Abstract
Many agrarian countries have heavily invested in large-scale water projects to promote their agricultural development. There have been, however, few attempts to devise strategic water resources planning accounting for the macroeconomic linkages ofagriculture. This article presents such a strategic water resourcesplanning framework for Bangladesh. First, a dynamic costminimization model is solved to compute the optimal investmentneeded in various water projects such that an agricultural growthtarget can be met. Next, the minimum cost solution is againderived accounting for the macroeconomic linkages of agriculture,which, under different macroeconomic scenarios, results innoticeably different policy implications for optimal waterplanning. These results suggest that the traditional sectoralapproaches of planning water investment projects are generallyinconsistent with the broader macroeconomic reality of Bangladesh.
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