RESUMO
This research measures the impact of water scarcity on agricultural economic development and economic development indicators in the Kingdom of Saudi Arabia during 1995-2018. By examining the current status of available water resources and their uses, and estimating a model to study the impact of water scarcity on agricultural economic development. The study relied on descriptive and standard economic analysis to estimate the proposed regression model. It found that a 10% change in the amount of water resources available leads to a 5.1% change in the same direction of the crop area. A 10% change in the estimated crop area results in a 1.5% change in the same direction of the total agricultural output value. A 10% change in employment and agricultural loans leads to a change in the same direction of the aggregate agricultural output value of 5.1% and 7.2%, respectively. A 10% change in the total value of the estimated agricultural output leads to a 2.9% change in the same direction of GDP. Thus, a lack of water resources will decrease the crop area and have a negative impact on the value of agricultural output, thereby impacting GDP. We therefore include policy recommendations for the conservation of water resources: The government should stop the export of virtual water, particularly for water-depleting products; an economic accounting framework for water should be introduced to monitor the amount of water in excess of the water codification for various crops prevailing in the crop composition.
