Near east and North Africa

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Economic and agricultural performance in 1994-95

The conclusion of the Peace Treaty between Israel, the Palestine Liberation Organization (PLO) and Jordan and the ongoing peace negotiations have ushered in a wave of cautious optimism in the Near East and North Africa region. These events are improving the prospects for expanding trade, investment and tourism and for reducing military spending in the region. It is recognized, however, that the greatest peace dividends will be achieved by those countries that have reduced their macroeconomic imbalances through sound economic and financial policies.

Depressed oil prices, combined with a weak dollar and rises in non-oil commodity prices, have seriously hit the region's economies, particularly those of the major fuel exporters. During 1994, oil prices reached their lowest levels in real terms since 1973 and prospects for a significant strengthening in prices do not appear encouraging, at least in the short term. These problems have compelled economic reforms to focus on improving economic efficiency and reducing external debt and fiscal and current account deficits.

The more diversified economies in the region, including those of Egypt, Jordan, Morocco and Tunisia, continued their economic reform programmes with varying success. In Egypt, the macroeconomic environment stabilized as the fiscal deficit was further reduced and inflation better controlled, but growth remains modest. Both Morocco and Tunisia, countries at relatively advanced stages of adjustment, recorded growth rates of around 4 percent. The end of a two-year drought in Morocco had positive impacts on the country's overall economic performance.

In the Syrian Arab Republic, weakened consumer demand and reduced financial in-flows contributed to less buoyant economic activity with GDP growth in 1994 declining to 7 percent from a high of 11 percent the previous year. Turkey faced sluggish economic growth in a context of high inflation, deteriorating fiscal and external deficits and depreciation of the currency. These problems led to the adoption of a stabilization programme in mid-1994.

Figure 9

The region's agricultural performance continued to be characterized by pronounced variations over time and among individual countries. Overall, the region's agricultural production increased by 3.3 percent in 1992, 1.5 percent in 1993 and an estimated 1 percent in 1994. High rates of population growth largely outpaced increases in food production in both 1993 and 1994, resulting in reduced levels of per caput food production.

Cereal production has averaged about 91 million tonnes over the past three years (1992 to 1994),11 percent higher than the previous three-year period, despite a production shortfall in 1994. Poor rains resulted in reduced wheat production in Algeria, Tunisia and Turkey - the decline in the latter being 18 percent but the overall fall in these countries was partly compensated by a record wheat crop in Morocco (5.5 million tonnes) which came at the end of a severe two-year drought.

As regards recent policy developments, in Algeria the transformation of state-owned farms to private farms is changing the historical structure of production in the agricultural sector and improving the efficiency and competitiveness of farm activities. In a major policy shift in April 1994, agricultural policies were liberalized through a reduction in the producer price support for cereals, pulses and other selected crops; higher interest rates; and a reduction in direct and indirect input subsidies.

In Egypt, wide-ranging reforms in the agricultural sector have focused on improving resource use and the efficiency of farming activities. Over the past several years, the government has liberalized production and marketing activities of inputs and of most crops. Virtually all subsidies to fertilizers, seeds, feed and pesticides have been eliminated. In 1994, cotton marketing was further liberalized through the opening of a cotton exchange in Alexandria. In 1994, traders were able to purchase cottonseed directly from farms and cooperatives for the first time in more than 30 years.

Egypt's wheat production did decline in 1994, however, after three years of impressive growth. The production decline is attributed to the reduced amounts of irrigated water that resulted from the long winter closure of the High Dam. Waterflows to irrigators are being reduced in an effort to increase overall water supply to newly reclaimed lands. Cotton exports were valued at US$220 million for the one-year period between August 1993 and July 1994, compared with $90 million the previous year.

