Bonus episode: Winning the Water Game in the Middle East - with Seth Siegel

You are listening to an Art Media Podcast.

Hi, it's Dan. Sorry to interrupt your weekend, but there's something I wanted to share.

This week, another podcast in the Art Media family called What's Your Number aired an episode that's really worth your time.

What's Your Number is a weekly podcast committed to delivering insight and analysis on Israel's economy, its tech sector, and its current tech boom, and the overall business environment in Israel.

It's hosted by Michal Levrom, a longtime business reporter based in Palo Alto, who is editor-at-large of Fortune magazine and who also contributes to CNBC, and also Yonah Tanadiri, who is an Israeli tech entrepreneur and previously served as an advisor to former Israeli President Shimon Peres.

This week they hosted entrepreneur and investor Seth Siegel. Seth has been a leading voice on an important part of every country's economy and society.
That is water.

His book, Let There Be Water, tells the story of how Israel used its environmental disadvantages to become perhaps the global leader in water innovation.

Michal and Yonatan talked to Seth about this and how Israel's neighbors from Egypt to Iran did everything wrong and how their hostile obsession with Israel put them on the fast track towards a water disaster.

The interview pivots off a piece that Seth just published published in the Wall Street Journal on the growing water crisis in Iran.

Water is one of the most crucial resources in the Middle East, and leading on this front will play a decisive role in shaping the geopolitical future of the region. Here's the conversation.

So, Yonatan, what's your number this week? It's $100 million, $100 million invested in an Israeli drone company called Heaven,

making it the newest unicorn in Israeli defense tech. And there's actually an interesting side to this.

According to The Marker, the Israeli newspaper, the company that led the round is, you know, one of the most hyped quantum computing, nice traded companies, IonQ.

Peculiar, but we may have a new insider into the Windex in the next few months. So I like this number.

And by the way, it's heathen, it's with a V, not to be confused with heathen, like H-E-A-T-H-E-N, which is a different meaning and would be weird.

H-E-V-E-N, top-notch drone company. Very odd that IonQ invests.
There has been a rationale out there for like quantum sensing on a drone. Okay.

I love it if it's real, but sounds lofty and aspirational. So 100 million north of a billion valuation.
Interesting investors. Israeli Tech continues to deliver.
Well, my number is 1.03%.

This is the rise in the Tel Aviv Stock Exchange Sunday, November 30th. And the stock exchange rose on news of Bibi's request for a pardon, which we will get to.

Interesting move. So, whose number wins? Your number wins.
I think it tells the story of the week.

Israel's back from sort of the fog of war lifts, and we go back to the old stories ahead of the election. So, I'm with your number this week.

It is close to 11 a.m. here in Palo Alto.
Close to 8 p.m. in Mallorca, Spain, where I am with one of my kids who is competing here.
There's an international tennis competition.

Very happy to report day one, quarterfinals on both sides. But let's see how this week goes.
Tomorrow, he may play a Kuwaiti player, so that may be a bit awkward.

Some countries with which we don't have diplomatic relations don't show up. So I hope that's not the case.
Well, good luck to him and Masalto so far. It was a good opening for us.

As you said, kind of the big story now is Bibi's request for a pardon. I think the angle here that I want to explore with you is the economic one, which there is.

You actually went through and read this whole hundred-plus-page manifesto. I cannot believe you did this, but what are you looking into? You know, fog of war is lifted.

We are now, you know, at the latest nine months ahead of an election. And so, Israel's back to these types of bickering and taking over the news cycle, cycle, right?

So the ultra-orthodox recruitment law framework is coming for a vote these coming weeks. So there's kind of like a bickering and a battle on who owns the news.

On the economic side, I do hope, and I've been in touch with some folks at the Ministry of Finance recently, that we get to pass the budget. This is a pivotal budget.

This is a budget of getting out of the war with a lot of, I would say, visibility over the next few years of economic growth and performance.

And so big battle, 90 to 140 billion shekel, 50 billion shekel gap. Just to give you a sense, that's like twice the budget of the police in Israel.

That's the difference between the Ministry of Finance and the Ministry of Defense that wants 140. So is Israel on its way to seconding its entire economy to the defense budget or not? Big questions.

And a lot of that will be decided by who wins the election. And, you know, I think Netanyahu has won over big parts of the Israeli society at the end of the war.

So, yeah, this is very meaningful for the Israeli economy. On the request for a pardon side, what do you make of the Tel Aviv Stock Exchange rising?

