The Aral Sea Basin is considered a disaster zone by many. Demands on the watershed for irrigation and other purposes have overdrawn water resources. By 1991 almost all river water was being diverted for irrigation and the sea had lost half its area. What flowed in was salt-laden, gradually killing most fish. Wetlands dried up in river deltas. Game, birds, and other wildlife have become rarer. Windstorms carrying sand and dried salt into the air have increased in frequency and severity. The impact on local communities and economies has been severe, bringing widespread unemployment and poverty as fisheries, game habitat, pastures, and agricultural land have lost productivity. Public water supplies have become unreliable and unsafe due to bacterial contamination. The high incidence of other diseases has led to speculation on environmental causes. Land upstream of the lake has been damaged from excess water withdrawals, leading to flooding and salinization of the land. If trends continue, most agricultural land in these river basins will be unfit for agriculture within a few decades. Governments in the region recognize that the causes of these problems are a policy framework that treats environmental goods and services as free goods, a deficient infrastructure in the water sector, and lack of regional coordination on both problems. They have acknowledged the need for a sustainable development strategy but have responded differently to this challenge. These countries require substantial financial support to ensure their capacity to address the basin's problems and stay on a course toward sustainable development. This project will be implemented by the restructured Interstate Fund for the Aral Sea (IFAS), whose capabilities have been built through a number of grants from other donors. The project will address the causes of overuse and pollution in the Aral Sea Basin and support the sustainable management and future development of its natural resources by implementing the first stage of a regional strategic action plan. This project constitutes only the first step to addressing the root causes of the Aral Sea Basin crisis