The Sudan has embarked on a series of economic policy reforms including floating the Sudanese pound and removing some subsidies on basic goods. Facing severe budgetary constraints and reduced food aid, policy-makers are pursuing a strategy of self-sufficiency in wheat production. The country's cereal production is estimated to have increased by about 55 percent in 1994, drastically reducing import needs. Current government policies are aimed at increasing yields through extension packages that promote the adoption of new technologies. Although recent studies have indicated that new wheat technologies could generate net economic gains exceeding those of cotton, their dissemination among farmers is still low.

In Saudi Arabia, the 1994 wheat harvest is expected to be 2.5 million tonnes, down from 3.6 million tonnes in 1993, reflecting further policy measures aimed at limiting excess production. Strict quotas on government wheat purchases from small farmers are helping to reduce production and reach the policy goal of matching wheat production to consumption levels.

Resource use and prospects for agricultural expansion

Although the agricultural potential varies widely among countries, the region's agricultural resource base in general is subject to a number of common, limiting constraints. FAO's 1994 Regional Conference for the Near East (NERC) highlighted the many difficult agricultural production issues facing producers in this region of arid and semi-arid lands. The most pressing constraint is the low and erratic rainfall which severely limits food crop production. Year-to-year variability in crop production is higher in the Near East and North Africa than in any other developing region. For example, the coefficient of variation of cereal production has been over 50 percent in Jordan, Mauritania and Saudi Arabia, while for another ten countries of the region it has been over 25 percent.

Fragmented landholdings and the lack, in rural areas, of adequate physical and institutional structures, such as transport, communication, research and extension and marketing infrastructure, are additional constraints in many countries. Another factor that inhibits faster growth and is a threat to sustainable food production is the serious degradation of natural resources including soil erosion, desertification, waterlogging and salinity. The slow growth in food production has also been accentuated by the long-standing political instability between and/or within countries and by social tensions.

In spite of resource constraints and often adverse climatic conditions, untapped potential exists. FAO projects that food output could increase by almost one-third over the 20-year period from 1990 to 2010.47 As in the past, however, growth in production would be concentrated in a few countries Egypt, the Islamic Republic of Iran, Morocco and Turkey.

About 70 percent of the projected increase in cereal production over the period would be attributable to yield improvement. This picture runs across the subregions with no significant variations between them, except in the Arabian Peninsula, where Saudi Arabia has already reached average yields of more than 5 tonnes per hectare.

The scope for yield improvement reflects the wide intercountry yield differential that exists at present, with most countries having yields well below those achieved by the better performers. Although many factors are involved, the achievements of the better performers suggest that even with the existing technology of high-yielding varieties, there is still wide scope for increasing yields through effective economic policies, improved land and water management, the appropriate use of modern inputs, good cultural practices and further adaptive research.

The FAO Regional Conference for the Near East also discussed the potential for changes in national cropping patterns through the introduction of new crops such as soybean and sunflower. Countries such as Egypt, the Persian Gulf states, Jordan, the Libyan Arab Jamahiriya and Morocco have already made remarkable advances in controlled environment (or greenhouse) farming of horticultural products for domestic consumption and the export market. Besides generating foreign exchange and seasonal employment opportunities, these farming systems are noted for high productivity, better control over the use of agricultural chemicals and improved water efficiency.

Increases in livestock numbers are expected to contribute 35 percent of the growth in meat production over the coming two decades. To raise production in this manner the feed resource base must be enlarged by intensifying range and pasture utilization and using more feed concentrates and agricultural byproducts. Striking a sustainable balance between livestock numbers and the availability of forage and feed is of paramount importance for conserving the natural environment and maintaining livestock production systems in the semi-arid conditions of the region. In some countries in the region, such as Egypt and countries in the West Asia subregion, the potential to expand grazing areas is limited so higher yield per animal is an increasingly important source of growth.

