ABSTRACT
A summary of the problems causing the water shortage in Ta’iz points clearly to the need for an integrated holistic approach to water resources management. The history of the shortage so far necessarily ends with the completion of fieldwork in the Upper Rasyan Catchment in 1998. Economic diversity towards allocatively more efficient uses of water provides the capacity to afford grain imports. In the debate over whether to produce cash crops or industrial output with the little water available the deciding factor in an economist inspired world is the relative returns to water. The reallocation of water has been feasible on a small scale through water markets but transfers from rural areas to meet the growing urban demand by government has met with armed conflict and produced significant environmental impact. The people of Ta’iz receive less water from the public utility than the World Health Organization (WHO) guideline and that water is of poorer quality than the WHO recommended minimum.
