BACKGROUND
	PROJECT OBJECTIVES
	CURRENT STATUS

Water policy in Egypt faces a number of serious challenges to increase water use efficiency by all users; sustain water quality and natural resources; reduce the financial burden on the state from full management of water resources; and increase flexibility in water resources allocation.

Market-based incentives (MBIs) are appropriate policy tools for reducing the effects of pollution from various activities. MBIs are incentives/disincentives that use existing market and price signals, and sometimes the creation of new markets, to entice appropriate allocations of resources and internalization of pollution costs. In assessing the merits of alternative MBIs, considerations include their: effectiveness in achieving objectives; cost efficiency; equity and social impact; flexibility; dynamic efficiency (including productivity-enhancing innovation); political acceptability; informational requirements; and consistency with national and international law.

The Agricultural Policy Reform Project (APRP) initiated a Water Policy Reform Program (WPRP) in the water sector with the Ministry of Water Resources and Irrigation (MWRI) in 1996. The many policy adjustments achieved under APRP have brought the MWRI to a new era of operation and management.

However, water policy problem areas remain and limitations in the capacity of government staff inhibit effective water resources management. The Water Policy Advisory Unit (WPAU) of MWRI is considerable in keeping the dialog between USAID and the MWRI flowing and ensuring that the momentum for change moves in a positive direction within the MWRI. The WPAU will sustain progress in implementing the agreed upon policy reforms and work closely with the new project technical assistance team to obtain timely results.