Food consumption and food security

Consumption of food in the region as a whole has been rising rapidly over the last two decades and is projected to continue rising for the foreseeable future. The expected increase in food consumption is the result of a number of factors. Annual population growth rates are among the highest in the world; those registered for the 1970s and 1980s were 2.7 and 3.1 percent respectively, and those expected in the 1990s and from 2000 to 2010 are 2.7 and 2.3 percent. In addition, there is rapid urbanization in the region, with the urban population increasing fourfold from 57 million in 1960 to 210 million in 1990. The urban population has increased from 30 percent of the total population in the early 1960s to 55 percent in 1993. Urbanization implies that most rural migrants, from being net food producers, become net food consumers, while the generally higher levels of income in the urban centres contribute to increasing food demand, as well as to changing the composition of diets.

Overall, in terms of per caput daily dietary energy supplies (DES), the region had an average of 2 898 kilocalories in 1990-92, the highest among developing country regions. FAO estimates put the incidence of chronic undernutrition in the region at 13 percent of the total population, the same level as that of Latin America and the Caribbean, compared with 20 percent for the developing countries as a whole. This comparatively low undernutrition percentage is largely the result of high food availability, but in absolute numbers it corresponds to about 60 million people. Looking into the future, the incidence of chronic undernutrition is expected to decline further to 9 percent by the year 2010. However, because of the population increase, this 9 percent will correspond to the same total number of people as were undernourished in 1988-90.

Despite this positive outlook at the aggregate, the low-income countries of the region would continue to experience serious food security problems. In 1988-90 the lower-income countries (Djibouti, Mauritania, Somalia, the Sudan and Yemen) had an average food consumption level ranging between 1 764 and 2 447 kilocalories per caput per day, which was well below the average of the region and that of the developing countries as a whole.

Food import dependence

The region depends heavily on imports to meet its food needs. Cereal imports increased from 8.1 million tonnes in 1969-71 to 44.3 million tonnes by 1988-90 and are projected to reach 78.7 million tonnes by the year 2010. Wheat is the largest single cereal commodity imported. Wheat imports of 6.6 million tonnes in 196971 (representing 82 percent of cereal imports) increased to 29 million tonnes in 1988-90 and may reach 44 million tonnes by the year 2010. Imports of rice constituted 8 percent of cereal imports, increased from 0.7 million tonnes in 1969-71 to 3.1 million tonnes in 1988-90 and may increase by another 2 million tonnes by the year 2010. Coarse grain imports increased much more quickly than wheat or rice imports, reflecting the rising feed requirements for the expanding livestock sector. Between 1969-71 and 1988-90, coarse grain imports increased 13-fold to 13.3 million tonnes and are projected to reach 20.3 million tonnes by the year 2010.

Imports of other food items, such as livestock products, vegetable oils and sugar, have also grown substantially. Between 1969-71 and 1988-90 meat imports increased ninefold from 121 000 to 1.12 million tonnes and may reach 1.9 million tonnes by 2010; imports of milk increased fivefold from 1.2 million to 6.1 million tonnes and may double to reach 1:3 million tonnes in 2010. The self-sufficiency ratio of livestock products declined substantially from 99 to 86 percent between 1969-71 and 1988-90 and is projected to fall further in the future. A large portion of livestock products imports is accounted for by the high-income oil-producing countries. For example, the value of imports of livestock products in the Arabian Peninsula increased from 16 percent of the total value of livestock products imported into the region in 1969-71 to 27 percent in 1988-90.

A consequence of these large increases in volume of imported foodstuffs is a sharp rise in the foreign exchange expenditures on food imports. The value of total food imports into the region increased more than fourfold from about US$3.6 billion in 1969-71 to about $16.6 billion in 1988-90.49 Cereals remain the major item of foreign exchange expenditure among the imported foods, accounting for more than 35 percent of the total value of food imports. The import value of livestock products recorded an exceptionally large increase of about 600 percent from US$566 million in 1969-71 to $3.5 billion in 1988-90. The projected large increases in food imports may not constrain the oil-producing countries, but would certainly aggravate the balance of payment difficulties of other countries in the region, especially the low-income food-deficit countries. Indeed, food imports for the region as a whole amount to some 10-12 percent of merchandise exports. However, low-income countries in the region spent a consistently high share (over 25 percent) of their merchandise export earnings on food imports.


