New Water Financier Scopes Markets in Gulf, India, and China

economy, water privitization

A large Saudi Company, among others, is staking it’s claim in the burgeoning enterprise of water investments. According to Arabian Business On-line, the joint venture is formed of two companies from Bahrain and Saudi Arabia. Starting with a minimal sum of $50 million dollars, the company has plans to finance water projects in arid areas such as the Gulf region, India, and China. The choice of these areas, where water is in great demand, could provide a surplus of business ventures for the new company, Moya. Nahed Taher, CEO of Moya, states:

“The demand for water in emerging markets is growing rapidly and the Gulf, India, and China are among the major markets that I want to be in,” said Taher.

“The demand elasticity for water is minimal hence no matter what the cost of water becomes, the demand level is always stable which makes water projects good ones to finance,” added Taher.

As parasitic as the above-quote does sound, capitalising on water has become commonplace, and, seemingly, is proving to make for a profitable endeavor.

It is not clear whether Moya intends on privatizing operating entities for water purveyors (British Model) or financing construction of such facilities (French Model).

However, privatization as a model for managing water supplies has been consistently problematic in the past. Examples of such problems include degraded water quality, unstable supply systems, excessive prices for water, and extensive public debt.

In summary, it is difficult to understand the commercialism of basic needs, and why a public resource such as water is not a guaranteed basic human right.

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Water Commodity and Global Market Trading

economy, water trade

Global market trades of water supplies seem a relative certainty as human populations grow, agricultural practices increase, and precipitation and snow-melt become more unpredictable. Investors are lining up to stake their claims. A recent article on the Times Online UK edition explains the likely scenario in an article entitled: Water whets the appetite of commodity traders with an eye to the next fortune.

The exact way water would fit into global market is still a bit ambiguous. It could be comparable to current markets in Australia or even micro-markets in the US where water rights are sold and/or traded simultaneously. A parallel is even drawn to current Carbon Markets – Emissions Trading. One thing is for sure, there are many individuals that would like to make a profit on the liquid of life – water.