18 tables, 4 fig., 1 map, 32 ref.; IIMI research report 19 IIMI, POB 2075 Colombo - Sri Lanka. E-mail: r.desilva@cgnet.com

It is widely recognized that many countries are entering an era of severe water shortage. IIMI has a long-term research program to determine the extent and depth of this problem, its consequences to individual countries, and what can be done about it. This study is the first step in that program. As the study progressed there were increasingly severe data problems and conceptual and methodological issues in this field. Therefore a simulation model was created that is based on a conceptual and methodological structure that is believed valid and on various estimates and assumptions about key parameters when data are either missing or subject to a high degree of error and misinterpretation. Part 1 of the report describes the water balance approach which provides the conceptual framework for this study. The water balance framework is used to derive estimates of water supply and demand for countries. These estmates are adjusted to take explicit account of return flows and water recycling whose importance is often neglected in studies of water scarcity. Part II presents the data for the spreadsheet model of water supply and demand for 118 countries that include 93 percent of the world's 1990 population. Following a discussion of the 1990 data, two scenarios of world water supply and demand are presented. Part III presents two basic criteria of water scarcity that together comprise the overall IIMI indicator of water scarcity for countries

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