The effects of trade liberalization on the economies of the region may be negative in the short term. The region is heavily dependent on food imports, so the reduction in subsidies on European agricultural goods (which could amount to as much as 75 percent of the cost of production) is expected to cause greater budgetary outlays on imported food. In 1993, the region imported US$26.4 billion worth of agricultural products and exported only $8.8 billion.

The erosion of preferential trade agreements that favour countries in the region is expected to increase costs in terms of resources being diverted to make agricultural products from the region more competitive with the high-quality produce of the industrialized economies. At present, the EC absorbs 11 percent of the exports of fresh fruits and vegetables of the Maghreb countries. Egypt, Jordan, Lebanon and the Syrian Arab Republic have most favoured nation trade and economic agreements with the EC. The granting of concessions, such as the high entry prices and maximum tariff equivalent granted to the Eastern European economies, will have an adverse impact on the extent of exports from the region.


The role of agriculture

Jordan is a small country, with limited natural resources, especially water. Agriculture contributes around 7 percent of GDP. However, if backward and forward linkages are added, the sector's contribution is estimated to be as high as around one-third. In addition, it employs about 7 percent of the total labour force. Growth in the agricultural sector has been impressive, at an average of 12.5 percent during 1987 to 1991, although this figure dropped to 6.2 percent in the period 1991 -93. Despite generally strong growth, agricultural production has been unable to meet domestic consumption needs. With rising standards of living and a population growth rate of 3.4 percent, the demand for food in Jordan has increased rapidly in the last four decades. In 1989, Jordan's food imports bill amounted to US$252.4 million; by 1993, it had increased by more than 87 percent, to $471.3 million.

About 96 percent of Jordan's land receives less than 300 mm of rainfall annually. Most of the cultivable land lies in the highlands, except for 390 000 dunums (39 000 hectares) in the Jordan Valley and the Southern Ghor, which account for 50 percent of the irrigated area of Jordan. The irrigated area in the Jordan Valley represents only 15 percent of the country's cultivated land, but its average share in agricultural production is around 65 percent of vegetables, 60 percent of fruits and 10 percent of field crops.

The major vegetable products, including tomatoes, eggplants, squash, cucumbers, cabbages, cauliflowers and potatoes, are produced for export markets in Saudi Arabia and the other Persian Gulf states and, to a lesser extent, to European countries during the winter. Over the years, the area under fruit trees, mainly olives, has increased whereas the area under major vegetables, other than potatoes and watermelons, has declined. Wheat and barley are irrigated in the desert south of the Jordan Valley and occasionally in the valley itself, as part of a crop rotation.

The sectoral output improved significantly over the last two decades as a result of the wide use of irrigation, modern technological farming systems and increased capital investment. Public and private investment increased the irrigated area by more than 200 percent over the last 20 years. To a great extent, the expansion of irrigated agriculture compensated for the shrinking per caput area of cultivated land and reduced the risks associated with rain-fed agriculture.

Investment in horticulture in the rain-fed areas and a shift in the cropping pattern from traditional wheat to barley and fruit-trees have led to a 20 percent annual growth in the value of rain-fed agricultural production. The major increase, which has been in fruit-trees and vine crops, is attributable in part to a government support programme implemented in the highlands. The programme provides farmers with subsidized fruit-tree seedlings, food supplies and materials for terracing.

Rangelands, which constitute about 90 percent of Jordan's total agricultural area, are used mainly for keeping sheep and other livestock. The rapid increase in demand for meat and livestock products in the last decade has encouraged barley production, leading to expansion into marginal and submarginal land.