You know, I think at the end of the day, you know, people are tired. This is, like President Trump said, the specter of the prime minister.

in the courthouse three times a week discussing champagnes discussing you know these and that details of a meeting that was or was not there, I think is tired Israelis.

A lot of Israelis are willing to stand by a pardon or a deal, depending on the facts. Now this has been punted into President Herzog's court.

He will have to decide, by the way, I haven't worked with the president. It's interesting.
The Israeli president has no authority whatsoever on anything, but two things.

One, he has the right to award the winning party post-election with the mandate mandate to set up a coalition, which is a big deal. The second is to pardon.

And in pardoning, he actually has quite a broad leeway. So we're going to see this play out.
And I do not exclude a real pardon. Well, we know where President Trump stands on this.

So I think, you know, he holds sway, obviously. So he is mentioned in the 107 pages.
I have not read. the document, but you know, that's why I have you.
So we'll revisit BB later on in the episode.

We've got a lot to get to. I want to get to the Windex.
Before we do that, we've got a really special guest, Seth Siegel.

Seth is a guest whose work has become essential reading for anyone who is trying to understand the future of water in the Middle East.

He's a leading voice on water policy and innovation, the author of several best-selling books, including Let There Be Water. This is the definitive account of how Israel became a global model.

for water management. And he recently wrote an op-ed in the Wall Street Journal about Iran's escalating water crisis, which caught our attention.

And interestingly, how its hatred of Israel actually kind of helped lead it to this moment of crisis. So we'll explain more of this during the interview.

But just taking a step back, we also want to talk to him about how water, maybe more than any other resource, plays such an important role in the Middle East's economic trajectory.

So more on that in just a bit. But first, as usual, let's take a look at the Windex.

This is our what's your number index that tracks the performance of publicly traded Israeli-based or founded companies.

Yonatan, on to the Windex. How were things looking last week? Yeah, you know, so the week before our beloved Windex was swimming in red.

And I'm happy to report that it bounced back north of almost 5% back on the green, which is great. Obviously, NASDAQ and SP rose at 3.5% almost and 3.93% accordingly.

So it's been a green week in Wall Street, but it's great to see the Windex climbing back. Clearly, Palo Alto Networks, the kind of core of the index, has been up at about 4%.

So predicting the green, but I think a couple of more interesting equities there is Zim, which we've been following. The Israeli shipping company is up 20%.

Seems like the management buyout is going to work out eventually. And Lemonade at 16% bouncing back.

That's great to see Lemonade after kind of changing hands and people taking taking risk off the table after the fantastic rally, you know, moving up, trying to reclaim its heights from three years ago.

Very strong reports. And the system really works there in

basic, you know, Wall Street standards. So that's really wonderful to see.
To me, though, the most interesting one, I'm curious to hear your thoughts about that has been Teva.

topping at double digits, 11.7% on a week. I can't remember the last time when Teva bounced that way.

They had great Wall Street welcoming in early November, kind of predicting certain approvals for certain drugs in the pipeline and recommending higher equity prices.

That reality has unfolded in the last couple of weeks. And so the stock has gone up 11.7%.

To those of our listeners who are not familiar, I would say between 2000 and 2013 or so, Teva was considered Menayat Haam, like the people's stock.

We had it occupy a big chunk of Israeli pension funds, investment strategies. And Teva, you know, was at some point the biggest generic drug company in the world.

They had a huge blockbuster, Copaxone, invented in Israel and delivering phenomenal margins, but then failed to create a pipeline of ethical drugs.

And then this sort of growth through MNA and MNA of generic drug makers is really what killed, not killed, but sort of, you know, set back the company years and years back.

So it's nice to see Teva, you know, assuming its role. A couple of stocks in the red, just really five or six on the 51.
Most notable is Monday.com shedding 2%,

still not recovering.

And Wix, which sort of remained unchanged over the last week, but definitely AI hovering big around, you know, a big cloudy, I would say dark clouds around companies like that, which the market thinks, you know, are not going to be able to sustain their growth trajectory as they have enjoyed in the last five years.

So they don't get written off, but parts of their growth does. And so we're seeing those stocks recede.
But other than that, great week for the Windex.

And in a couple of weeks, we're going to compare Windex SP and Nasdaq on the year. So far, Windex leads pretty nicely on a nice margin.

So I think, you know, that sort of is the Christmas episode of what's your number

is where we're going to share those. Chrismica.
Christmaka. Chrismica.
Yeah, exactly. Yeah.
Looking forward to seeing those end-of-the-year numbers. So more to come.

On to our long play. Today, we're speaking with Seth Siegel, the leading voice on water policy.
Seth literally wrote the book on how Israel became the model for water innovation and management.

