Sheheryar Khan
Published March 15, 2026
DAWN
A mid the ongoing turmoil in global politics that continues to dominate headlines, a recent report by the United Nations University Institute for Water, Environment and Health (UNU-INWEH) has largely escaped notice.
The findings and implications of this report, however, are profound. It argues that, globally, we have now entered what it describes as an “era of water bankruptcy”, a formulation intended to capture the structural nature of the crisis now unfolding. This deliberate shift in language is itself significant.
For decades, discussions around water scarcity have largely been framed through the vocabulary of crisis — a condition of mounting stress on rivers, aquifers and reservoirs as demand rises and supply grows more erratic and unreliable. Bankruptcy, however, suggests something qualitatively different, a condition in which withdrawals outpace the natural processes that replenish them, and where the imbalance is no longer episodic but built into the way economies and societies consume water.
The report develops this argument through a financial analogy that helps clarify the nature of the problem. Water systems, it suggests, function analogously to economic accounts. Some water resources behave like annual income, such as rainfall, river discharge and seasonal recharge that renew themselves within relatively short cycles. Others resemble long-term capital, such as groundwater aquifers, glaciers, wetlands and soil moisture, that accumulate slowly over geological timescales.
The world isn’t just running short of water. According to a new UN report, it is going bankrupt. For Pakistan, dependent on a single river basin and a rapidly expanding network of unregulated tubewells, the implications are dire…
This use of financial language is deliberate. Much like the Stern Review (2006) reframed climate change as a problem of economic risk rather than a purely environmental or future-oriented concern, the concept of water bankruptcy attempts to translate ecological depletion into terms that policymakers and economic planners can no longer ignore.
LIVING OFF CAPITAL
Under stable conditions, societies draw primarily on renewable flows. Yet the report argues that this balance has shifted in many parts of the world. Growing urban populations, expanding agricultural demand, rising energy consumption and inadequate wastewater management have collectively increased pressure on water systems, leading countries to rely increasingly on reserves that were never meant to sustain continuous extraction.
The danger lies not only in depletion but in the timescales involved. When aquifers are overdrawn or glaciers retreat, replenishment — if it occurs at all — plays out across timescales far beyond a human lifetime. In economic terms, the report suggests, societies are no longer living off annual income but are gradually liquidating natural capital. It is this sustained drawdown of ecological reserves rather than temporary scarcity alone that the authors of the report describe as water bankruptcy.
What makes this pattern particularly destabilising is that it often unfolds gradually and remains partially concealed within existing infrastructure systems. Deep tubewells enable continued extraction even as groundwater tables fall, reservoirs and dams smooth seasonal variability, and inter-basin transfers redistribute supply across regions. Yet these mechanisms do not generate new water. They merely delay the point at which depletion becomes visible, allowing extraction to continue even as reserves quietly diminish.
The report’s central warning is, therefore, not simply that water scarcity is intensifying, but that many water systems are operating in a state of structural overdraft. Without governance systems capable of measuring withdrawals accurately and aligning them with ecological recharge, societies risk locking themselves into patterns of water use that steadily erode the very reserves on which future stability depends.
PAKISTAN: A CASE STUDY
If the language of water bankruptcy appears to be abstract (it certainly did so to me), its implications become clearer when viewed through the experience of countries where water systems are already under severe strain, and Pakistan offers one of the more instructive examples.
Concerns about the country’s water future have been expressed through the familiar vocabulary of scarcity, such as falling per capita availability, recurring drought warnings, or the spectre of inter-provincial disputes over river flows.
According to a World Bank study, the total renewable freshwater available per person in Pakistan is currently estimated at around 1,100 cubic metres per year, but is projected to decline to 900 cubic metres by 2050 due to population growth alone, which would push the country well below the international threshold for water scarcity.
Yet the framework proposed in the report suggests that the challenge confronting Pakistan may be better understood not merely as scarcity, but as the cumulative outcome of a development model that has steadily expanded water extraction without corresponding attention to ecological limits.
At the centre of this model lies an agricultural system that remains heavily dependent on irrigation. A handful of crops — wheat, cotton and sugarcane — account for approximately 80 percent of irrigation water use, underscoring how concentrated water demand has become within the agricultural sector.
Despite possessing one of the largest contiguous irrigation networks in the world, which supports agricultural productivity, the system has also encouraged patterns of water use premised on the assumption of a reliable and abundant supply that is no longer guaranteed.
This vulnerability is compounded by dependency on a single source: around 95 percent of Pakistan’s total renewable water originates from the Indus Basin, making the national water economy uniquely vulnerable to both hydrological stress and political contestation. Over time, as the demand for food, energy and urban expansion has grown, groundwater has increasingly become the buffer that sustains this system.
Nowhere is this more evident than in Punjab, which accounts for nearly 75 percent of the country’s cropped area and where the number of agricultural tubewells has risen from around 330,000 in 1994 to over 1.2 million by 2024.
In the short term, this flexibility has helped maintain agricultural output and urban growth. In the longer term, however, it has also encouraged a pattern of water use that resembles the dynamics described in the water bankruptcy report — specifically a growing reliance on reserves that replenish far more slowly than they are being depleted. Aquifers that accumulated over centuries are now being drawn down to sustain present demand, even as pressure from population growth and climate variability continues to intensify.
A GOVERNANCE GAP
This also reflects a set of governance arrangements that have struggled to keep pace with the scale and complexity of Pakistan’s water use.
Water management in the country remains fragmented across multiple institutional levels, with responsibilities divided between federal agencies, provincial departments and a range of specialised authorities, whose mandates often overlap but rarely converge in practice. While this institutional architecture has evolved over decades, it has rarely been accompanied by the regulatory mechanisms needed to monitor and manage extraction effectively.
Groundwater provides perhaps the clearest example of this governance gap. Despite its growing importance to both agriculture and urban supply, groundwater extraction in much of the country remains largely unregulated. Private tubewells have transformed groundwater into an informal but indispensable component of the national water economy, allowing farmers to stabilise crop production and cities to supplement unreliable surface supply.
The challenge, therefore, is not simply one of declining availability but of institutional capacity. Without reliable systems for measuring withdrawals, setting enforceable limits and aligning water use with ecological recharge, the gradual drawdown of reserves can continue largely unnoticed until the point at which reversal is no longer possible.g
The writer focuses on environmental issues and is currently associated with WWF-Pakistan. He can be reached at sheheryarkhan95@gmail.com
Published in Dawn, EOS, March 15th, 2026
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