prior consultations and negotiations with Ethiopia, for joint strategies, solutions and sustainable development of the sub-basin that will improve payoffs for all riparians compared to unilaterally determined action.

According to Briscoe, Senior Water Advisor to the World Bank, private financing will play a major role in the future of the power sector as developing countries take the �path of least resistance� by using their own resources for these controversial investments while submitting projects (to the World Bank and other international financial institutions) which are more politically palatable.[xviii] Briscoe estimates that in the 1990�s World Bank financing for hydro-projects has dropped by approximately twenty five percent.[xix] It is further estimated that in the future, ninety percent of financing for power projects will come from private financing.[xx]

Ethiopia, as upper riparian, is now less concerned with trying to change Egypt�s behavior and is acting unilaterally to develop the sub-basin, lack of international financial assistance notwithstanding, with thousands of smaller micro-dam irrigation projects, financed with local labor, materials and revenues.[xxi] Ethiopia also plans to proceed with its major development projects to utilize what it perceives to be its �equitable share� as reflected in its development plans.

Since privatization of the power sector, the Ethiopian government has actively sought and successfully attracted alternative sources of financing for the development of the hydroelectric and irrigation potential of the sub-basin�s resources. Ethiopia is presently completing one major dam (scheduled for completion in 2003) on the Gojeb River, in South Western Ethiopia, through private investment and ten small dams in the catchment areas of the Blue Nile Sub-basin.

Farmers in Sudan and Ethiopia are also building increasing numbers of small earthen dams on the tributaries of the Nile presently taking about 2-3 million m�/yr. out of the river. Ethiopia recently announced a private venture with an Italian Company to build yet three more hydropower projects in different parts of the country with an investment totaling US $400 million.[xxii] On May 22, 2002, the Ethiopian Government announced that Cal Tech International, an American Company, was to participate in the construction of a dam for production of 350 to 400 MW of hydroelectric power on the Chelga River in the Blue Nile Region of Amhara.[xxiii]

According to the government, the US $600 million dam would meet the power needs of the region as well as surplus electricity for export to neighboring countries. As this conclusion is being written, the China National Water Resources and Hydropower Engineering Corp. (CWHEC) is completing one of the largests dam in Africa on the Tekeze River, a major tributary of the Atbara River in the Blue Nile Sub-basin in Ethiopia.[xxiv] The proposed US $224 million dam, which will stand 185 meters high, will rival the Three Gorges Dam on the Yangtze River in China, one of the largest and most controversial dams in the world, by 10 meters.[xxv] These and similar private and bilateral investments have increased confidence among Ethiopian policy makers who feel emboldened to develop their water resources without the need and constraints of international financing.

Sudan has also announced the interest by a Chinese firm to build a dam at Qajbar and two other dams on the main Nile at Merowe. It is also conceivable that Sudan�s newly discovered �oil wealth� would enable it to unilaterally proceed further with its basin development plans and joint projects with Ethiopia for electricity and control of devastating floods in Sudan. The 1959 treaty between Egypt and Sudan allows the Sudanese farmers to build small dams.[xxvi]

If the trends increase significantly as is expected, it could amount to a serious diminution of basin Nile water reaching Egypt. In view of the changing dynamics in the basin, there have also been increasing demands from Sudan to revise the 1959 Agreement, which disproportionately imposes a burden on the Sudan in the event water sharing with upper Nile riparians becomes necessary.[xxvii] Sudan�s several threats to unilaterally rescind the 1959 agreement have evoked aggressive responses and threats from Egypt. The mutual suspicion between Sudan and Egypt reduces the possibility of cooperation and joint development projects such as the Jonglei Project. As Egypt's �water security� becomes increasingly jeopardized by development projects in Sudan and Ethiopia, tensions between the sub-basin countries are sure to increase.

Although unilateral actions by the upper riparians and the escalating tensions may increase the risk of conflict with Egypt, the status quo is perceived as �inequitable�. The perceived inequity and the Egyptian proclivity to act unilaterally will breed domestic political discontent in Ethiopia and Sudan and will propel an unmitigated determination to surmount Egypt�s de facto veto power in the sub-basin.

In the last five years, unilateral development through private investment has increasingly proved to be a viable and effective alternative to conventional international financing for major hydroelectric and irrigation projects in the sub-basin. In the long term, the freedom to act independently, without constraints, may gain favor as the upper riparians� best alternative to a negotiated agreement with Egypt and thus another barrier to a permanent accord. Therefore, it is in Egypt�s interest to act timely and to apply wisdom in the conduct of its Nile policy.