Iran’s looming water crisis

This is an audio transcript of the FT News Briefing podcast episode: Iran’s looming water crisis

Joanna S Kao
Good morning from the Financial Times. Today is Thursday, December 2nd, and this is your FT News Briefing.

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The Women’s Tennis Association has suspended its tournaments in China. Some hedge funds are having to go to extreme measures to recruit top traders. In France, wind energy has been swept into a national political debate. And a severe water shortage sparked weeks of protests in Iran.

Najmeh Bozorgmehr
Water has surely become a hydro-political crisis in Iran, and it’s probably the biggest challenge that the Islamic Republic is going to face in the not too distant future.

Joanna S Kao
I’m Joanna Kao, in for Marc Filippino, and here’s the news you need to start your day.

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The Women’s Tennis Association says it will suspend its tournaments in China because of Beijing’s handling of tennis player Peng Shuai. Last month, the Chinese tennis star accused a former top Communist Party official of sexual assault. Since then, her Weibo account has been censored and her whereabouts were unknown for several weeks. Yesterday, Steve Simon, the head of the US-based WTA, said he hasn’t received satisfactory assurances that Peng is free, safe and not subject to censorship. The organisation holds 10 global tournaments in China. It also has a contract to host its marquee finals in the southern Chinese city of Shenzhen. The WTA executive said he’s concerned about the risks that his players and staff could face if his organisation were to hold events in China in 2022.

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Hedge funds have made up well during the pandemic, so well that in one especially cut-throat corner of the industry, multi-manager funds, there’s a war for talent. Firms are pulling out all the stops to recruit top traders and traders have become pretty bold. Here’s the FT’s hedge fund correspondent, Laurence Fletcher.

Laurence Fletcher
So I heard this instance where a firm had approached a trader. They wanted to hire them. The trader said, okay, if you wanna hire me, it’s 10 million that you need to cough up. They prefer to say, well, is there any negotiation in that? They’re told, no negotiation.

Joanna S Kao
So Laurence, how did the war for talent at these hedge funds get so brutal?

Laurence Fletcher
What’s really changed is that these funds have done so well during the pandemic, essentially, and they’ve done really well because a) they diversified into lots of different strategies and assets, that’s been very good when markets have been choppy. And also they’re very good at risk management as well, which basically means that when markets fall very quickly, they’re very good at cutting risk and when markets are, you know, rebounding, they’re very good at sort of increasing risk again. So basically, these funds have, you know, swollen in assets by 100 billion in the course of two years. So they just need more traders basically to run all this money.

Joanna S Kao
That’s Laurence Fletcher. He covers hedge funds for the FT.

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In northern France, locals have been protesting against a multibillion-euro offshore wind energy project. It’s not the first time there have been protests against wind farms, but this one’s collided with national elections. Here’s the FT’s Sarah White.

Sarah White
This one has sparked particularly strong protests locally. You’ve had, you know, fishermen going out in their boats at sea when drilling started underwater, drilling started this year and sort of sending a flotilla out. So it’s been quite a colourful protest that’s attracted some attention. But I think what’s, it’s not so much this wind farm in particular, it’s more that politicians have jumped on it because wind farms more generally have become quite symbolic in France. And particularly on the right, on the far right and in the Conservative party, wind farms have become more and more sort of ideological targets in the sense that, you know, people are assimilating this with the destruction of the countryside or French landscapes. And so that has made it suddenly this incredibly, you know, vocal talking point in France.

Joanna S Kao
But Sarah, in the broader discussion of clean energy, how much does France need wind energy? I mean, the country is known for having a very large nuclear energy industry. Does that play into this debate?

Sarah White
I mean, that’s a huge part of the debate. The French nuclear industry has been a source of great national pride for many years. It’s the source of many jobs in France, so it has a lot of backers. I mean, that’s, that includes the government. And that includes, in particular, parties on the right, on the, on the left and among green parties it has some detractors. You know, there’s worries about an overreliance on nuclear as a safe source of energy. But certainly there’s a very sort of strong, pro-nuclear lobby and in France, and that plays into the debate on wind. There’s a feeling among manufacturers and developers of wind projects that the anti feeling in France partly comes from that from, you know, a sort of strong, pro-nuclear lobby group that doesn’t necessarily want this rivalry from other sources of energy. But what all analysts and government institutions will tell you is that without developing and massively ramping up sources of renewable energy in France, and that’s not just wind, there’s solar as well, France is never gonna reach its its midterm and long term energy transition targets.

Joanna S Kao
Sarah White is the FT’s Paris correspondent.

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In Iran, there’ve been big protests in the southern city of Isfahan. Hundreds of farmers and other residents camped out, basically occupying the parched riverbed of the city’s main waterway.

Najmeh Bozorgmehr
They wanted water. They were vowing not to leave until water was back into the river, which was an impossible demand.

Joanna S Kao
The FT’s Tehran correspondent Najmeh Bozorgmehr has been monitoring the protests. She says they started peacefully.

Najmeh Bozorgmehr
And then security forces intervened and cleared the riverbed. And then there were clashes at midnight. But Isfahan residents who, thousands of whom had joined farmers the week before, went back to the riverbed and staged their major protests. They chanted anti-regime slogans, and the riot police used tear gas and shotguns to disperse the crowd. Many were injured. I’ve not heard of any deaths, but tens apparently were arrested.

Joanna S Kao
And this water crisis isn’t just a problem for Isfahan. Najmeh says the country has faced water shortages for thousands of years.

Najmeh Bozorgmehr
But in recent decades the problem has become severe. The population has more than doubled. Iran is struggling with drought for the past two decades. Meanwhile, there has been state mismanagement by which populist politicians have capitalised on votes of farmers and rural people and allowed them to overuse underground water resources. Farmers plant water-intensive crops and nobody in the government stops them.

Joanna S Kao
And even if the government did try to deal with the shortage in Isfahan’s Zayanderud River or anywhere else, Najmeh says they wouldn’t have many options.

Najmeh Bozorgmehr
To be honest, there is not much the government can do at this stage because there is no water behind dams. Zayanderud dam is 86 per cent empty. It’s almost empty, so water cannot be given to farmers. On the other hand, the government is struggling with the US sanctions and the shrinking income, so it’s not even easy to pay farmers to go and sit home until, I don’t know, if in the spring there is rain, if there is more water later. So it’s a very complicated situation for the government that it can neither give farmers water nor much money to compensate for their losses.

Joanna S Kao
Najmeh told me that sanctions make it hard for Iran to even consider options like new irrigation technology. But the international community does need to pay attention.

Najmeh Bozorgmehr
Yes, I think this crisis, this water crisis in Iran definitely needs international help. This is gonna be the biggest crisis. And one environmental activist rightly told me that if that happens, it’s not going to be only Iran’s problem. Iran has a population of 85 million people. If there is no water, where are they going to go? They have to migrate from the country. This is gonna turn into a global problem.

Joanna S Kao
Najmeh Bozorgmehr is the FT’s correspondent in Tehran.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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