The proper management of water resources plays a key role in the socioeconomic
development of Armenia. On average, Armenia has sufficient water
resources. Taking into account all available water resources in the country,
Armenia has sufficient resources to supply approximately 3,100 cubic meters
per capita per year—well above the typically cited Falkenmark water stress indicator
of 1,700 cubic meters per capita per year. These water resources are not
evenly divided in space and time with significant seasonal and annual variability
in river runoff. In order to address temporal variations in river runoff, the country
has built 87 dams with a total capacity of 1.4 billion cubic meters. Most of these
dams are single purpose, mainly for irrigation. Armenia also has considerable
groundwater resources, which play an important role in the overall water balance.
About 96 percent of the water used for drinking purposes and about
40 percent of water abstracted in the country comes from groundwater. Irrigation
remains the largest consumptive user (figure O.1).
Agriculture in Armenia is heavily dependent on irrigation. More than 80 percent
of the gross crop output is produced on irrigated lands. Returns are higher
on irrigated lands. Water user associations play an important role in agricultural
water management. Currently, there are 42 water user associations responsible
for about 195,000 hectares (out of a total of 208,000 hectares of irrigable lands
in Armenia). Since water user associations became operational, water supply has
improved, the collection of water fees has increased, and there is an increasing
conversion from low-value crops (e.g., wheat) to higher value crops (e.g., fruits
and vegetables) (table O.1). However, water user associations are not yet financially
sustainable and continue to depend on State subsidies. Finally, agricultural
water management is still subject to various inefficiencies. This includes the
widespread use of high-lift pump irrigation systems built during Soviet times but
are now uneconomical due to high energy costs.
Domestic water consumption, which used to be the second-largest water user
after irrigation, sharply decreased in the 1990s (figure O.2). This dramatic drop is
attributed to the introduction of water metering and a volumetric billing system.