The countries of the Middle East are characterized by large temporal and spatial variations in precipitation and with limited surface and groundwater resources. The rapid growth and development in the region have led to mounting pressures on scarce resources to satisfy water demands. The dwindling availability of water to meet development needs has become a significant regional issue, especially as a number of countries are facing serious water deficit.

Syria is becoming progressively shorter of water as future demand is coming close to or even surpassing available resources. Syria had a population of 18 million in 2002, and its total renewable water resources (TRWR) is estimated around 16 × 109 m3 per year. In other words, the per capita TRWR is less than the water scarcity index (1,000 m3 per person per year) which will make the country experience chronic stress that will hinder its economic development and entail serious degradation. Unfortunately, if water demand at current prices continues to increase in the same way, Syria will experience an alarming deficit between the available resources and the potential needs in the near future.

In Syria, until fairly recently, emphasis has been placed on the supply side of water development. Demand management and improvement of patterns of water use has received less attention. The aim was always to augment the national water budget with new water. The most popular way of achieving this aim was to control surface flows by building new dams and creating multi-purpose reservoirs (there are now around 160 dams in Syria with a total capacity of 14 × 109 m3). Irrigation schemes were also built and agricultural activities were expanded greatly to achieve self-sufficiency in essential food products and food security. However, this is no longer achievable with the limited water resources available; water demand is rapidly increasing and easily mobilizable resources have already been exploited.

The objective of this paper is to think of different possible ways to manage water demand in the agricultural sector of Syria. It mainly involves two main management options: taxation as a centralized option and water markets as a decentralized one. While water demand management refers to improving both productive and allocative efficiency of water use, this paper focuses on two allocative measures (taxation and water markets) and does not thoroughly cover productive measures such as rehabilitation and upgrading of irrigation schemes or improving operation. However, the paper does not attempt to settle the question for or against each option but tries to find some elements to determine under which conditions the option can lead to expected outcomes taking into account the history of management and the local conditions in Syria: political, social and economical. The paper also looks at other alternatives such as cooperative action and lifting subsidies and argues their possible association to the main management options that may help in reducing the difficulties of implementation.