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Water as a Commodity:
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Why Big Banks May End up Buying Your City's Public Water System
By Jo-Shing Yang
In uncertain
economic and environmental times, big banks and financial groups are
buying public water systems as safe investments.
Water is the new oil for global
financial powerhouses and water is being commoditized and traded in
global stock exchanges.
Today in addition to being able
to buy water rights and purchase lakes on private land, an individual or
a corporation can invest in water-targeted hedge funds, index funds and
exchange-traded funds (EFTs), water certificates, shares of water
engineering and technology companies, shares of multinational private
water utilities, shares of multinational banks and investment banks that
own water companies, and a host of other newfangled water investments in
this U.S.$425 billion industry which is expected to become a U.S.$1
trillion industry within five years. And if one happens to be a tycoon,
one can also create his or her own private water districts and water
utilities.
The recent media coverage on
water has centered on individual corporations and super-investors
seeking to control water by buying up water rights and water utilities.
But paradoxically the hidden story is a far more complicated one. The
real story of the global water sector is a convoluted one involving
"interlocking globalized capital": Wall Street and global investment
firms, banks, and other elite private-equity firms -- often transcending
national boundaries to partner with each other, with banks and hedge
funds, with technology corporations and insurance giants, with regional
public-sector pension funds, and with sovereign wealth funds -- are
moving rapidly into the water sector to buy up not only water rights and
water-treatment technologies, but also to privatize public water
utilities and infrastructure.
More of this article
The World's top water stocks.
by Annunziata Rees-Mogg
The following is from the article,
but better then half way through it.
Water commodities
used to be thought of as boring, defensive stocks. Not any more. The US
water sector has returned 244% over the past five years, outperforming
the S&P 500 by about 260% the index has actually lost 17% over the
same time and in the UK, water-related utilities have also delivered
some impressive returns.
There is a lot of
misery in this story, but the good news for savvy investors is that the
acute shortage in the longer term means that "water will emerge as the
next growth commodity", says John Romero, who runs Aptus Partners, a US
hedge fund that has been buying up water stocks.
That means there are opportunities to make money if
you know where to look "Water is blue gold; it's terribly precious,"
says Maude Barlow, chairman of the council of Canadians. "Not too far in
the future, we're going to see a move to surround and commodify the
world's fresh water. Just as they divvied up the worldıs oil, in the
coming century, there's going to be a grab." So how can you buy into
that "grab"?
Water: The Ultimate Commodity
By Jim McWhinney
In the closing days of 2005, the PowerShares Water
Resources Portfolio became the most recent addition to a growing number
of ways to invest in water. This new
exchange-traded
fund (ETF) is designed to track the performance of the Palisades
Water Index, an unmanaged
benchmark.
Why the interest in water? Like gold and oil, water is a commodity
- and it happens to be rather scarce.
Summer 2001
Maude Barlow*, national chairperson, Council of Canadians
In the new economy, everything is for sale, even those
areas of life once considered sacred, like seeds and genes, culture and
heritage, food, air, and water. As never before in history, the public
space, the vital commons of knowledge and our natural heritage, has been
hijacked by the forces of private greed.
Water is a Human Right, not a Commodity
Maude Barlow,
CBC Interview, (pdf format)
"The human right to drinking water is
fundamental to life and health. Sufficient and safe drinking water is a
precondition for the realization of human rights."
United Nations 'General Comment' on the Right to Water.
On November 27, 2002, water was formally recognized as a human right for
the first time when the United Nations Committee on Economic, Social and
Cultural Rights adopted the "General Comment" on the right to water, and
described the State's legal responsibility in fulfilling that right.
"The simple fact is, this model of
privatization doesn't work. You cannot marry the profit motive to
something like water or air which people need to survive. We have to
take this notion of fresh water out of the market place and say that it
belongs to the earth, it belongs to all species, it belongs to future
generations, and no one has the right to commodify it for personal gain.
We believe that water is a lifeline and we should have an international
convention that declares water as a fundamental human right and that
everyone on earth should have the right to enough to live on."
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