Over the past 15 years, water management issues have come to the fore in economic policy discussions. Over-exploitation of water and harmful environmental effects have become major concerns, while water is not used efficiently, particularly in rural areas. Water extraction levels that are ecologically sustainable have been breached in a number of regions. Guaranteeing water security and diversifying supply for the major urban areas has become a major policy challenge. Difficulties are likely to grow because demand will rise further, while climate change is likely to further reduce available water resources. The authorities have recently stepped up reforms aimed at remedying over-exploitation, stopping wastage caused by deficient water delivery systems and directing water use towards the most productive activities. This chapter reviews the challenges posed by water management, assesses the policies to meet them and suggests ways to make them more effective.