Nearly all of the easily available sources of water in most countries of Asia and the Pacific have already been developed, or are in the process of development, and therefore the unit cost of future projects can only increase. While the amount of fresh water available to any country on a long-term basis is limited, the demand for water is also steadily increasing. Therefore, although supply development may still be required for some countries, water conservation through demand management is generally becoming a necessity in others. Demand management has become a very important practice in developing countries, particularly in those with limited water resources, as it enables them to meet their growing water demands by conservation and minimizing wastage, rather than by developing expensive new sources of water supply.

Demand management is achieved through application of a combination of economic and non-economic measures, most prominent among them being water pricing. In recognition of the importance of water pricing as a tool for effective water demand management, during 1995-1996 the ESCAP secretariat has implemented a project on Establishment of Water Pricing Policies and Structures for Sustainable Water Demand Management, with funding from the Government of Japan.

The project consisted of two phases: Phase I, to conduct systematic field surveys, data collection and analysis of water pricing policies and structures to be discussed at an expert group meeting; Phase II, to draft a set of appropriate guidelines for the establishment of water pricing policies for irrigation water supply, and to adopted these policies and structures at subsequent workshops.

During Phase I, an Expert Group Meeting to Review and Analyse Water Pricing Policies and Structures in the ESCAP Region was held in Bangkok from 12-16 February 1996, which reviewed the status of water pricing policies and structures in the region, and formulated the general content of draft guidelines.