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Access to fresh water resources is a limiting factor in the socio-economical development of countries located in semi-arid regions. Water scarcity in these regions, particularly the North Africa and Middle East (MENA) region, is expected to intensify not only due to projected decline in effective precipitation due to climate change and variability, but also due to excessive growth in demand driven by explosive growth in population and improvement in living standards. The meager surface water resources in these regions have already been exploited and significantly polluted leading many governments to deplete their fossil and poorly recharged aquifers mostly to support inefficient and unsustainable agricultural policies and heavy subsidy of municipal water demand.

The paper presents an interactive decision support model developed based on economic principles and simple aquifer representation using the STELLA system dynamics development environment. The model is designed to help water policy makers and managers and other stakeholders formulate and assess alternative water allocation policies among the municipal, industrial and agriculture sectors. Model users will be able to set and interactively manipulate key parameters that influence economic values and sustainability of alternative water policies. These parameters are associated with energy prices, discount rates, planning horizon, demographic factors, willingness-to-pay, hydro-meteorological conditions, aquifer characteristics, and industrial water productivities cropping patterns and agricultural water productivities. Long-term projections of economic value, withdrawals, and remaining water stocks in addition to water demand are presented in tabular and graphical forms.

The paper presents a case application of the model for managing the Amman-Zarqa aquifer in Jordan. The aquifer is considered a crucial water resource in water poor Jordan.