And he recently wrote an op-ed in the Wall Street Journal about Iran's mismanagement of its water resources and systems. Seth, welcome to What's Your Number? Great to be here.

I confess I'm a listener. So when I got the phone call, geez, I know that show.
We love to hear that. I want to dive right in.
There's so much to get to here. And your op-ed was fascinating.

It starts with the line, Iran is running out of water. Can you just, for starters, help us understand how Iran got here? Sure.
It's a combination of things. With water crises, it's never one thing.

But the nice thing about water crises is that they tend to come at you very slowly. And other than maybe it's tsunami, they come at you slowly.

That means that if you use the time well, you never have the crisis. You have a problem, but you have time, you have years, decades sometimes to fix the problem.

But when you kick the can down the road, or in the case of Iran, when you do things that are so extraordinarily stupid, I don't know how to use the better word.

It's just dumb, bad policy, corrupt policy. When you do things like that, then you're going to really come a cropper when the bad day comes.

So it's a combination of things, population increase, you know, people, each person uses some amount of water.

The recklessness with which the Iranians encourage the use of a lot of water because of bad pricing policies, they subsidize water.

They use about 90% of their water for agriculture, which is higher than most of the world.

Part of the reason for that is that they subsidize the water that farmers use, and they also give farmers highly subsidized energy because they're an energy producer.

So farmers are not disincentivized from turning on their pumps and just leaving the water pumps on.

So a lot of the water that's being drained drained out of that is, and some of your listeners may know the difference between groundwater and surface water, but those are important distinctions.

Groundwater is a more problematical source because it has to be recharged or renewed, sometimes from rain, sometimes from snow.

And if it's not, think of it as, say, a bucket of water where you're taking out a cup and putting in a teaspoon.

And over time, you know, it won't be immediately that you'll run out of water, but you'll keep diminishing the total amount of water you have.

So the fact of reckless water use, the subsidies, all of those have caused some contribution.

Climate, they are in the middle of a drought, but again, it's a region that has droughts, so government should have known there's going to be a drought sooner or later.

They also have terrible lack of enforcement about illegal buildings so that lots of surfaces are covered over with asphalt or concrete so that water can't percolate into the aquifers.

You have a very high level of leaks, not the highest in the world, but among the highest in the world of high level of leaks in urban systems.

We didn't talk about the role of corruption in all of this. So the IRGC, the Islamic Revolutionary Guard Scorps, the ideological enforcers of the regime, they are very brutal and quite relentless.

They're also highly corrupt.

And since about the late 1980s, they've received just about all of the major, perhaps all of the major engineering and construction projects involving water in the country of Iran.

And it's used as a means for them to funnel billions of dollars out of the annual federal treasury into the hands of the IRGC, to giving it the aura of legitimacy.

But in fact, it's a corrupt bidding system. The bigger the project, the more the opportunity for taking money out of the system.

So they put a lot of dams up, they reroute rivers, they divert waterways.

And sometimes they do that to take away from farming districts, to move water away from less favored ethnic groups, and they relocate it for more favored groups.

And all of that plays the the part in why we are where we are today, where it's not just Tehran, which is what I focus my op-ed on, but all of the countries facing grievous water crisis.

Can you touch on the role that, you know, to the point of your op-ed, that hatred of Israel has also played here?

And maybe it would be helpful to go back kind of pre-revolution and set the scene for our listeners of Israel's role before the revolution. Sure.

So, you know, people always assume that what is today is what always was. So you assume Iran must have always hated Israel, must have always kept Israelis out of Iran.
It's not true.

By the year 1960, Israel was founded in 1948.

And among the very first things that the country does, and I write about this in my book, Let There Be Water, among the very first things that they do is they find themselves with the need to do a number of things in state building, but they take on water systems very quickly.

They understand that to be successful, they're going to need to be smart about all kinds of different parts about water.

But it becomes known in the Middle East and certainly in other parts of the world that Israel has been thinking about water. So the Shah of Iran was a fairly pragmatic guy.

He was like the leader of the country until the 1979 revolution.

And he very quietly reaches out to the Division of the UN, the FAO, and he asks if they could ask Israel to send a handful of water engineers over to Iran to help advise them. They sent three.

About three years later, there was a grievous, horrific earthquake in an agricultural area in Iran, and it destroyed the irrigation systems. It was an ancient irrigation system.

And these water experts were already there. And the Shah asked them if they would help bring other water engineers from Israel over to Iran to help fix the problem.

Now, Israel, from a realpolitic point of view, understood how great this was.

