Tourists take photos of the water and light show at the Burj Khalifa. Satish Kumar / The National
Tourists take photos of the water and light show at the Burj Khalifa. Satish Kumar / The National

Water must be treated as the scarce, precious resource it is



Few of us think twice when we turn on our taps about where the water pouring forth comes from. Fewer still have entertained the prospect of a time when water is neither cheap nor ubiquitous. But today the Middle East is the least water-secure region on earth. To understand the real significance of water – aside from human and agricultural consumption – one has only to look at the lengths Israel has gone to in terms of limiting supply to Palestinian households and appropriating water sources to wield power. Among the 10 countries most likely to face a water crisis by 2040 are the UAE, Bahrain, Kuwait, Saudi Arabia and Oman. The UAE has one of the world's highest per capita water consumption levels and is predicted to run out of fresh water within 50 years. Top-down policies and precautionary measures might offset the problem but what is needed is a shift in public perception. Currently, water is viewed by too many as plentiful and dispensable rather than an essential and precious resource. Its usage in Abu Dhabi is currently rising by 9.5 per cent annually. It behoves us all to limit our personal consumption by taking measures such as having shorter showers and not leaving taps running to ensure this country never falls victim to acute water scarcity.

The UAE’s primary water sources are groundwater, desalinated water and treated wastewater. The former accounts for 51 per cent of the country's needs but the ancient aquifers that house it are rapidly emptying. Most groundwater is used for irrigation and landscaping, the burden of which could be reduced with less water-intensive crops. Meanwhile, about 37 per cent of the UAE's water is desalinated, a costly process with environmental implications. At this year's International Water Summit in Abu Dhabi, the government unveiled the world’s largest emergency reserve of desalinated water. At current national usage rates, its 26 billion litres would last less than five days.

Some shrewd action has been taken. In March, UAE Energy Minister Suhail Al Mazrouei told the Federal National Council that UAE water consumption is a "huge concern" and outlined plans to step up desalination projects and investigate new technological solutions. Yet if consumption continues to rise, these steps could prove limited. Water scarcity is one of many environmental challenges facing countries in this region and beyond. These pages have often discussed the scourge of plastic waste and the potentially drastic consequences of rising sea levels. Strategies to shift the UAE away from oil dependence, including the pursuit of renewable energy, will pay dividends. And when it comes to water security, the government has demonstrated a recognition of the problem. However, large-scale government initiatives must be accompanied by a sea change in the mindsets and behaviour of individuals to make a real difference.

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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.”

How Beautiful this world is!
German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

Countdown to Zero exhibition will show how disease can be beaten

Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a  month before Reaching the Last Mile.

Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.

 

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