The issue of water availability in the Arab world has continued to provoke a great discussion. Data from a major report on water in the Middle East and North Africa (MENA) published on 11 March by the World Bank shows that all countries in the region are facing a water crisis. Nearly 80 per cent of all water which falls in the region is used, compared with only two per cent in other regions such as Latin America, the Caribbean and Sub-Saharan Africa.The water crisis is expected to worsen further in light of high population growth and climate change. In fact, it is estimated that per capita water availability in the region will fall by half by 2050.The main question in this regard is: does water scarcity pose a real threat to socio-economic and political stability in the region, or are Arab countries capable of meeting such a challenge?

When addressing the water crisis in the region, focus tends to remain narrow and technical. The assumption is that by reducing population growth and usage of new technology, such as more sophisticated irrigation systems, the water crisis can be averted. Also, a great deal of attention is given to improving the management of water resources and building new infrastructure, since water infrastructures have been deteriorating over the last two decades.But the MENA's water crisis requires more than technical solutions. Such a key problem should be considered within the context of the political economy of reform in the Arab world, as well as regional and bilateral cooperation.In the Arab world, only 10-15 per cent of the water is used for household, commercial and industrial purposes, while 85 per cent is being consumed by the agricultural sector.

But in many MENA countries, this sector's contribution to employment and gross domestic product (GDP) is very limited. In Jordan for example, employment in agriculture is less than four per cent of the total labour force, and its contribution to the GDP is less than three per cent. Yet the agricultural sector consumes more than 75 per cent of the country's water resources. Meanwhile, in Oman the agricultural sector uses more than 90 per cent of the country's water, it only employs about 6.5 per cent of the labour force and its contribution to the GDP is about 1.5 per cent.

Understandably, the issues of agricultural productivity and water consumption are highly sensitive in some Arab countries, since many states are incapable of implementing reform policies directly affecting the agricultural sector. In the absence of enough jobs and lack of effective social safety nets, reform policies targeting the agricultural sector would severely affect people who are linked directly or indirectly to this sector. The biggest riddle is that although an eventual water crisis was evident decades ago, MENA countries chose to avoid the controversial issue. Many Arab states only reform in response to current severe crises, rather than meet the needs of their citizens or pre-empt expected socio-economic challenges.

While it is imperative to address the water issue within broader economic reform policies, such a problem needs regional and bilateral cooperation. Water cooperation between Saudi Arabia and Bahrain has laid the ground for dealing with the water crisis in both countries. Cooperation between MENA countries and each of Israel and Turkey, both in control of key water sources in the region, is crucial in tackling the water dilemma head on.

Failing to handle the challenge successfully threatens not only an escalation in regional conflicts, but also domestic clashes and social tension in many parts of the Arab world. It is time for the region to move forward and unify efforts to engage in comprehensive reform based on clear and well defined objectives. Certainly, reform should focus on diversifying economic activities and tackling not only water crisis, but also other socio- economic concerns such as unemployment and poverty. In addition, such reform should emphasise the different aspects of increasing productivity, equity and sustainability of the economy.

The main lesson to be learned from the existing water challenge by all MENA countries, especially oil-rich ones, is that natural resources -- including oil and gas -- cannot be taken for granted; the economic and political repercussions of avoiding to address major problems could be great and beyond the control of Arab states.

* The writer is a Palestinian economist and an associate at the Carnegie Middle East Centre in Beirut.