I just want to, again, frame it with a political overlay, which is at that time, we're talking about early to mid-1960s, Israel faces a ring of very hostile Arab states.

I know there was no Abraham Accords. There was no peace with Egypt.
There was no peace with Jordan. There was nothing like that.
It was only hostility.

And Israel developed this theory that maybe they could have Islamic states that are not Arab states, that are outside the immediate ring around Israel, that they could help deflect some of the security challenges that Israel had.

They made a very nice relationship with Turkey and a very nice relationship. They tried and wanted to have a relationship with Iran.
And this was the door opener.

So when the earthquake happens, the Israeli government encourages a flow of water engineers into Iran to help fix the problems.

And that ends up being literally hundreds of water experts, advisors, economists, and such that I wouldn't say take over the Iranian water economy, but assist Iran working with people in Iran on how they can take their fairly primitive water systems, highly leaky water pipes, and illogical crops that they're planting because they're water consumptive and so forth, and rethink it all in a way that, like Israel had been doing for some number of decades at that point.

And this continues on in a rather remarkable way until the 1979 revolution. The Ayatollah Khomeini had always had it a policy that he would never accept any presence of Israelis in Iran.

Not Jews, but Israelis. And so as soon as the revolution came, all the Israelis fled.
They got out just days before the wall came crashing down.

Parenthetically and sadly, that the Iranian water engineers who had been trained by the Israelis were immediately in jeopardy. They were seen as hostile or spies or dangerous to the regime.

Several of them were executed, many, many of them exiled. It was a very scary time.
And then what happened was Iran no longer had the benefit of these really smart, very altruistic water engineers.

Now, Israel may have wanted them there for realpolitik, but the engineers were there to make a fairly backward water system, a progressive modern water system.

And once they left, over the next number of years, the system really started to fall apart and they never really recovered from it.

It's fair to say that, you know, water is a source of life, and therefore water is always highly political.

And sometimes, even as it is slow progressing, the political incentives are always not aligned with massive infrastructure as it relates to desalination.

I'll share a story. In 2008, Professor Uri Shani, who was the head of the desalination project in Israel.
And a close friend of mine. Exactly.

And presented us with four maps at the Bureau of the President of Israel ahead of a trip we had to meet President Mubarak.

A map of Egypt, a map of syria a map of iran as an extension and a map of spain and morocco and he said look these four regions if they don't act fast they risk political collapse and israel was at the tail end of doing those difficult things itself really tough bitter pills politically to swallow egypt didn't to your point we presented this to mubarak at the meeting in sharm al-sheikh in his palace and he said i will not have israeli technology in in egypt right

syria we do know what happened at the tail end. Iran, we're now finding out what happened in Spain at the time.

They have their own indigenous technology companies, but I think they also had a joint venture with one of the Israeli ones, is now desalinating pretty significantly to fight the desertification.

Can you share a bit about sort of why is it that countries that are not as corrupt as Iran or as Syria back in the day, you know, find it hard to undertake this political endeavor of dealing with water, increasing the price, creating desalination, and so on.

Politicians really do not like to ask things of their publics. They want to deliver things for their publics.

And so I can give loads of examples of this, but in a short summary sentence, water price increases, and technically the term is water tariffs, but water pricing increases. can never be popular.

They're seen as a tax. No one understands why water should be more expensive.
They look up at the sky, they see a cloud, it starts to rain. It's free.
And that water is the only water that is free.

To capture that water, to treat that water, to drink, to clean it, to put it into a supply chain, to bring it into your home or to your company, that obviously is highly expensive.

So what governments do all over the world, except for a very few, they subsidize it. Sometimes they subsidize it too much, but they subsidize it.

Or they'll maybe they'll charge just for the delivery part of it. People say, well, I pay for my water.
No, you don't. You pay for the delivery of your water.
You don't pay for all the rest of it.

Now, actually, it sometimes goes the other way.

Since you mentioned Syria, when Assad Bashar, the son, was going through a period with some unhappiness that ended up percolating into the civil war there, he decided that he was going to strengthen his hold on the farmer community.

So what does he do? At that time, world cotton prices were fairly high. So he encourages farmers to plant cotton.
Why is that insane? Cotton is the second most water consumptive crop of all crops.

And then he turns on the spigot basically and says, just pump away. So, what does he do? In a matter of just a handful of years, he depletes the water resources.

A drought hits the region, and there's just not enough water to be had.

And that really accelerates the Civil War because then all these farmers, rather than being supportive of the regime, end up killing their flocks or selling their flocks and closing their farms.

They move to shanty towns around Damascus and other cities like that. It became a real crisis.

