A severe shortage of water is one of the critical problems facing the countries comprising the Gulf Cooperation Council (GCC). On the supply side, very low levels of precipitation and the absence of lakes and major river systems have made water scarcity a defining characteristic of the Arabian Peninsula where these countries are situated. Natural water resources are restricted to runoff produced from flash floods and groundwater in shallow alluvial aquifers. While there are also sizeable fossil water reserves trapped in deep sedimentary formations, the problem is that these are not renewable. Although modern technologv has enabled the GCC countries to supplement these sources by desalination of sea and brackish water for domestic use, desalinated water remains expensive.1 On the demand side, the picture is even grimmer. The discovery of huge oil and gas reserves under the sand dunes of the peninsula have fuelled population growth, economic development, and a rising standard of living-all of which have increased the demand for water. The misguided water policies adopted by the GCC states have further exacerbated the situation. One example is encouragement of unconstrained demand through the creation of a patriarchal system of welfare provision while another is the promotion of agriculture in the name of food security.2 Consequently, demand for water has become unlimited and unsustainable. While in the Arabian Peninsula water scarcity is a serious problem, on the other side of the Persian Gulf in Iran, water resources are more plentiful (see Table 1 below). Although, as the table indicates, Iran is by no means a waterrich country; the difference in water endowment between Iran and its southern neighbors is sizeable enough to make water exports a plausible option. This is particularly the case when considering that most of Iran's major rivers which can provide water for export-Karun, Dez, Karkheh and Jarrahi-are located in the southwest of the country in close proximity to the Arabian Peninsula. In fact, this area, which falls within the province of Khuzestan, contains one-third of the country's entire surface water.3
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