The Middle East and North Africa is one of the most water-scarce regions of the world. Already plagued by a lack of freshwater resources, it also faces climate change, population growth and poor management, which threaten to affect the lives of millions.
The National’s correspondents across the region spoke to the people most affected to understand the extent of the issue and where hope for change may lie.
In the heart of Iraq’s southern parched desert, a verdant oasis rises like a mirage. But this is no illusion — it’s a thriving farm kept lush and green by the power of the sprinkler irrigation system.
“I consider the desert areas as the storehouse of food in the country due to the abundance of its groundwater and other ingredients,” said investor Wail Al Ghazali, 50.
“With the water stress that we are facing now, these areas could transform Iraq to a wheat exporter within two or three years with full support from the government."
Mr Al Ghazali knew the challenges that lay ahead when he poured his money into an agricultural project in the desert south of the city of Najaf two years ago, but he was determined to make a difference and create a successful business.
“To be honest, it is a risk to invest in the desert,” he said.
For decades, farmers in Iraq have relied on traditional irrigation systems, mainly flood irrigation — the flooding of a field with water to soak into the soil — for their crops. But such methods are inefficient, unsustainable and require significant amounts of water.
Only recently, some farmers began using more modern systems, such as drip and sprinkler irrigation, that can reduce the water required by up to 50 per cent through use of tubing, which improves crop yields and contributes to sustainable agricultural practice.
In July 2021, Mr Al Ghazali and his partners obtained an investment licence to develop 2,000 dunams (200 hectares) in Wadi Al Khir, about 60km south of Najaf city, to grow wheat.
He installed sprinkler irrigation across 1,200 dunams and a drip system that uses groundwater for another 400 dunams.
He has invested a total of 1.2bn Iraqi dinars ($800,000) so far. It is at least three times more than the estimated cost of growing wheat in an arable land with water readily available, he said.
“The cost of planting the desert is high for many reasons. Top of them is the absence of full government support in terms of offering loans, fuel and fertilisers,” said Mr Al Ghazali.
The government does provide incentives to encourage the use of more sustainable irrigation but still falls short of what is needed, he said.
For every sprinkler installed on a farm, the government supplies 1,200 litres of fuel per month to operate it. However, sprinklers actually require 5,000l.
Fertilisers provided by the government cover only 40 per cent of what the farmers need each month. Mr Al Ghazali said he depends on generators for consistent electricity.
During his first season 2021-2022, Mr Al Ghazali’s farm sustained losses of at least 300m Iraqi dinars ($200,000).
This year, he was forced to sell his car to buy fuel.
“I have to sell everything in my hand because I can’t see my crops fail and die,” he said.
Eventually, his hard work and sacrifice paid off. The current 2022-2023 season is promising, with each dunam is expected to produce between 1 and 1.6 tonnes of wheat.
Against all odds, rare success stories are emerging in agriculture sector in Iraq, the fifth most vulnerable country in the world to climate change according to the UN Environment Programme.
Climate change, mismanagement and conflict have contributed to the depletion of water resources, affecting agriculture and food security.
One of the most pressing issues is dwindling flows of the two main rivers, the Tigris and Euphrates, mainly as a result of upstream dams in Turkey and Iran, as well as poor water management.
The country is experiencing its worst drought in decades, with temperatures exceeding 50°C last summer. Many of Iraq’s lakes have also shrunk — in some cases revealing ancient cities previously thought to have been lost to the water.
Desertification affects 39 per cent of the country and 54 per cent of agricultural land has degraded, mainly due to soil salinity caused by historically low water levels in the two rivers and reduced rainfall.
UN reports show that the rate of desertification has risen to 39 per cent of the country’s land and more than half (54 per cent) is under threat.
With mounting environmental challenges threatening food supply in Iraq, entrepreneurs are searching for solutions to ensure a sustainable future.
Mohammed Al Rawi’s passion for agriculture led him to establish the first mushroom farming project in the northern province of Nineveh in 2021, joining forces with innovation hub and business incubator QAF Lab.
The project uses innovative and sustainable farming techniques that allow him to grow mushrooms in a climate-controlled environment, by applying cold water steam.
It depends on recycling organic waste to create a suitable growing environment for mushrooms.
“I noticed that Iraqis consume mushrooms in large quantities and almost all are imported from neighbouring countries such as Iran and Turkey,” said Mr Al Rawi, 25.
“Since we can get all the raw materials locally and the project can generate good revenue, I decided to start the project,” he said.
Today, the farm produces 40-50 tonnes of mushrooms per year.
“The situation in Iraq in regard to water scarcity and agriculture is bleak, but if there is real support from the government Iraq can compete with other countries,” Mr Al Rawi said.
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Dhadak 2
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Rating: 1/5
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Ballon d’Or Féminin (Women’s)
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Kopa Trophy (Best player under 21 – Men’s)
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Abandon
Sangeeta Bandyopadhyay
Translated by Arunava Sinha
Tilted Axis Press
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
Killing of Qassem Suleimani
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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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