Issues and challenges

Resource conservation. Over the last four decades, Jordan has witnessed an increasing demand for water and land resources caused by population pressure and growing numbers of urban and industrial users. These factors are negatively affecting the country's capacity to produce food.

Rapid investment in irrigation in the Jordan Valley and the highlands during the 1970s and 1980s resulted in a strong increase in agricultural production. The agricultural sector accounts for approximately three-quarters of water consumption. However, high subsidies on water in the Jordan Valley have contributed to increased and inefficient use.

Until recently, the cost of supplying irrigation water to the Jordan Valley Authority, including operation and maintenance costs, was 23 fils per m (1 000 fils = 1 diner), but it was sold to the farmers at only 6 fils per m. At the same time, the long-term marginal cost of water was estimated to be 230 fils per m. The subsidies on water, along with an overall restricted trade environment, resulted in a high rate of effective protection that distorted resource use. For example, the production of bananas (which consume a lot of water) increased by 400 percent between 1982 and 1992. Under the recent structural adjustment programme, the government is introducing graduated tariffs on water.

There is a need for water to be transferred from the Jordan Valley to the highlands using the existing pipeline to its full capacity and utilizing the present water supply more efficiently between and among the different user-sectors. Water can be saved by improving on-farm irrigation management. One option is to convert the surface irrigation systems into pressurized water delivery. This would require investments in extension and training on the new system's maintenance and use.

Groundwater in Jordan is also being depleted at an unsustainable rate. Unless the present rate of depletion is reduced, groundwater is estimated to last for only another 39 years. To address the problem, the government has created "basin protection units" that are expected to establish greater controls and larger levies on the use of groundwater by industry, and to stop the groundwater supply from being put to inappropriate uses. A classic example of resource mismanagement is the subsidizing of wheat production that uses water from the non-renewable Disi aquifers. The same water could be allocated to much higher-value uses.

Past policies have contributed greatly to overstocking and overgrazing, which have been major causes of widespread rangeland degradation and serious threats to the natural pastures of the steppe lands. The absence of a regulatory framework for user rights coupled with the subsidizing of inputs in the livestock sector, although benefiting producers, have also contributed to natural resource degradation. Sustainable environmental considerations require policies to arrest- and indeed reverse - the desertification process.

Food policy. Since the late 1960s, a primary objective of the agricultural policy in Jordan has been to achieve self-sufficiency in strategic crops. At the same time, prices of basic food items have been controlled in a bid to keep the cost of living down. The two, often conflicting, objectives led to a mix of interventionist polices that, in some cases, resulted in an inefficient use of resources and an increase in food imports. The regulatory regime included policies for: subsidizing producer prices, especially for wheat and barley; low water prices in the Jordan Valley; subsidizing agricultural credit; a regulated cropping pattern in the irrigated areas; and specific subsidies to encourage the planting of fruit-trees.

The granting of subsidies contributed to a rapid growth in the production of fruit and vegetables, allowing Jordan to meet domestic requirements and export a surplus. However, input and output subsidies and trade restrictions resulted in a high rate of effective protection for certain commodities and, consequently, to resource misuse. The subsidies on barley encouraged its use as livestock feed and increased the viability of goat and sheep production, which increased fourfold since 1962, putting pressure on rangelands. As a result, between 1981 and 1992, the area under wheat declined by one-third whereas that for barley increased by over two-fifths. Greater producer profitability for fruits, especially with increasing opportunities for supplementary irrigation from groundwater development and water harvesting, has caused land previously under wheat to be used for the cultivation of fruit. This has had an adverse impact on food self-sufficiency in wheat.

The Ministry of Supply (MOS) is the sole importer for many basic goods such as wheat, wheat-flour, rice, sugar and milk powder. Until 1993, the government was the sole importer of apples, onions, potatoes and garlic. Monopolies on procurement and distribution enabled the government to control the subsidies provided to producers and consumers and to encourage domestic production by protecting the local producers from foreign competition.