What Israel has done is so rare, but so relevant and so important, especially in a world of growing population and with climate change creating water crises in many, many locations.

You're absolutely right. It's not just Iran that's facing this.
Iran is just the most recent of many states that is facing a zero-day kind of, we're going to be out of water crisis.

So, Seth, can you tell us more? Walk us through what Israel has gotten right? And I know there's both the, you know, as you mentioned, the kind of the tariffs and the water management overall.

There's also the innovation piece. And I want to get to all of that.
But give us, like, what are the key points that we need to know about what Israel's gotten right?

Well, if you want to summary in just in a single sentence, if you think back to your junior high school exams, they have adopted an all of the above strategy.

Some places, you know, as Yonatan referenced earlier, you know, that you talked about desalination.

Some places like Saudi Arabia, which is grossly overpumping the one and only aquifer that it has, the DC aquifer, but they are able to subsidize their water systems by adding lots of very expensive desalinated water.

So, in that situation, but Israel did not believe ever that a one-size-fits-all or a one-solution-fits everything outcome is going to happen.

So, first of all, starting as early as the 1930s, Israel starts thinking about what are they going to do? They're going to have, you know, all the Jews of the world moving to the land of Israel.

And so, they start putting their very best minds to work, some on defense, some on the economy, but significantly several on water issues.

The guy who co-founds the National Water Utility ends up becoming the third prime minister of Israel.

The guy who was the second of the three partners that founded that water utility ends up becoming a legendary finance minister, Sapincha Sapir.

So you have the emphasis being given to smart approach to water. So it starts even before the state happens.
But what has Israel done?

First of all, it has made water a high priority, and that's very significant. And that continues to this day.

Number two is that, as you you mentioned, they make very smart use of technology and they have all kinds of incentives to both utilities and to farmers to make use of that.

The other thing is they've used their culture.

Israel, although frequently it's reported on the news, are very fractured, you know, the ultra-Orthodox and the rest of society and, you know, the Sephardic Jews and Ashkenazi Jews, it's always played up.

But actually, Israel has quite a communitarian society where people pull together and think about how we can solve common problems.

And water is one of of the places where people are prepared to make sacrifices for the common benefit.

And that's part of a culture that, from leadership, from schools, from the army, from academia, from the media, they all share in the idea that we are in a dry region. We're a fast-growing population.

We're a fast-growing economy. And if we're going to survive and thrive, we have to think about our water all the time.
And then, as you mentioned a second ago, market forces.

Israel charges everybody the real price for water. And then, in terms of technology, I want to highlight two particular technologies, if I might.
First, as Yonatan had mentioned, desalination.

Israel's a world leader in that and the inventor of many of the best systems in the world.

But in addition, Israel from early as 1963 is talking about how can they make use of sewage water as a source for the country.

And so what they did was they created a parallel national water infrastructure system that takes nearly all of the water that's flushed down the toilets, toilets, goes down the sink, dishwashes, washing machines, and so forth.

It's captured. It's treated to a very high level.
You could actually drink it, but they know psychologically people won't want to drink it.

They created this parallel system to use that water for agriculture.

So instead of wasting lots of fresh water that could be used for nature, to be kept in aquifers or for municipal use, they're using the sewage water to grow the tomatoes, to grow the melons, to grow the peppers, and it keeps the system very alive.

One last thing I'll say about Israel, which is that they also believe in redundancies. So it's not like we're just going to build just enough for what we need.

They overlay many different types of water so that if it's a rainy season or a wet series of years, well, we'll make less use of this.

And if it's a dry season or two or three, that's fine because then we'll make more use of that.

I think an important piece in what you're describing right now is addressing also the financing model to the volatility, right?

This type of business and finance solutions to make sure that the big producers have, you know, access to global financing, not the World Bank, not the IMF, market terms, commercial banks, was, I think, a big part of this.

And I think the coolest bid in just the last few weeks.

is that this worked so well that about three weeks ago we started pouring desalinated water into the sea of galilee from the north how amazing is that how amazing is that nobody else in the world is even thinking about i mean maybe maybe some professor somewhere but for government to say, we're going to take our desalinated water and we're going to divert it for the sake of nature.

Everyone else is stripping the water out of nature. And here they're bringing the water to nature.
I knew this was coming. I've noticed for a few years, but it's so remarkable.

And by the way, I spoke to some Jordanian friends and some Christian Palestinian friends in the last few weeks.

They're hoping that this would, in turn, in a couple of years, allow for the Jordan River to regrow and for them to visit John the Baptist's site and everything and see it in its splendor from the biblical times.

