Thomas White Global Investing
Jordan
Jordan Stamp
October 10, 2008
A Postcard from the Middle East
Jordan: Ancient Petra Meets Modern Amman in Water Battle

Petra, a World Heritage Site The ancient Nabatean civilization in Petra, now a World Heritage Site, flourished because of the people’s ability to manipulate the constant flash floods that occurred in the region. Through cleverly constructed dams, cisterns and aqueducts, the ancients were able to sustain their population in Petra through long droughts, and even prospered by selling the valuable commodity.

The landlocked country of Jordan has been literally in troubled waters for centuries. For apart from conflicts for peace, the country has been racked by the lack of water. Jordan is among the 10 most water-scarce nations on earth, due to both a lack of natural resources and continued human pressure on the basin of the River Jordan.

For many years, demand has tipped the scales, with never enough supply to meet the thirst-ridden land, especially in the capital’s Greater Amman area where 2.2 million residents consume 160 liters of water daily per capita. What’s more, up to 51% of the water in Jordan is currently wasted, with half of the population not currently served by sewerage networks. Since the 1970s, ground water aquifers have been exploited to supply demand. In time, these underground reservoirs had to be worked at more than double their sustainable yield on average. Today, the problem of water scarcity has reached immense proportions – enough to threaten the growth of the economy.

A burgeoning population and fast depleting renewable freshwater resources have become the government’s priority. This has prompted the Water Authority of Jordan to implement water-rationing policies. The Disi-Mudawarra to Amman Water Conveyance System project (Disi Project) is one of six strategic plans initiated by the ministry to address the urgency of the country’s water problems.

The 201-mile long Disi project is a fossilized 300,000-year-old aquifer designed to provide pipelines of precious water to Amman. The implementation includes digging 55 underground wells in the Disi aquifer at a depth of 500 meters, and it is hoped that the new Disi system will not only bring an additional 100m cubic meters a year to the capital, but will be able to supply water to the city for the next 100 years. Established earlier this year, the Disi Water Company will be in charge of managing the project, which was formally launched in August 2008.

Alarmingly, agriculture accounts for 65% of the water demand, yet this sector only contributes a mere 3% of the country’s GDP. The Disi project will have an indirect effect in improving the quality of wastewater, which can then be used in irrigation projects in place of freshwater. This is more valuable and can be diverted for human consumption. If the canal network improves, then the amount of freshwater available for human consumption and industry will increase. Industry and services contribute 26% and 70% respectively to the GDP and they will be hugely benefited with a higher supply of water. Increasing the canal network in Jordan will allow more water to be treated and the government is looking to increase capacity by over 100 million cubic meters by 2020.

The scarcity of water in Jordan makes the management of this precious resource very complex from a political, technical, socioeconomic and environmental perspective. In a country where 92% of the land is arid desert, extending the canal network and reaching into deep aquifers are the only way out.

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