Much of the literature devoted to the question of water supply in the Middle East would have us believe that it will be the cause of the next conflict in the region. Most works carry titles that include the key words ‘crisis’, ‘conflict’ and ‘dispute’. To many of these commentators the only surprise is that multiple conflicts have not broken out already. There is the pervasive idea that the problem can be treated as a simple equation: fast growing populations, plus higher per capita water demand, minus a decreasing water supply, equals war. Past warnings from Boutros Boutros Ghali and the late King Hussain of Jordan have only served to embolden the prophets of doom.

The problems facing those responsible for water supply and management in many of the region’s states are growing increasingly complicated. At the heart of the matter lies the body of statistics to which the doom- mongers regularly return. According to World Bank figures, the Middle East & North Africa (MENA) region has the lowest per capita availability of water in the world. With only 1,250 cubic metres of renewable water available per person it has less than half the average of Asia, the next most arid region. With water consumption far exceeding renewable supply, it is forecast that water availability will fall to 650 cubic metres in the MENA region by 2025. Already, there is too little water available to large proportions of Yemen, the West Bank and Gaza. Even in the relative privilege and prosperity of the UAE, residents in Umm al-Qaiwain were recently forced to abandon their homes for a period when piped water supplies dried up.

In such a context it is unsurprising that issues of water supply and management have become politically charged, with some analysts quick to paint controversial projects as potential flashpoints. Plans by Ethiopia to construct a series of micro dams across the Blue Nile – which provides about 85 per cent of the Nile’s flow – have caused great concern in Egypt, and have led to a marked deterioration in relations between the two states.

Two of the other great rivers of the region, the Tigris and the Euphrates, have also been at the centre of controversy in recent months, and are certain to stay in the headlines. Turkey’s Southeast Anatolian project (GAP) includes the construction of 22 dams and 19 hydroelectric power plants along the two rivers. Despite Turkish reassurance, Syria and Iraq have voiced concerns over potential disruptions to the flow of the rivers and the possibility of high levels of pollution. For Jordan, Israel and the Palestinians the future of the river Jordan, and who has access to it, is a crucial debate inextricably linked to the fate of the peace process itself (see page 10).

But conflict has been avoided and there is far more to the region’s water problems than conflicts over the control of rivers. As the experience in the GCC has demonstrated, water supply is not a zero sum game and methods of water substitution are an increasingly important issue. The rapid advances of membrane technology are persistently bringing down the cost of desalination, and the trend away from thermal plants will allow for increased production of different grades of water, depending on the end use. In short, cheaper desalination means more desalination.

The high number of desalting projects in the Gulf is likely to grow – most noticeably in Saudi Arabia and the UAE. As technological advance brings down the end-costs per unit of cleansed water, desalination will increasingly become a viable option for other countries in the region that had previously considered the price to be prohibitive. Projects in Jordan, the West Bank and Gaza are currently under examination, and some analysts think rapid progress could be made over the next 12 months.

Not only is more water being ‘made’ in the region, but there are signs that consumption patterns are changing, and that the concept of ‘virtual’ water is increasingly being understood and used. The combined resources of the MENA region are unable to meet the irrigation needs of the region’s population. However, through the import of food the water needed to grow it is effectively imported too. This inflow of virtual water, as it has come to be known, has proved itself to be the most effective means by which water deficits are balanced, and inadequate local supplies boosted. Tony Allan, who heads the Water Issues Group at the School of Oriental & African Studies in London, has calculated that more water ‘flows’ into the Middle East each year as virtual water than flows down the Nile into Egypt for agriculture.

Despite the increased volumes of food imported throughout the region, agriculture still accounts for about 87 per cent of water withdrawals. Radical transformation of local economies involving a rapid, forced contraction of agricultural sectors carries both social and political risks. But there is a growing recognition that the efficient management of demand is increasingly important as water becomes increasingly scarce.

‘The authorities in Jordan are rethinking their priorities in crop choice,’ says Jim Wilson, of British Trade International. ‘They have realised the futility of growing oranges and tomatoes, which require massive irrigation, generate little value, and cannot be easily exported.’ He says attention is turning to premium cash crops, such as artichokes, which consume much less water, and can be sold in European markets. ‘It is the right time to change,’ says Wilson. ‘And it is only a matter of time before similar thinking is deployed elsewhere in the region.’

