Your investments: Succot and investing in water

With the Kinneret at alarmingly low levels, there are regular calls for conservation as well as increases in water-usage taxes.

By AARON KATSMAN
As Succot takes center stage, we turn our focus to water. Those of us who come from Western nations tend to take water for granted. You turn on the faucet and voila! – you have a steady stream of water. The Mishna in Tractate Rosh Hashana says the world is judged four times during the year: One of those times is on Succot, when we are judged for water.
Live a few years in Israel and you can appreciate that whatever water we receive is a gift from Above. With the Kinneret at alarmingly low levels, there are regular calls for conservation as well as increases in water-usage taxes. Without a doubt, living in Israel has helped us gain an intimate understanding of the complexity of water accessibility.
SHORTAGE? As abundant as it appears to be, only about 20 percent of the global population has access to running water.
Additionally, only one-third of the world’s population has access to clean water. There are estimates that in 40 years, more than four billion people – half the world’s population – are expected to live in areas that are chronically short of water.
Moreover, economic development has placed greater pressure than ever on the supply of fresh water. In 1900, the global annual water use per capita was 350 cubic meters; in 2000, that number had grown to 642 cubic meters. In the United States alone, the demand for water has tripled over the past 30 years, while the population has grown by just 50%.
CHINA, AFRICA, US The need to increase access to clean water around the world has led some to call water the “crude oil” of the 21st century. As the world becomes more and more developed, countries will have a moral obligation to provide this basic necessity to their citizens.
Everyone likes to point to the strong economic growth of China and India – and with good reason. Well, with little in the way of a sophisticated water delivery system, both countries are pumping hundreds of billions of dollars in improvements to their water infrastructure. Many sub-Saharan countries that are beginning to show signs of strong economic growth will be forced to begin providing basic necessities.
In all of these examples, we have countries with huge populations that are in their infancy when it comes to providing for the basic needs of their citizens.
They have been steeped in poverty for decades and only now are they emerging.
As such, they need to start from scratch, which means among other things, access to water.
In the US, much of the water infrastructure is more than 100 years old, has long exceeded its useful life and is in a state of utter disrepair.
The network of drinking-water pipes extends more than 700,000 miles – more than four times the length of the National Highway System. In short, a lot of investment needs to be made and work to be done.
Investments are now being made in new and more efficient water carriers, irrigation methods, desalination plants and water treatment facilities (among other solutions) to tackle this emerging global problem. Isn’t it ironic that Israel is a world leader in water infrastructure technology to help solve these issues, yet we can’t seem to solve our own water shortage!
NOW IS THE TIME For investors, a problem of such magnitude has the potential to produce profits. In light of the above, improving the water infrastructure is set to be a popular investment theme for many years to come.
May Hashem judge us favorably this year, and may the rains we receive this season be rains of blessing.
Chag Sameach.
aaron@lighthousecapital.co.il
Aaron Katsman is a licensed financial adviser in Israel and the United States who helps people open investment accounts in the US.