The objective of this paper is toexamine the challenges in the water sector faced by Armeniatoday, and outline options for management and allocation ofits water resources in the future, considering the need fora stable, transparent apublic sector management frameworkand sustainable resource use for long-term privateinvestment and job creation, and for appropriate balancesamong water uses for domestic, industrial, agriculture,electricity generation, watershed protection, and ecologicalpurposes. The report builds on the recommendations of theIntegrated Water Resources Management Planning (IWRMP)Study, which was supported by the World Bank, financed bythe Government of Netherlands, and completed in 2001. Thereport also builds on experience with project implementationto date in water-related sectors. The report suggests that awater management strategy that focuses on rehabilitation andreduction of water losses, and balances for drinking,irrigation, hydropower, and environmental use is likely tohave the highest welfare gains. Further, a strategy thatuses economic instruments to manage demand, and increasesprivate sector participation and local stakeholderresponsibility for system operation, with the public sectormaintaining a key role in overall water resourcesmanagement, will help improve the efficiency of water use.
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