Syrian and Lebanese refugees travel to the Massna border crossing with Syria on foot after Israeli strikes rendered the main road unusable. EPA
Syrian and Lebanese refugees travel to the Massna border crossing with Syria on foot after Israeli strikes rendered the main road unusable. EPA
Syrian and Lebanese refugees travel to the Massna border crossing with Syria on foot after Israeli strikes rendered the main road unusable. EPA
Syrian and Lebanese refugees travel to the Massna border crossing with Syria on foot after Israeli strikes rendered the main road unusable. EPA


It's time to help Syria get back on its feet


  • English
  • Arabic

November 26, 2024

Israel’s months-long war in Lebanon has, among other things, displaced more than a million people in the country.

Official estimates suggest that since September, close to half a million of them have escaped to Syria. Many of these men, women and children were already refugees, having fled the Syrian civil war that began in 2011 to find safety in Lebanon.

Israel’s stated mission to degrade Hezbollah has also led to direct attacks inside Syria, where the Iran-backed group is allied to the government of President Bashar Al Assad. Towns in southern and south-western Syria, especially Al Qusayr and the surrounding countryside, have for more than a decade been Hezbollah domains. These areas have thus been the focus of Israeli strikes in the past week, as the one last Wednesday, in Palmyra, that killed 36 people and the one in the previous week where, Israeli air strikes hit the Syrian capital Damascus, killing 15 people.

But Syria’s challenges are not limited to Israel’s intensified air campaign and the influx of returning refugees. There has also been violence in Syria’s north-east, where Turkish forces hit targets linked to the Kurdistan Workers’ Party – a group that Ankara, the US and EU have listed as a terrorist organisation. There is an acute humanitarian crisis in a region devastated not only by the civil war but also by years of extreme drought exacerbated by climate change.

With the government in Damascus in control of just 70 per cent of Syria, it is ill-equipped to deal with the country’s multifarious and multidimensional crises. As of last year, more than 7 million people were internally displaced. While the civil war has been in suspended animation for years, this situation is untenable both politically as well as from a humanitarian standpoint – particularly as instability has increasingly put a strain on civilian populations in Syria and other countries in the neighbourhood.

The government is ill-equipped to deal with the country’s multifarious and multidimensional crises

On Sunday, UN special envoy for Syria Geir Pedersen was in Damascus to address the government’s resource shortages exacerbated by the recently returned refugees. “We need to see that the international community lives up to its responsibility and increases its funding to Syria in this very critical situation,” Mr Pedersen said.

With the world’s global and regional powers focused on the conflicts in Ukraine and the Levant, particularly at a time when violence has intensified in both regions in recent days, Syria’s humanitarian crisis risks being forgotten.

To be sure, efforts have been made over the past 18 months to return the country to the international fold. The Arab League admitted Damascus back years after suspending it over the government’s violent reaction to internal protests. Further, China pledged to help the Assad government reconstruct the war-torn country, with President Xi Jinping calling on western powers to lift sanctions that have only served to affect the humanitarian response.

The time has come for Syria to heal its wounds. As a first step, Syria’s rich social fabric needs to be repaired. The impetus must be on reviving the UN-facilitated peace process that seeks to reconcile the government and the many opposition groups with an aim to amend the current Constitution or adopt a new one. In turn, the international community needs to bolster the state’s ability to provide for its people, including the displaced and refugees, by increasing aid to it. The €5 million ($5.2 million) allocated by the EU this month is a step in that direction, but it is not nearly enough.

A stable Middle East relies in large part on putting a once-vibrant country, which has been broken for much of the past decade, back together.

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 26, 2024, 8:25 AM