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Saturday, November 15, 2008

Water - The Next Big Commodity ?

The opening of the Singapore Marina Barrage marks another milestone in Singapore’s history as we take yet another step forward away from our dependency on our neighbours for our livelihood. Recently finished after about three years of construction, the $176 million Marina Barrage will create a new source of precious water in a city-state with almost no natural resources of its own.Built across the mouth of the Marina Channel, the Marina Barrage creates Singapore’s 15th reservoir, and the first in the heart of the city. With a catchment area of 10,000 hectares, or one-sixth the size of Singapore, the Marina catchment is the island’s largest and most urbanised catchment. Together with two other new reservoirs, the Marina Reservoir will boost Singapore’s water catchment from half to two-thirds of the country’s land area. The Marina Barrage is the result of Minister Mentor Lee Kuan Yew’s vision nearly two decades ago when he envisaged damming the mouth of the Marina Channel to create a freshwater reservoir.

If Singapore is known as a green city because of its lush tropical growth, it may soon be recognized as a blue town for the pristine clear blue water right at the doorstep of the city. That is the hope of civic officials behind a project to seal off the city-state’s waterfront from the sea and create a three-in-one water source for drinking, flood control and recreation.Water has always been the contentious issue between Singapore and Malaysia. The rise and fall between the cross straits relations have always been link closely to the water issue. Singapore has been depending on Malaysia for nearly forty percent or more of its water supply. The importance of water to the Republic, economically and otherwise, cannot be questioned, and the historical and present role of Malaysia in assuaging this aspect of Singapore's vulnerability has been nothing less than crucial until recent years.

The issue of supplying water to Singapore has, at times, been brought to the forefront of the Malaysian and Singapore political arena. This can be traced to as early as 1965, the year when Singapore was separated from Malaysia. Since then, Singapore has sometimes been the target of resentment, or a political “whipping boy” from segments of the Malaysian polity (ruling and opposition members) and some of its constituents, especially when bilateral relations between these countries have become strained. This was sometimes brought about due to a perception of Singapore’s inadequate consideration of ethnic and religious sensitivities in Malaysia, sentiments arising from the widening disparity of affluence due to Singapore’s “uncaring” economic competition, “violations” into the territorial airspace of Malaysia, and views expressed by politicians from both sides of the causeway. The threat of cutting water supplies would often accompany such disagreements and tensions.

With the water agreement between the two states set to expire, Singapore began to take the bold step of cutting the dependency of our water supplies from Malaysia totally, first by the introduction of the Newater, the purification and reusing of waste water to make it fit for consumption and the conversion of all the canals and rivers to become a natural reservoir. Such is the bold step the the republic is taking and it has not gone unnoticed.

Academicians and experts believed that Singapore moves should be emulated. Water is set to be the next commodity. As the dependency on oil is set to be reduced with the introduction of renewable energy such as wind, solar and thermal energy and nuclear energy, water is fast identified as the next big commodity. Though Singapore may be at the forefront in the water technology in the Southeast Asia, Europe, America and Canada is fast moving ahead in the modernisation and privatisation of water technology with many private infrastructure set up to meet the demands of the locals. As the demand of oil deep in the realisation that the oil well around the world set to be drying up in less than 50 years and the ever advancing technology in renewable energy, the demand for water is never set to reduced.

As the population of the earth is set to increase in leaps and bounds over the next century so will the demand of water. Let us faced it, we all need water to live. As useful as oil, copper and corn may be, we could get by without them for a while or may even be dependent from it sooner then expected, but water? Water is a necessity. And for some, this makes it the ultimate commodity.People invest in commodities for a lot of reasons: for diversification; as a way to play growth in the developing world; because they think demand growth will outstrip supply.

Demand for water is steady and never-ending, meaning water investments should not be correlated with broader economic developments. Meanwhile, history shows that as economies develop, citizens will demand more and more water to support richer lifestyles, making water an interesting play on countries like China and India. And finally, the world is in a silent water crisis, with rising demand set against limited supply; a classic commodities squeeze. The reality in the current water supply is that the distribution of existing water resources around the world is horribly uneven with almost 60% of the world's fresh water located in just nine countries. Unlike oil or other natural resources such as oil or precious minerals or metals water isn't portable; it simply doesn't make economic sense to transport water from one continent to another even if the value of water rises tenfold. In location where water is actually available it is more than often not suitable for consumption either because it is too hot or too old, or, perhaps, too dirty or too salty or increasingly, it's also too polluted.

With the rise in industrialisation significant percentage of water reservoirs are rendered unfit for human consumption.In countries, where water is generally available, the infrastructure supplying it is old and decaying and there were still no real efforts to upgrade the infrastructure to make it more efficient and cost effective. However all this are set to change. In a few years to come, we will be seeing more and more industrialised countries upgrading their infrastructure and tapping into the reservoirs of sea waters to convert it to drinkable water. Singapore for one has already joined the band wagon and moving ahead.

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