A business case

DESPITE being hydrologically the most unscientific proposition, the Indus Waters Treaty (IWT) was implemented for one reason — it was a good business plan at the time. It was presented by David E. Lilienthal in two essays published in Collier Magazine in 1952, followed by a letter to Eugene Black, president of the International Bank of Reconstruction and Development (IBRD), urging him to engage with India and Pakistan for the business opportunity their water dispute had presented. Lilienthal built the business case around the then geopolitical post-World War II mind. His arguments rested on four pillars: post-war peace, Cold War geopolitics, a new economic order and the allure of mega infrastructure projects.

Peace held the key then. The war’s scars were still fresh and all states would support anything which could convincingly prevent another war. Lilienthal argued that if Pakistan won its legal case on water rights against India, war would break out, turning Pakistan into “another Korea”, whereas implementing his proposals would prevent conflict. Lilienthal also framed the IWT through a Cold War lens, arguing that “counting noses in Kashmir” (the plebiscite issue) will “solve nothing”. He portrayed Kashmir as a “gateway” for communism to enter into the “fertile resources” of Pakistan and India and “all the way to Arabian Sea”.

He advocated US support for India to prevent it from drifting into communism, emphasising India’s strategic importance as Asia’s second-most populous nation.

Additionally, Lilienthal’s proposal aligned with the IBRD’s goals. The bank sought to strengthen the US dollar-dominated financial system by funding mega infrastructure projects in newly independent nations.

Flowing rivers present an opportunity for cooperation.

Lilienthal pitched the IWT as an opportunity for heroic engineering works, preventing the Indus from being “wasted” in the Arabian Sea and boosting development in both countries. A British Foreign Office memo of November 1951 has been quoted as describing how Lilienthal was a partner at a global financial advisory firm where his chief interest lay in the lucrative nature of the scheme. Thus, a plan was devised to divide the Indus basin.

In the name of peace, Eugene Black convinced Australia, Canada, West Germany, New Zealand, the UK and US to contribute $541 million ($5.93 billion today) for Pakistan which was lured towards the glory of heroic engineering structures with grants and borrowed money.

It capitulated and agreed to the riparian Iron Curtain. India got all the eastern rivers, with no deviation from its original stance of April 1, 1948. The bank got the business.

Kashmir’s plebiscite remains in limbo. Mega structures were built. Lilienthal’s business case was too good to be ignored by any stakeholder.

The global landscape of 2026 is vastly different from the 1950s. With the Cold War over, the imperative for Pakistan-India peace is more pressing as the two neighbours are nuclear-armed. Global awareness has shifted: environmental sustainability is paramount, with both nations committed to SDGs. Financiers are diverting funds to green initiatives, aiming to restore ecosystems. As both countries grapple with floods, landslides, glacial bursts and droughts, there’s zero room for environmentally reckless investments driven by political agendas.

The late Henry C. Stackpole, who was president of the Asia-Pacific Centre for Security Studies, advised senior executives (including Pa­­kistanis and In­­dians) in 2004: “The best way to annihilate your en­­emy is to turn them into your fri­end.” This wisd­­om, paired with to­-day’s eco-aware global landscape, lays the groundwork for a new Ind­­-us basin business case. Pakistan and India share far more concerns — water, climate crises, economic interests — than disputes and these commonalities must be leveraged for a neighbourly future.

Taking a page from Lilienthal’s book, we can align ourselves with the current global mind on environment-friendly sustainable development, international financiers supporting green initiatives, and emerging green technologies. The new business case should be built around conforming to, rather than conquering, nature; political and economic cooperation — not confrontation; and sharing river systems instead of damming and dividing them.

Flowing rivers have been an instrument of peace between upper and lower riparians. They present a great opportunity in the Indus basin for cooperation, friendship, socioeconomic development and lasting peace. The new business case is to let the rivers flow.

The writer is an expert on hydrology and water resources.

Published in Dawn, March 31st, 2026

if you want to get more information about this news then click on below link

More Detail