Because right now, given that there isn't enough water and Jordan is also poor,

taking some of the water from the north part of the Jordan River, that would be really, really cool to see the Jordan River kind of lush again and the Dead Sea regaining some of its posture.

Yes, check, check, check. I agree, I agree.

We started off talking about Iran's hatred of Israel, kind of, you know, steering away from Israeli water engineers.

Yonatan, you brought up Egypt, not wanting to, you know, bring in Israeli both know-how and technologies.

You know, over the last few years, what has been Israel's ability, capacity to export this know-how and these technologies? And are we able to do that in the Middle East, in Europe, beyond?

Just give us a little bit of the state of the state. The degree to which Israeli water people are welcomed, even in hostile places, is something that I found remarkable while I was doing my research.

So as far as I know, there are no Israelis or Israeli technology in Iran and none in Libya.

But other than that, to greater or lesser degrees, basically everywhere else, I won't say their names because I don't want to get them in trouble in any way, but I know specifically of individuals of leadership of different water technology companies.

There are about 300 different water technology companies in Israel.

I know of more than a handful who I interviewed who told me that they went to, and I won't say the countries, but Gulf countries, North African countries, other Islamic countries that are far-flung in Africa and Asia and so forth, that they would go using an Israeli passport.

They couldn't enter normally, but they would make arrangements in advance. When they would arrive, they would be diverted off their flight.
They'd be taken to a special room.

Their passport would not be stamped, but they'd then be escorted to their hotel. They would do what they had to do for the next days or weeks, and then they would return home.

And China and Israel today have diplomatic relations. There's a direct link between Israel's water technology and those diplomatic relations.
China was facing severe water problems.

They knew about Israel's expertise. They secretly said to the Israelis, we would like you to come to China.
We'd need you to come in disguise.

We will provide you with alternative means of documentation. And whole bunches of Israeli technologists in the water sphere came to China, gave them advice.

In some cases, they were providing irrigation equipment, but they had to go to the expense of redoing it so that all the Hebrew printing on the packaging was removed.

And then when finally China was prepared to go public with the relationship, they don't immediately call for an ambassador. They say, let's exchange representatives.

And China requests of Israel a water expert. And so a very renowned Israeli water professor from the Technian

goes to China and he is the de facto ambassador of Israel for a few years until finally they decide to have a real ambassador. It's a remarkable story.

But there's, by my count, and I did count, there were 140 countries around the world that have welcomed Israeli water technology and water technologies.

And Israel, smartly, their foreign ministry also makes use of this as a device to encourage friendship and conversation. What role could this play?

You know, we're talking so much about AI and energy infrastructure as it pertains to Abraham Accords.

And do you see a future where water plays a significant role in trade, in partnership between Israel and the Gulf countries?

So I will answer your question, but I want to not lose this opportunity to talk about a remarkable invention out of Israel as well.

I have no doubt that water will and is playing a part in that conversation with the Gulf countries. Right now, Saudi Arabia has a lot of desalination.
Their desalination plants are inefficient.

They waste a very large amount of energy. And at some point, they're going to be redoing their desal.

And my guess is that they will be utilizing some of the Israelis that they're talking to now anyway.

And in terms of the other Gulf states that are doing desalination, just as Israel helped Iran at one point, they are helping them and they will help them more in the future.

The technology I wanted to talk about, and since Yonatan mentioned Professor Uri Shani, and I said he's a good friend of mine, Uri Shani, since you spoke to him last, he was the water commissioner of Israel.

He was the first water commissioner of Israel. He's an absolute fabulous guy and a genius in terms of water and irrigation and soil science.

He invented two remarkable inventions and developed a company around them, a company called NTRIP that I have been very excited by for quite a while because I think it's going to change the world.

And what NTRIP does is it takes a flood-irrigated field, 85% of all irrigation in the world is by flooding, and using the gravitational slope of that field, it reduces the use of water by about half while increasing the yields by as much as 35%.

So for the first many years of the company, what Uri's invention did was he worked with farmers in water scarce regions in Arizona and India and other parts of the world.

But then more recently, the idea came up of, well, wait a second, data centers, and that's what AI is all about, data centers have two ways of cooling themselves.

You either have to use electricity, which is air conditioning, or you can mist water. It's a heat transfer vehicle.

But the problem is when you're doing the water transfer, it's very water consumptive.

What his company, Andrew, has been doing, and for full disclosure, I'm an investor in the company and I have some advisory role in the company.

I'm an investor because I love the technology, not vice versa. And what it does is it allows the data center owners and operators to choose water cooling, which is 10% more efficient.

