Many governments still rely on the construction of conventional dams and large diversion projects to relieve regional water stress and water shortage. However, such projects, with their engineering complexities, threats of ecological disruption, multibillion-dollar price tags, and long lead times, do not offer much hope that water will be delivered in time and at reasonable cost. In the developing world, unless deforestation and erosion are stopped and irrigation systems better managed, large projects may waste capital, undermine the productivity of the soil and also displace the indigenous population. Furthermore, even the most ambitious schemes will not definitively solve regional water problems. The best any dam or diversion project can do is to slow down the depletion of supplies or delay the occurrence of shortages. In such cases, it would be much less costly to encourage the growth of human settlements in places where adequate water supplies are available or effectively reduce water demand through demand management.