Heatwaves continue to spark wildfires in Canada's western provinces, with Prime Minister Justin Trudeau calling for an emergency meeting of a Cabinet crisis group to address the matter. Bloomberg
Heatwaves continue to spark wildfires in Canada's western provinces, with Prime Minister Justin Trudeau calling for an emergency meeting of a Cabinet crisis group to address the matter. Bloomberg
Heatwaves continue to spark wildfires in Canada's western provinces, with Prime Minister Justin Trudeau calling for an emergency meeting of a Cabinet crisis group to address the matter. Bloomberg
Heatwaves continue to spark wildfires in Canada's western provinces, with Prime Minister Justin Trudeau calling for an emergency meeting of a Cabinet crisis group to address the matter. Bloomberg


Why climate change makes it imperative to rebuild weak states


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July 05, 2021

The village of Lytton in Canada set a national temperature record of 49.6ºC (121.2 degrees Fahrenheit) on Tuesday, then burnt to the ground in a forest fire the next day. When Canada is hotter than the Arabian Gulf, something is terribly wrong with the climate. But as a heat dome envelopes this region too, the vulnerability of fragile states to extreme weather is an increasing threat to all.

Areas in the Gulf and Jacobabad in Pakistan exceeded 35ºC in wet-bulb temperature, which measures the ability of the human body to cool itself by sweating. Combining the effects of heat and humidity, this weather would be deadly for vulnerable people and those working for prolonged periods outside.

The heat domes over the Middle East and North America are only two more in the increasing chain of extreme weather worldwide, straining energy provision and life support. Last year was a record hurricane season in the US, with three of the 30 named storms – Laura, Delta and Zeta – hitting oil complexes and power lines. Disastrous wildfires struck California, and electricity had to be shut off to avoid the risk of sparking further blazes.

In February, Texas was hit by the opposite problem as Arctic air broke south, bringing a big freeze that cut off gas, electricity and water supplies for days, killing 700 people. The power grid was minutes away from a total collapse that would have taken months to restore fully.

Only twice in recorded history have hurricanes passed through the Gulf of Mexico before mid-July. Now another, Elsa, is threatening the Caribbean.

Global heating already amounts to about 1ºC above pre-industrial levels. Under current national commitments, it will reach 2.8ºC by 2100, well above the Paris Agreement’s goal of no more than 1.5ºC above pre-industrial levels. The last time the Earth’s climate was like this, in the mid-Pliocene period, there was no Greenland ice cap and sea levels were 17 metres higher.

The Middle East is well-used to high temperatures and humidity. In the UAE and other well-prepared countries, most people are fortunate enough to escape with nothing more than high air-conditioning bills. But the consequences for weaker states are disastrous.

Electricity provision in Iraq collapsed on Friday. A grid which can deliver a (still inadequate) 18 gigawatts of power at best dropped to 0.4 gigawatts, also halting water supplies. Most immediately, this was the result of the heatwave, inadequate maintenance during the pandemic, a shut-off of Iranian gas and power imports, and apparent sabotage of transmission lines.

Electricity Minister Majid Hantoush, who was appointed more than a year ago, has now resigned via the ministry’s revolving door. In turn, Tehran has cut its supplies because of its own shortages and non-payment by Iraq due to problems caused by US banking sanctions.

Lebanon’s economic crisis and plummeting currency have also led to ever-worsening blackouts, as the state utility cannot pay its bills and diesel for private generators becomes scarce and unaffordable. Hospitals must ration electricity, and the provision of basic services such as using the internet or refrigeration is becoming impossible.

Iraq, Lebanon and also Libya, where electricity provision has been patchy, are suffering from the compound effects of years of political dysfunction and mismanagement. The technical solutions to their problems are well-known and straightforward enough. But their institutions are, in their various ways, unable to respond effectively.

These states are particularly weak and incapable. However, climate change and increasing incidences of extreme weather pose a threat across the wider region. Not only heatwaves but drought, shrinking rivers, drying lakes and rising sea-levels imperil people in Egypt, Syria, Yemen, Iran and Pakistan. Hotter weather means more air-conditioning for those who can afford it, more strain on electricity grids and, without transformation of the energy mix, more fossil fuel consumption.

The wealthier and more capable countries can cope with high temperatures but instability, economic turmoil, pandemics and refugees from their neighbours cannot be walled off.

The oil-exporters face a double challenge. Action on climate change will cut their oil and gas earnings in the long term, reducing their resources to adapt. At the same time, global climate policy will, hopefully, avoid the worst of global warming. However, the effects will still be severe and worsening. This is particularly acute for those states that have done little to move towards low-carbon economies and have failed build up their infrastructure and save for the future.

The dangers are worsened by the political confrontations and disputes across the region. Nevertheless, countries need to work together as far as possible to cope with climate change. They may not be able to rely on much help from an outside world itself battling concurrent emergencies.

Because of its centrality to air-conditioning, water provision, basic state functions and the future energy system, electricity is at the core of climate adaptation. The GCC has made moves to aid Iraq through an link, which is under construction, to its grid, and Masdar’s recent deal to expand solar power capacity by 2 gigawatts. Water and agriculture are the other main area, requiring a complex blend of international diplomacy and local solutions.

There is only so much that outsiders can do. The climate challenge makes it imperative to rebuild the region’s shattered states, bring armed non-state groups under control and develop efficient and less politicised civil services. That would be daunting enough, without deadly summers that will soon be commonplace.

Robin Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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%3Cp%3EAl%20Khayma%0D%3Cbr%3EBait%20Maryam%0D%3Cbr%3EBrasserie%20Boulud%0D%3Cbr%3EFi'lia%0D%3Cbr%3Efolly%0D%3Cbr%3EGoldfish%0D%3Cbr%3EIbn%20AlBahr%0D%3Cbr%3EIndya%20by%20Vineet%0D%3Cbr%3EKinoya%0D%3Cbr%3ENinive%0D%3Cbr%3EOrfali%20Bros%0D%3Cbr%3EReif%20Japanese%20Kushiyaki%0D%3Cbr%3EShabestan%0D%3Cbr%3ETeible%3C%2Fp%3E%0A
The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

UAE currency: the story behind the money in your pockets
The specs

  Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now

From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

COMPANY PROFILE

Name: Rain Management

Year started: 2017

Based: Bahrain

Employees: 100-120

Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund

The specs

Engine: 6.2-litre V8

Transmission: ten-speed

Power: 420bhp

Torque: 624Nm

Price: Dh325,125

On sale: Now

AUSTRALIA SQUAD

Aaron Finch, Matt Renshaw, Brendan Doggett, Michael Neser, Usman Khawaja, Shaun Marsh, Mitchell Marsh, Tim Paine (captain), Travis Head, Marnus Labuschagne, Nathan Lyon, Jon Holland, Ashton Agar, Mitchell Starc, Peter Siddle

The bio:

Favourite film:

Declan: It was The Commitments but now it’s Bohemian Rhapsody.

Heidi: The Long Kiss Goodnight.

Favourite holiday destination:

Declan: Las Vegas but I also love getting home to Ireland and seeing everyone back home.

Heidi: Australia but my dream destination would be to go to Cuba.

Favourite pastime:

Declan: I love brunching and socializing. Just basically having the craic.

Heidi: Paddleboarding and swimming.

Personal motto:

Declan: Take chances.

Heidi: Live, love, laugh and have no regrets.

 

The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

Hydrogen: Market potential

Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.

"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.

Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.

The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.

Classification of skills

A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation. 

A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.

The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000. 

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Updated: July 05, 2021, 3:30 AM