A man paddles his boat at the Chebayesh marsh, Dhi Qar province, Iraq, August 13. Reuters
A man paddles his boat at the Chebayesh marsh, Dhi Qar province, Iraq, August 13. Reuters
A man paddles his boat at the Chebayesh marsh, Dhi Qar province, Iraq, August 13. Reuters
A man paddles his boat at the Chebayesh marsh, Dhi Qar province, Iraq, August 13. Reuters


Why is it so hot in the Middle East?


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November 07, 2021

When in less than a fortnight Cop26 ends in Glasgow, and the diplomats and climate change experts go home having pledged to end deforestation in 10 years, their thoughts should also turn towards the Middle East, where global warming is occurring faster than the global average.

If last summer was an example, the region could become uninhabitable in the years to come. Temperatures in Kuwait this June reached 53.2°C, a figure unfathomable to some. Iran, Iraq and Oman also reported scorching temperatures.

Then there were blazing fires in forests or in resorts, such as in Turkey’s southern coast; terrible droughts; cities so hot that it was impossible for people to leave their homes. There is also another major worry – the naturally arid Middle East is not best equipped to cope with these fluctuations in temperature.

During a visit to Gaza last August, I noticed the stifling heat was far worse than on any other summer visit I have experienced over the past few decades. When I stepped outside my hotel, the sun was blistering. Car rides were sweltering. The refugee camps, where most of Gaza’s inhabitants live, were unbearable. The World Bank is predicting that for four months a year, the Middle East will face this kind of heat – and it will last for longer periods of time, making some areas uninhabitable.

Solar panels on the roof of buildings in the Al-Shati refugee camp area in Gaza City, Gaza, on October 8. Bloomberg
Solar panels on the roof of buildings in the Al-Shati refugee camp area in Gaza City, Gaza, on October 8. Bloomberg

It’s not too bad if you can afford air conditioning or live in a place where electricity and water are plentiful. But in places such as Gaza, that is next to impossible. Equally vulnerable are the camps and settlements for the millions of displaced people in northern Iraq or the refugees who fled the Syrian war and are still in Lebanon, Jordan, Turkey and Egypt. For the people most at risk, climate change is a tangible rather than an existential threat. It will become increasingly hard to live in some of these places.

Take Iraq as an example. The UN marks Iraq as one of the most vulnerable countries on the planet, where 31 per cent of the surface is desert. Years of inappropriate farming as well as water mismanagement have exacerbated an already dry climate. In areas such as the Nineveh Plain, an important breadbasket, many people rely on farming. Yet the results of climate change are, evident as they are, will be even more disastrous in years to come. It doesn’t help that the Islamic State deliberately damaged irrigation sources when they rolled through in 2014.

A boy shepherds camels near Al Karamah Dam in Shouneh, Jordan. Reuters
A boy shepherds camels near Al Karamah Dam in Shouneh, Jordan. Reuters

The World Bank also cites these kind of drastic temperature rises will cause severe damage to crops. Scare water sources will mean more uninhabitable places. It also means increased migration and the potential for more conflicts arising. Demographic growth puts further strain on resources.

Unicef gives some grim statistics on how population changes will put more strain on requirements for water and agricultural output. In Iraq, between 1970 and 2007, the population tripled to 30 million. What will access to water be like in the future? Already, 21 per cent of the population has no access to safe drinking water sources. A recent World Bank report cites: “With rainfall projected to decline by 20 to 40 per cent in a 2°C hotter world, and up to 60 per cent in a 4°C world, the region’s capacity to provide water to its people and economies will be harshly tested.”

Can all this lead to more conflict? The evidence points to a bleak future. Several climate change experts are looking at the links between climate change and future conflicts and how they can be prevented. Conflicts escalating because of water rights could rise around the globe, leading to post-apocalyptic sounding “water wars", where people will fight over water to survive. The Tigris-Euphrates as well as the Nile are both pinpointed crisis areas. And researchers have linked the Syrian conflict to the 2006-2009 drought made worse by climate change. It is one of the strongest links yet that between climate change and human conflict.

Ibrahim Dabale, 50, a native and art guardian, walks along a path on the hillsides as he guides visitors to the remote Abourma Rock Art site, on a rocky outcrop in the Tadjoura region of northern Djibouti. AFP
Ibrahim Dabale, 50, a native and art guardian, walks along a path on the hillsides as he guides visitors to the remote Abourma Rock Art site, on a rocky outcrop in the Tadjoura region of northern Djibouti. AFP

So what can be done? The World Bank advises that disaster risk assessments need to be established, and fast. After their 2008-2011 drought, Djibouti began carrying out world’s first Post-Disaster Needs Assessment. They set up more risk-management laboratories and knowledge centres, which teach people how to manage the crisis – as well as investing in protective infrastructure. Djibouti also rehabilitated the dyke that protected people from a flood-prone wadi. It has also performed seismic and floods risk/vulnerability assessments and established a flood early warning system.

These kind of centres should be established throughout the region, and the UN should help out, too – by expanding their Green Climate Fund to the more vulnerable parts of the Mena region, especially when it comes to water, agriculture and food scarcity.

The biggest worry for the Middle East is that climate change can make some governments less equipped to handle civil unrest. This may be true even for countries that are resource-rich but poorly governed, such as Libya. Over the past decade, militias have been fighting to control the oil infrastructure amid a raging civil war.

At one point, we assumed climate change would be too far in the future. We now know it is a matter of decades – and in the Middle East, we are already feeling the impact.

Policies adopted today – as a result of global gatherings such as Cop26 – can begin to reverse that. Let’s hope when the dust settles from the Glasgow conference, the Middle East will be a priority.

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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.”

Updated: November 07, 2021, 6:45 AM