Investment: The Power Of Water By Gareth Milliams

It is the one substance that man needs to survive. Without it, life as we know it cannot continue. Despite this, supplies of clean, drinkable water are diminishing rapidly due to the global population boom and industrialisation.

As its flow continues to dry up, the price of water will increase rapidly. In the wake of this crisis, financial institutions have begun to create new funds so that investors can benefit from investing in this rare commodity.

On paper, the potential opportunity for profit looks immense.

Glaciers are melting, rivers are drying up and over usage has reduced rivers that were previously raging torrents to trickles. The glass is now absolutely half full and its price will rise.

But there is an obvious question that needs to be asked. Will water management be left to the private sector or is it more likely that the entire industry globally, will become heavily regulated and the various water companies run as state monopoli?

In a worst case scenario, Water will become a national security issue. There will be countries that are haves and others that are have nots.

Imagine a situation such as we saw last winter with Russia and the Ukraine. Ukraine had not paid its bill and so Russia cut off the gas supply. The collateral damage meant that other countries were also affected, particularly Bulgaria. Now imagine that happening with water.

This is not a matter for mere corporations. This is the stuff of reapolitik. This is the business of governments not banks. There is also a moral issue and the notion that it is ok to financially benefit from the scarcity of a substance that is the very stuff of life itself.

Before I begin to overindulge in my new found piety though; I cannot see how water utility corporations will be allowed to continue as private sector entities, particularly if water has long term supply issues. If the point of investing in water funds is to benefit from long term shortages, then surely at the very point when these funds are about to make their greatest profit, they will be nationalised.