The Middle East peace process, now limping rather than leaping forward, brought with it the promise of future co-operation rather than eternal conflict. A vision of regional economic transformation, helped by Gulf oil money, was encouraged as an alternative to the sterile arguments of the past. That prospect may seem as remote as ever this winter but the seeds of future co-operation have been planted in many minds.

Co-operation is certainly in evidence in the emerging approach to water issues. Much of the region faces a water deficit early in the next century unless existing resources are managed more efficiently. This is now widely appreciated. The unequal distribution of water between Israel and the Palestinians is deeply contentious, but Israel and Jordan have now established a framework for future co-operation.

A key issue across the region is the control of water use through measures to contain the growth in per capita consumption. Modern urban environments in the Middle East have boosted demand while the supply of renewable resources is more or less fixed. Jordan provides a good example.

Population growth is a major threat to Jordan’s water resources which are already well managed through metering and relatively high water charges. Municipal and industrial consumption, which accounts for 25 per cent of total water use, is expected to account for 40 per cent of water use by 2015. By then, Jordan’s population is expected to have more than doubled, to 7.4 million from 3.2 million in the early 1990s.

There are under-exploited water resources remaining in Jordan, but the long-term outlook is bleak. According to the World Bank: ‘Even with rational planning and allocation of Jordan’s water, all known water resources within Jordanian territory would be fully used by 2015, and about one-third of the irrigation water in the Jordan valley would consist of treated effluent.’ The options after that would be to reduce the area under irrigation, to demineralise water or to import water from other countries.

Such critical water shortages are looming elsewhere in the region but Jordan is credited by the World Bank as one of the first countries ‘to appreciate the seriousness of the problem and to seek new strategic solutions.’ More troubling for Jordan and other regional states facing similar problems is the prospect that the water crisis, due to its scale, is not amenable to rational solutions.

Demand management

Economic anxieties rather than strategic solutions lie behind changes that have begun in Saudi Arabia’s approach to water use and conservation. Policy changes over the past 12 months point to the adoption of demand management techniques to control consumption of a resource that was previously provided as an almost cost-free entitlement.

A start was made last year when the government, driven by a desire to cut the $1,300 million a year bill for home-grown wheat, slashed its grain purchases. In 1994, it bought no wheat at all from the six largest producers and the wheat harvest is estimated to have shrunk by 50 per cent. This has huge implications for water consumption.

By the late 1980s, agriculture accounted for about 90 per cent of Saudi water use, against just 6 per cent for domestic users, with the rest accounted for by industry and the irrigation of public spaces. Wheat production, which peaked at more than 4 million tonnes in 1992, was by far the biggest agricultural consumer. By cutting its purchases and guaranteed purchase prices for wheat the government has more than halved the crop, to an estimated 1.8 million tonnes in 1994, and helped contain the profligate use of water in irrigation.

Pricing is being used as a weapon in the struggle to impress the need for conservation on domestic consumers. The 1995 Saudi budget introduces a five-tier sliding scale of water charges in place of the previous flat rate. The new scale will lead to far higher payments for big consumers who could see their quarterly bills rise massively under the new regime. Moderate users will be much less affected.

Apart from these first tentative attempts at demand management, Saudi Arabia relies heavily on desalination to meet domestic demand. Plants under construction at Jubail, Al-Khobar and Shuaiba will add 180 million gallons a day (g/d) when they are completed and the Saline Water Conversion Corporation has plans for building another 200 million g/d of capacity. Desalination is a costly option – desalinated water costs $1-2 a cubic metre compared with an average incremental cost for groundwater of about $0.40 a cubic metre.

The cost of more desalination projects will be a big burden on the Saudi exchequer unless consumers are obliged to pay the full cost of provision, or the construction, operation and maintenance of plants are hived off into the private sector. Privatisation is an option but it has yet to become an active policy in the kingdom.

Other GCC states, with fewer financial resources and fewer political reservations, are pressing ahead with private proposals. Bahrain faces the prospect that its primary water supply may dry up completely by 2010 and is reviewing plans for its first independent desalination project. Oman has also scored a first, with an invitation for the private sector to take over construction and operation of waste management in the capital area on a 30-year contract from Muscat municipality.

Such initiatives to involve the private sector in water provision and the management of waste should become more common as Gulf governments get to grips with their recurrent budget deficits. The World Bank has pioneered good practice when it comes to water resources management and water projects have been a major recipient of bank funds since the 1950s. Many of its recommendations are starting to find favour in the Middle East which is at last giving its water needs the urgent attention they deserve.