Who will rebuild Gaza? | The National

As symbols for shattered sovereignty and political failure go, few beat the forlorn ruins of Gaza’s international airport. On its opening day on November 24, 1998, planes from Egypt, Morocco, Spain, Austria and the now-defunct Palestinian Airlines could be seen at Yasser Arafat International Airport, close to the border with Egypt. Along with plans for a major seaport, the air link was part of the Oslo agreements reached in 1993 that offered Palestinians even a limited taste of life free from Israeli occupation.

Fast forward to 2024 and the airport is still in ruins, having been bombed in 2001 by Israeli forces, who then went on to rip up its runway with bulldozers the following year. Work on the seaport began in July 2000 but ground to a halt amid a lack of construction materials and the turmoil of the Second Intifada that erupted later that year. Gaza remains without the infrastructure necessary to import goods by sea – an issue that has become painfully apparent amid the recent rush to build a floating pier off its shoreline that would allow emergency aid to be unloaded.

The lack of vital infrastructure is one of the reasons the Palestinian enclave has remained impoverished and dependent on aid for decades. This imposed helplessness has been exacerbated by Israel’s military response to Hamas’s October 7 attacks. At the start of February, the UNRWA – the UN agency for Palestinian refugees – said more than 70 per cent of civilian infrastructure, including homes, hospitals and schools, have been destroyed or severely damaged. While those who have died can never be replaced, and those orphaned or severely injured cannot be made whole, rebuilding infrastructure will take years of funding, planning and work.

But who will pay for all this? Those looking to the US will not be reassured, having seen its politicians feuding about whether to keep spending taxpayers’ money on supplying Ukraine – an American ally – with much-needed arms. Similarly, the EU has provided an enormous sum – €88 billion ($96.2 billion) and counting – in economic, humanitarian and military support for Ukraine since the 2022 invasion by Russia. Given their many spending commitments, persuading the West to invest heavily in Gazan reconstruction may prove difficult.

What of Israel? Fourteen years ago, the country paid the UNRWA $10.5 million for damage caused by its forces during the 2008-2009 Gaza War. According to a report from Gisha, an Israeli human rights NGO, this sum was barely enough to cover the estimated $10 million cost of the damage done to Gaza’s electricity network alone. Given the rhetoric coming from Israel’s current leadership, and despite the pragmatic sense it would make for Israeli security to have a functional and stable neighbour, it seems unlikely that funding to rebuild will come from this quarter.

Attention has turned to Arab states to potentially step in and pay for rebuilding Gaza. Despite many countries in the Arab world donating often and well to Palestinian relief efforts, these nations are wary of funding reconstruction for damage they did not cause and that could be bombed flat again at a moment’s notice.

More importantly, for Arab countries, funding is the not the key issue – the lack of a political process is. A clear programme that begins with a ceasefire and ends with the political solution that just about all parties recognise is the way out of the conflict is what’s needed. Where there is consensus, funds and action can follow effectively. In a recent interview with The National, GCC Secretary General Jasem Al Budaiwi recalled how, within days of Israel’s strikes on Gaza after Hamas’s attack on October 7, the bloc’s foreign ministers met in an extraordinary session and within 45 minutes had agreed on $100 million in humanitarian aid.

Reconstruction after a war is never easy. As well as funding and stability, much will also depend upon the role of the Palestinian leadership, which will have to be supported as it attempts to reassert itself as capable and representative.

But the rubble of Gaza’s airport tells us one thing: that better times are possible. The optimism of the Oslo years, and the tantalising glimpse of a Palestine that was open to the world should not be forgotten. While Norway’s Foreign Minister Espen Barth Eide concurred that ultimately the Oslo Accords led to “false promises”, he and other officials from around the world are trying to make those promises realities. The resolve of the Palestinian people should be enough inspiration for those with the patience and fortitude to rebuild when this war ends.

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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.”