Virtual solutions

The concept of virtual water is already well understood in some parts of the Gulf, where subsidy-led programmes for agricultural self-sufficiency have either been abandoned or are under threat. Saudi Arabia’s drive for self-sufficiency in the 1970s was achieved at such cost that in the late 1980s subsidies on a number of commodities were slashed, not least because the damaging impact of intensive farming on water supplies was becoming increasingly apparent. Since 1992, wheat production has halved to about 1.8 million tonnes a year, and Saudi Arabia has once again become a net importer – to the tune of more than $5,000 million a year – of agricultural products. In the face of a rapidly growing population, the opportunity cost of the wheat programme, both in cash and water terms, became too great. Analysts say the Saudi experience provides a valuable lesson for other Gulf countries dependent on desalination, and further moves towards the import of virtual water are inevitable.

As populations grow and urbanisation increases throughout the region, the strains on inadequate water resources are growing fast. Attempts to develop new water supply, either through virtual water imports or through desalination, will not alone be sufficient to meet the growing demand. With massive investment needed in water and wastewater management, analysts predict a rapidly expanding role for the private sector, and a wave of restructuring within the public sector, over the next few years.

The process is already well under way in Lebanon. Last year saw the ambitious consolidation of the 22 water supply authorities into six semi-autonomous bodies, one of which is responsible for irrigation. ‘This has been done for three reasons,’ says Dick Wearne of Binnie, Black & Veatch. ‘Operations need to be larger to be effective, cash flows need to be kept moving and, from a planning point of view, the issues need to be approached on a regional scale.’ He says that the reorganisation is a means rather than the end, and the prospects for private management and ownership are positive. Developments on the Awali project for the treatment and supply of water to South Beirut have already attracted both domestic and international private sector interest.

In other areas progress has been more rapid. Last September, France’s Vivendi Water took over the management of both water services and revenues for Bethlehem and Hebron, and Robert Peirce, senior vice-president for Africa and the Middle East, says there are a number of other opportunities in North Africa and the Levant. ‘Morocco is engaged in a plan for private participation, Tunisia is progressing slowly down this path, and Algeria has recently put out some tenders for management,’ says Peirce. He says the twin drivers for this new approach are the need to economise on water use – in some areas wastage is as high as 50 per cent – and to renovate existing sewerage and water distribution networks. ‘Over the next five years there will be a rapid growth in private sector participation throughout the region,’ he says.

For major installations there is a growing appetite for the build-operate- transfer (BOT) model. In Egypt, bids from a number of consortia are on the table for the $200 million Suez water conveyer project, and in Kuwait bids for the $350 million Sulaibiya wastewater treatment plant project are due in by 21 February. ‘Clients are buying into the whole BOT idea,’ says Jim Wilson. ‘It allows them to delay government expenditure, and have people gaining experience of how to develop and manage processes.’

However, government and non-government organisation capital expenditure will continue to play a crucial role in developing water supply and management projects. ‘The participation of the World Bank, and other funding institutions, changes the private sector view,’ says Peirce. ‘There is an attractive model in which public sector funds are initially used to bring improvements to the infrastructure, and then the doors are opened for progressive management solutions to be provided by the private sector.’ The World Bank itself has been playing its part with sizeable investments planned in Jordan and Algeria, and private investment is expected to follow.

While few dispute the need for a greater private sector role, political and constitutional barriers remain. In Jordan, only the state is legally allowed to own water, and BOT projects are based on the ownership of methods of water transportation. In Saudi Arabia, the issue of private sector involvement is barely on the agenda. The issue of ownership is not the only source of controversy. The Sulaibiya wastewater project encountered religious opposition on the grounds that the treated water might not be sufficiently pure for consumption.

Water issues are firmlyon the political agenda throughout the region and their significance will grow as the strain on inadequate supplies, and inefficient management and distribution systems, increasingly affects other areas. With agriculture, industry and growing urban centres competing for an increasingly scarce commodity, there will be a dwindling number of issues that are not related to the water debate.

More positively, the doom-mongers are likely to be proved wrong. Innovative solutions to water problems would balance their pessimistic equation far more attractively than the gloomy predictions of war.