It saves tens of millions of dollars a year on electricity costs.

And then to partner with farmers in the same watershed by changing and turning their flood irrigated fields into NTRIP gravity-powered drip irrigation.

And so it's a partnership between agriculture, data center, and this company. And I've just been mesmerized by the outcome and the success of this thing.

But the idea of generating yield and crop out of the same square yard or the same square foot is where the challenge is.

Some of it is done through water, some of it is done through genetic engineering of the grain or of the vegetable.

And I think the holy grail and what you get in Israel is desalination, drip irrigation, or other irrigation techniques that are smart, and the RD centers that are designed to maximize yield for as least water possible.

If you have that, you're actually sometimes tripling a water drop or more, right? Because you're desalinating, then you're using less water to grow the crop, and then you're reusing the water.

So the efficiencies, listen to Seth, still 85 was the number, Seth.

85% of all irrigation in the world, 600 some odd million acres, uses flood irrigation, this single ancient and inefficient and unsustainable system.

So imagine the efficiency that humanity can gain if you operate on all four. The DNA, the desalination, the reuse, and the irrigation.
I mean, we are so inefficient as humanity at this point.

Although some countries, not just Israel, I think Netherlands is a great example, really mastered that. And there's a lot for the world to learn.
It's just so difficult politically.

But that goes back to the earlier conversation we were having about water pricing.

Politicians do not like to force things on their constituents in democracies, and they don't want to create a problem for themselves if they don't need one in autocracies.

Netherlands has a completely different framework, but not many societies are prepared to take the hard choices necessary to try to revise how agriculture is done.

But if you could do that, my goodness, we would be sort of in a period of almost messianic peace and love.

You know, you'd have adequate food, there'd be no hunger in the world, and we'd be in a completely different place for all of us.

Before we wrap here, I do want to ask, I'm curious to hear maybe from both of you, what's the cutting edge right now? Like I'm reading a lot and hearing a lot about cloud seeding.

Is Israel playing in that game? I read actually that Iran is starting to do this too.

It's been pretty controversial here in the United States for a variety of reasons, but curious to hear your thoughts on that, on, you know.

smart grid sensors, the role that AI can now play in water management and in innovation and kind of unlocking new innovation. So talk to me a little bit about what's up and coming on this front.

There's a long way to go for the fundamentals before we leap into the cutting edge, bleeding edge, and we saw clouds and so on.

There's one element that I really like is the use of drones, tactical drones, they've become very cheap.

And farmers who farm and irrigate across a big field, they take pictures, they analyze the pictures, they do thermal sensing.

I think that's a great tool for farmers right now that has gone three orders of magnitude below on pricing in the last decade. So to me, that's super exciting.

And beyond that, I think it's really the fundamentals. Get the fundamentals right.
For me, first of all, cloud seating was used as early as the 1950s. So, cloud seating is not a new idea.

For those you both may be too young, but when I was in college, Kurt Vonnegut was the author everybody wanted to read. Cloud seating was invented by Kurt Vonnegut's brother.
I did not know that. Wow.

A footnote to both literature and technology. I mean, there's lots to talk about when, you know, when you talk to a water nerd like me.
So, let me limit myself just to two topics. Okay.

First is sort of basic and smart. Lots of water is transported in opened canals.

And in other words, you either pump it out of the ground and put it in a canal, and it transports that way, or else there's surface water, like from a river, a Colorado River, and you build canals off of the river.

And those canals are open to the air. And because they're open to the air, that means that a lot of the water is lost to evaporation.

At the same time, that we're trying to increase the amount of solar energy. An idea that I have seen and that I like a lot is that you lay over the canals solar panels on little stilts.

And that way you lower significantly the amount of evaporation.

And at the same time, you generate solar energy, clean energy, that can be utilized in agricultural areas for all kinds of very good purposes, including all kinds of economic development.

That's the first. That's kind of low-tech-ish, but smart and more of a construction matter than it is a technology matter.

The second thing that I like a lot, and I think I have to not say the name of the company because it's been shared and I'm pretty sure I'm under an NDA on this, but I'll talk generically about it.

And that is the use of satellites. So, drones for sure are playing a role in agriculture.
Yonatan's exactly right. But there's a way now to use in-ground sensors, buried sensors.

By the way, this is technology out of Israel, invented in Israel, first tested in Israel, proved to work in Israel, and then marry those in-ground sensors that detect how much water is being used.

Does the crop need more? Does it it need less? Does it need more fertilizer, less fertilizer, and so forth?

