Now the numbers confirm what we all know; that Israel is truly a global leader in water technology. According  to a Globes article: “The Israel Export and International Cooperation Institute reports that water technology exports totaled $1.4 billion in 2008 - double the 2005 amount. The global water market is worth $400 billion annually and is expected to rise to $537 billion next year.”

The article continues “The areas of activity in which these companies are involved are: water management systems; safety and security for water sources; irrigation management systems; desalination; water recycling and purification; and others. Israel is ranked first in the world in recycling water for agriculture. 75% of sewage is recycled for agriculture with Spain, ranked second in the world, recycling 12% of its sewage for agriculture.”

Now if only the country could take of its’ own water shortage!

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While israel suffers through a major water shortage, it’s good to know that israeli companies continue to develop cutting edge water technology to help solve the problems of other countries around the world. The Israeli firm Netafim won a $22 million tender to install water irrigation systems for Peru.

According to Ynet: “Netafim, jointly owned by Kibbutz Hatzerim, Kibbutz Yiftach, Kibbutz Magal, Markstone Capital Group, and Tene Capital, signed the deal valued at $22 million, good news in light of the economic crisis, which has affected agricultural companies, mainly because of dried up credit sources for financing large-scale agricultural projects. Netafim themselves recently laid off more than 200 employees following a decrease in orders. The deal, signed with Peruvian company Maple Energy, stipulates that Netafim will provide engineering, planning, procurement, and building services, while also being the exclusive supplier of irrigation equipment for the sugar cane project. Maple Energy produces energy for industrial clients from oil, gas, and ethanol and is headed by CEO Rex Canon. The project will be spread over some 20,000 acres in southern Peru, which will be used to grow sugar cane used to produce ethanol and electricity. Infrastructure building is scheduled to be finished in 2010.”

This is a big win for Netafim, and an even bigger win for israeli water technology as a whole.

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Go figure. The Israeli government’s emergency plan to tackle the water shortage has failed. When will people learn that the government can’t solve our problems. Anyway with the driest January on record, Israel is in desperate need of about 100 million cubic meters of water for 2009.

According to a report in Globes:” Shani added that the Water Authority’s emergency plan, designed to rescue the water economy from its difficult crisis, was being implemented, but that it was inadequate. “We are currently working on a further emergency plan, in partnership with other government ministries, to cope with the worsening drought,” he said.”

Once again I am baffled as to how a country that leads the world in water technology and exports it to countries in need, can’t deal with its’ own water problems.

Aside from implementing technology and preaching conservation, I think that the only real solution will be through prayer. We basically need everyone to pray for rain in the holy land.

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With the Democratic National Convention in full swing, expect much attention focused on alternative energy, Cleantech and environmental issues. After all, House Speaker Pelosi has mentioned that her goal is to save the planet and Al Gore will show up and do his usual speech on how global warming will destroy the planet if we don’t do anything ASAP. I don’t want my cynicism to show through but have the DNC and Obama’s organizers taken any measures to ensure that this convention is environmentally friendly? How much energy is being used to run the event? Just asking.

Anyway, a great article out in the Jpost today about how Israel is on the way to being a world leader in Cleantech. While Shai Agassi’s electric car initiative has gained many headlines around the world, Israel is also very quietly making strong inroads, in solar and water technologies. The article focuses on how Israel is developing the technology for the purpose of letting larger nations do the implementation. Much like the current technological revolution, Israel has been behind many of the advances that have powered us forward. The view is that Cleantech will be Israel’s next boom industry as technologies will be developed that power a move away from crude oil towards alternative energy sources.

The article quotes Isaac Berzin, an expert in using algae to curb greenhouse gases: “Israel should be a world leader - creating the solutions the world is looking for. Investments are coming to Israel [as a result] and lots of jobs are created. Let’s say you develop a major solar technology, which is cost effective etc. What’s the demand for electricity in Israel? A small fraction of world demand. If your only output is Israel then you are in trouble. Hi-tech was great for Israel. Where were the markets? Out there, which is absolutely fine.”

It’s interesting that the one thing Israel lacks is natural resources. The one thing Israel has loads of is brainpower, ingenuity and entrepreneurship. Isn’t it ironic that Israel is using its’ main resource to try and level the economic playing field by developing technology that will greatly lessen the need for natural resources.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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