The amount of available water per person in the Middle East and North Africa (Mena) is set to halve by 2050 as the region's population rises and industrial growth continues at a rapid rate.
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The dire prediction came in a report by the consulting firm Frost & Sullivan (F&S).
"There has to be more private sector participation," said an environmental analyst at F&S, which has a policy of not naming its employees.
"The government has to play a major role in creating policies for private participation," the analyst said.
With many water municipalities around the region failing to recover their costs in producing and supplying water, F&S says more efficient private sector operations have to be put in place to help grow the industry.
"They have to combat the lack of skilled manpower, high costs of water treatment, poor water distribution and inefficient water management," the report said.
In each economy in the Mena region, it is estimated this shortage of skills costs 1 to 3 per cent of GDP.
"This is the cost and a problem across all the countries," said the F&S analyst.
"If 100 per cent of the costs are to be recovered, consumers need to be paying more than their current bills. But this is not likely to happen in the immediate future as it requires policy and institutional reforms."
Although investment is being made in water infrastructure, particularly in the UAE, more needs to be done to close the growing gap between demand and supply.
Investment by Mena countries totalled US$9 billion (Dh33.05bn) last year, which is expected to grow to $18.85bn by 2015, according to F&S.
Diversification away from the oil industry in countries around the region has led to rapid growth in other water-heavy sectors, such as agriculture. Despite the high level of imported food in the region, agriculture makes up 78 per cent of total water consumption.
The average water availability per person is close to 7,000 cubic metres each year around the world, but in the Mena region, it is just 1,200 cu metres.
Although the availability of water is scarce, those using the water have a higher usage per person than the global average.
"With the population expected to grow from nearly 300 million in 2008 to almost 500 million in 2025, the already dismal per capita availability of water is expected to halve by 2050," the F&S report said.
It added an industrial growth rate of between 10 and 12 per cent will exacerbate this trend.
