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Although many researchers have claimed that the Middle East faces a desperate situation with regard to future water use, few have provided detailed analyses as to why this should be the case. In this paper it is claimed that with the changing nature of the economies of the countries of the region, together with rapid population growth, new water policies are required which recognize the growing significance of the service sector of the economy and the importance of urban communities. These policies should focus on the importance of commercial/industrial systems as the main wealth providers in the 21st century. Detailed analyses of the available water resources reveal that most of the countries of the Middle East will be able to meet the water needs of their citizens up to 2025 without too much difficulty. To achieve this the reallocation of at least some irrigation water to other uses will be necessary. However, the volumes of water needed are in many cases not huge. Three countries, Jordan, Oman and Tunisia, will experience major problems of water supply, but only Jordan can be regarded as approaching a crisis situation. Even here desalinated water could at least alleviate the situation for urban dwellers, though costs would be high. [ABSTRACT FROM AUTHOR]