Whereas output subsidies are being gradually reduced or eliminated as part of the recent economic reform programme, consumer subsidies have been maintained. Retail prices are subsidized for wheat-flour, lentils, chickpeas and barley. The nominal protection coefficient (NPC) at the retail level for wheat-flour sold to bakeries in 1994 was 2.9 indicating that the domestic price level was one-third that of the international price.

The future challenge in Jordan's agriculture is to regain sustainable growth through the adoption of outward-looking policies and productivity increases brought about by the efficient use of land and water resources. Many of the problems in the agricultural sector stem from the lack of a systemic land and water policy. At present, the lack of attention to demand management practices is compounded by a proliferation of competing public institutions in agriculture. These institutions need to be brought together within the umbrella of an holistic agricultural sector strategy that focuses especially on land and water issues.

Policy reforms

Since the mid-1980s Jordan has faced economic difficulties. The decline in the price of oil led to a steep decline in workers' remittances and in foreign assistance from the Persian Gulf countries. A concomitant rise in foreign debt and interest payments compounded the difficulties faced by Jordan during the global recessionary period of the 1980s. By the end of the decade, the problems of declining growth rates, inflation and mounting external indebtedness needed to be addressed.

In 1989, the government requested a rescheduling of its debt and adopted a structural adjustment programme (SAP) supported by IMF and the World Bank. The SAP included a comprehensive economic reform programme to remove macroeconomic imbalances, minimize sector distortions and re-establish economic growth. The Jordanian diner was devalued in 1989 and, as a result of the economic reform, policies were undertaken to decontrol agriculture, food and industrial prices; restructure tariff and trade policies; deregulate interest rates; remove consumer subsidies; and provide further incentives to the private sector in a move towards restoring the efficiency of the economy.

The conflict in the Persian Gulf adversely affected the newly undertaken reform programme and imposed a serious burden on the Jordanian economy caused by the loss of agricultural export markets in the Persian Gulf states and the return of more than 300 000 Jordanian migrant workers. Nevertheless, the economic reform programme was successful in meeting the macroeconomic targets. After registering negative and declining rates of growth in the late 1980s, the economy rebounded with a rate of output growth of 5.8 percent in 1993. The strict control over government expenditures accompanied by a strong revenue performance in 1993 resulted in a decline in the budget

As part of the ongoing reform, the government adopted an agricultural sector adjustment programme to improve efficiency, equity and sustainability. A major focus of agricultural reform is on removing subsidies in order to establish a market-oriented and competitive sector based on principles of sustainable natural resource use. Correction in relative agricultural commodity prices and greater private-sector involvement are expected to contribute to improving the rural incomes and sustainable development of agriculture in the long term.

In the area of water policy the government is focusing on rational allocation and use of water. Initiatives include the development of management plans for surface irrigation systems in the Jordan Valley and for groundwater basins (e.g. full utilization of the existing Deir Allah pumping scheme and conservation of the Disi fossil aquifers); modernizing and upgrading surface and groundwater monitoring systems; protecting water resources from pollution; managing groundwater to ensure sustainable yields for renewable aquifers; adopting a progressive pricing system to secure the financial viability of water delivery agencies; and establishing a strong institutional framework for the implementation of water management policies. In 1994, a bill was presented to parliament reflecting progressive water tariffs.

Producer subsidies are being removed on all crops. The 1994/95 prices for wheat and barley, both of which were until recently subsidized, indicate a zero subsidy. The government plans to liberalize trade in barley and to phase out public-sector involvement.

In a bid to remove consumer subsidies, prices were decontrolled for certain food items. In 1994 the government removed price controls on chickpeas to be followed by removal of controls on the prices and margins of the major fresh and processed agricultural commodities. All controls on retail price margins of fresh fruit and vegetables were to go, as were price controls on frozen poultry, chilled meat, tomato paste and lentils and controls on the retail prices of fresh poultry, red meat, table eggs and fresh milk.