And then to marry that to a rotating satellite system all over the world, which allows, whether it's governments or commodity traders or individual farmers, to have a sense of what's going on in the world of agriculture by crop, by acre, by country.

And imagine from a commodities point of view, how fabulous it would be to not have farmers have to guess what they're going to be selling their crops for at the end of the season.

Imagine it's how valuable it would be to know how robustly a crop is coming in.

Most farmers overwater, even smart progressive farmers overwater because there's no real price for overwatering, but there's a big price for underwatering.

So these satellites can communicate to farmers on their smartphones and tell them this specific square meter of your field needs more water.

or more fertilizer or more to the point more usually less water less fertilizer so that will save the farmer hugely on input costs of fertilizer.

And at the same time, it is a game changer in terms of how much water will be used, even in smart agriculture like classic trip irrigation or center pivot irrigation.

So I'm really excited about how we're going to start marrying satellites to in-ground sensors in the coming five, 10 years. It's going to be a different world of agriculture from this.

Well, Seth, we are so happy that you came and shared your water nerdiness with us. This is a fascinating conversation.

I do want to say real quick, and maybe we can include the link to your recent op-ed in the show notes. It is a really important read.

And not only because of Israel's role here, but because of what the people of Iran are facing, you know, water is what is more essential, right? What is more essential to life?

And it's a scary, scary situation. So let's hope someday for many, many different reasons, we see water engineers from Israel and Iran working together again.

I would not be surprised. Iranian society is on a knife's edge.
In the last 10 years, there's been like three or four major uprisings, popular uprisings.

This could be, I'm not saying it is, but this could be the final straw where people just say, we gave you everything and what have you done to us? You've ruined our environment.

As I say in my Abed, it's going to take decades to fix this problem now, even if they started tomorrow.

But this could actually be a transformational moment where governments start to say, we don't want to go down the route of Iran and where the Iranian people could say, we don't want this terrible regime over our heads anymore.

Thank you so much, Seth. Thank you, Seth.
Thank you so much for having me on a show that I love so much. Thank you.
Bye-bye.

See ya. Bye-bye.

Well, Yonatan, I thought Seth was fascinating. It's so elemental, literally and figuratively, everything we just discussed with him and your insights as well.

It's nice to have a reminder of like something that works and that has worked consistently. Look, to be honest, and I loved how Seth described himself as a water nerd.

Ultimately, it worked consistently because Israel made bold moves in 2005, six, and seven.

The easiest thing to do, as Seth described, in Iran, in Syria, in Turkey, and other countries in the region, is to subsidize water, not to take the subsidy off, and then not to take the risk.

of people not having access to water as you desalinate or as you implement tech solutions. It's always easier to say, well, next year is going to be a better year in terms of rainfall.

So why would we invest? And I think it's actually a tale of political courage as much as it is a tech story or an infrastructure story. All right.
So back to politics.

We began our show with the numbers of the week, and we're going to end with the words of the week.

And this time it's straight from the Netanyahu pardon plea, which has quite a few references related to the importance for Israeli economic growth, or at least trying to make the case for that.

And one of the most interesting ones is Article 79.

And here is what it says: These efforts, diplomatic, economic, security, educational, technological, and others, require the mobilization of all citizens of the state of Israel, and especially of the one standing at its head, the prime minister.

Strong words. Strong words.
You know, this really captures the spirit of the plea, right? It's time to move on. We have educational, diplomatic, and economic breakthroughs to make happen.

And for that, the prime minister needs to be relieved of the court case. I trust the Israeli system and its institutions.
And I think the next few weeks are going to be critical.

They're going to be critical economically for the way in which we start 2026. Well, I haven't checked the prediction markets like polymarket and others.
The polymarket. It's true.
I haven't also.

I'm curious to see if people are betting on this and what it says. But my bet would be on him getting pardoned.
That said, there are a lot of strong and valid feelings about this both ways.

So we'll leave it there.

Leave it there. All right.
That is it for today's show. Thank you for tuning into Arc Media's What's Your Number.
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What's Your Number is produced by Adam James Levina Reddy. Sound and video editing is by Martin Huergo.
Our theme music is by Midnight Generation, which I found out is very popular here in Mallorca.

We were in a taxi ride

listening to our theme music on the radio. No way.
But not the podcast. Not the podcast.
The taxi driver wasn't listening to the podcast.

All right. I'm Yona Tarad, you're here.
And I'm Michal of Ram. See you back here next week.
See you next week.

This podcast offers general business and economic information and is not a comprehensive summary for investment decisions. It does not recommend or solicit any investment strategy or security.