Water: Earth's Most Valuable Commodity
James S. Cramer
U.S.-Arab Tradeline
April 23, 1999
This is the first installment of a two-part series addressing the increasingly
pressing issue of water resources in the Middle East. In the next issue of
Tradeline, we will address possible solutions and US corporate involvement in
the process.
Water covers two-thirds of the earth's surface and is present in numerous
ground sources, yet only five to six percent of that total amount be used for
consumption. Among environmentalists, businesspersons and national
leaders concern is growing as that limited amount is depleted more quickly
than it can be replenished.
Currently 20 percent of the world's population in 30 countries face water
shortages, and the United Nations Environment Program (UNEP) has warned
the international community that if global water resources are not used more
efficiently and sparingly, water shortages will effect 30 percent of the world's
population by 2050. The UNEP emphasizes that wealthy countries should
coordinate funds for water infrastructure projects in developing countries to
ensure that current and future shortages are addressed and arrested. By
increasing aid by $50 per capita in rural areas and $110 in urban areas, said
UNEP, the international community could help eliminate 3.35 billion cases of
illness associated with unsafe water. The total cost would come to $23-$25
billion, only three times the amount the United States spends on cosmetics in
one year. In the Middle East, concerns about water shortages have taken
center stage as population and economic growth have put strains on the
region's rainfall and non-renewable groundwater reserves, the main sources of
water for Arab countries.
In Jordan, citizens are already beginning to feel the pinch of low water levels.
The country faces strict rationing; each household (averaging nine people) is
allotted only 22 gallons per day. Unlike its neighbors Turkey, Iraq, and Egypt,
Jordan does not have access to river sources and lacks the necessary funds
to construct desalinization plants like many of the Gulf Arab states. A recent
announcement made by Israel that it will cut 50 percent of water supplied
under conditions in the Oslo Accords has exasperated the problem. The
United States Agency for International Development (USAID) has estimated
that by 2001, Jordan's annual water demand will rise to 1.2 billion cubic
meters, a significant increase over the 750 million currently available for
sustainable use.
Jordan's water levels, like those of its neighbors, are not primarily being
depleted through personal consumption, but by agriculture. On a worldwide
basis, efficient use of water in agriculture is not the norm.
Cornell University has estimated that the world average for crop
aqua-efficiency is currently at only 40 percent. This inefficiency, defined as
poor irrigation techniques that cause unnecessary water loss during delivery
to crops, is often due to inadequate infrastructure. "Water Resources:
Agriculture, the Environment and Society," published in a 1997 issue of
BioScience Journal suggested some technologies that agriculturalists could
use to improve efficiency, including surge-flow irrigation, night irrigation,
low-pressure sprinklers, low-energy precision application, and drip irrigation.
Such applications will help eliminate some of the problems of unreliable
delivery and evaporation, but it is up to the farmers themselves to be more
conscientious about how they use water. In a number of Arab countries this
inefficient use can be attributed to government subsidies that keep the price of
water low for farmers.
David Pimentel, professor of ecology at Cornell University, recently indicated
that farmers throughout the world must be forced to pay the 'true-price' of
water if scarcity is to be seriously addressed. Said Dr. Pimentel,
"Undercharging for irrigation water in the US and other nations hides the true
cost of food and encourages the planting of low-value crops. If farmers paid
the full cost of water, they would manage irrigation more efficiently. We should
reward water conservation, not water use."
Like a majority of the world's countries, Saudi Arabia's farmers consume 90
percent of the country's yearly water resources. Low prices for irrigation as
well as the heavy development of deep drilled wells during the 1980s and early
'90s led to the cultivation of crops that were not naturally suited for the
country's environment, putting water use on an ever increasing scale. The
kingdom saw apparent improvements in efficient water use as falling prices
cut the production of water-intensive wheat from four million tons in 1990 to
1.3 million tons in 1997. But, because of continuing low water prices (a result
of government subsidies) and strong returns, farmers have simply replaced
wheat with alfalfa, another water-intensive product. Although earnings are
made through the plant's exportation to regional neighbors, officials like
Hussein Mousa of the US Agricultural Trade Office in Riyadh feel that it "is
like exporting water."
Concerns about water use in Saudi Arabia are also carrying over to
non-agricultural sectors. Government subsidies have made water extremely
inexpensive for consumers. If charges are actually incurred by consumers,
they are so insignificant that many do not give them, or the amount of water
they are using, a second thought. Such cases of low to non-existent water
charges do not occur only among Saudi Arabian nationals but also within the
country's expatriate population. A Western businessman told Hilary Gush of
Reuters in 1997, "The water charge is included in my rent, so I don't even
have to think about how much I use." In essence, water has become a free
and expendable commodity for the majority of Saudi Arabia's population.
Said one economist to Ms. Gush, "Many people who never receive water bills
think that, because it is free, we have plenty of it. If they are forced to pay
realistic prices they will quickly learn [what] water's worth." Like agri-culture, it
appears that stricter restrictions on use, increased accountability, and higher
prices might reduce some of the strain under which Saudi Arabia's and other
Arab countries' water levels are suffering. Also, increased payments would
provide funds for water-infrastructure projects, projects which cities like
Jeddah need.
The March 20, 1999, issue of Middle East Business Intelligence reported that
in Jeddah, poor infrastructure has meant that only a small portion of the city's
sewage is ever treated. In fact, 90 to 95 percent of the 4,000 tons of sewage
produced daily is stored in large tanks for some time and then simply
transported to the outskirts of the city for dumping. The resultant lake of
sewage has begun to seep into the limited ground water supplies and damage
building foundations and road infrastructure by raising Jeddah's water levels. A
commercial officer at the US embassy in Saudi Arabia told the Middle East
Business Intelligence that concerned Jeddah officials have expressed
willingness to consider proposals for the construction of a treatment plant and
sewage infrastructure for the city that could help eliminate some of these
problems. International bidders, including a number of US firms top the list of
perspectives.
Summing up some of the water infrastructure problems that are facing the
Middle East, Jamal Saghir of the World Bank told the Middle East Economic
Digest (MEED), "In flood irrigation, only about 30 percent of the water reaches
the crops. Urban water systems are also inefficient, losing an average of 50
percent of available supply in unaccounted for water. Poor maintenance,
inappropriate technology, and weak technical and financial management are
the main causes."
As Arab countries concentrate on improving their agricultural techniques and
water payment plans, they are also increasingly turning to desalinization as a
means to increase their supplies of water. Until now it has primarly been
oil-rich Gulf states that have benefited from desalinization, but technology
improvements and lowering costs have made the option available for other
Arab countries experiencing a water crunch. ¨ |