A trade liberalization programme was launched to remove the public monopoly on trade, including marketing and distribution of agricultural commodities. The government has removed the Agricultural

Marketing and Processing Company's (AMPCO) import monopoly of potatoes, apples, onions and garlic. It has also removed import and export licence requirements on many fresh and processed agricultural products. The weighted average tariff rate was reduced from 34.4 percent in 1987 to 25 percent in 1992. Another significant step towards a more liberalized regime is Jordan's planned entry to the World Trade Organization (WTO). Joining WTO will imply further adjustments in the trade regime including the removal of non-tariff barriers and the government monopoly on import of other food products and the promotion of agricultural production and trade according to the principles of comparative advantage.

The impact of peace on water resources and agricultural production

One result of the peace treaty with Israel is expected to be the additional flow of water into Jordan from the Yarmouk and Jordan Rivers. This would have a positive impact on the country's current and future water balance and would contribute towards agricultural development.

As a result of the treaty, available water resources in Jordan are expected to increase by 230 million m; annually, a 25 percent addition to the country's present supply of water, which would increase the per caput availability by 63 m per annum. A rapid rise in the standards of living and population growth has exerted a tremendous pressure on the limited water resources of Jordan in the past. In 1993, the domestic water supplied, amounting to 205 million m, was consumed by 3.7 million inhabitants. Currently, Jordan's average per caput domestic water consumption, at about 85 litres per day (I/c/d), is considered a bare minimum, given the country's per caput income and overall development level. Of the additional 230 million m:; of water, 70 million m are expected to be diverted to meet the shortfall in the domestic sector, to which the government attaches a high priority.

The increase in the per caput share of water from the current 85 1/c/d to 120 1/c/d is expected to reduce the concentration of waste products and, consequently, the treatment and conveyance cost of waste water by 30 percent. Increasing the quantity of irrigation water diverted to the King Abdullah Canal from the Yarmouk

River and fully utilizing the irrigation infrastructure are expected to lead to improvements in the quality of treated waste water, thus reducing the cost per m of irrigation water in the Jordan Valley by 40 percent.

Furthermore, improving the quality of the Jordan River water is expected to have a significant environmental impact on the region. At one time the river was rich with several types of fish, which supplied the local population with food and was a natural home to migrant birds and other wild life.

The peace agreement is expected to widen opportunities for economic resource and information integration between the signatories and to contribute towards greater development of the agricultural sector in line with principles of comparative advantage. Freedom of agriculture information exchange, the transfer of expertise on the possibilities of desert cultivation and utilization and the use of saline water with new kinds of seeds for desert cultivation are expected to be the dominant factors in regional agricultural cooperation.

Trilateral cooperation in desert agricultural activities among Israel, Egypt and Morocco has been taking place for some time. A pioneer project was initiated in the Egyptian and Moroccan deserts implementing Israeli expertise in the utilization of new brands of seeds and irrigation techniques. In the recently held Casablanca Summit in Morocco, a joint Jordanian-lsraeli project under discussion was the integrated development of the Jordan Rift Valley. This project proposes to exploit the difference in natural elevation between the Red Sea and the Dead Sea by building a canal between them and generating hydroelectric power while also using Red Sea water for desalinization projects and for the ecological protection of the declining level of the Dead Sea.

Although the treaty has helped to alleviate Jordan's water supply problems by outlining proposals and initiating cooperation, it is imperative that these proposals he carried forward in the interest of development in the region. Regional cooperation will mean eliminating disparities in national income and in the acquisition of advanced technology. Investment in research and development in demand management and water conservation techniques and tools will come about if efforts are made towards greater regional cooperation and integration. At the same time, Jordan will be able to benefit most from this benign economic climate if domestic economic policies are conducive to providing macroeconomic stability and growth and contribute to a more efficient utilization of scarce resources in the agricultural sector.

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