Wednesday’s 5.9-magnitude earthquake in Afghanistan has, along with aftershocks, killed more than 1,000 people, making it the deadliest event of its kind in the country in two decades.
Poor infrastructure and services made dealing with the tragedy particularly difficult for the country’s Taliban authorities, who have appealed for international assistance.
A few days before the earthquake in Afghanistan, the UAE experienced a much smaller event, a 2.4-magnitude quake in Sharjah.
As reported by The National, the June 18 quake — which officials said was not felt by residents — is the latest in a series of infrequent and mostly small tremors felt in the UAE.
So why is Afghanistan — along with neighbours such as Pakistan — vulnerable to deadlier earthquakes?
How are earthquakes classified and what damage can they cause?
A key measure is the magnitude of the quake, which reflects the size of the waves the event produces.
The Richter scale classifies quakes between 1.0 and 2.9 as “micro”, 3.0 to 3.9 as “minor”, 4.0 to 4.9 as “light”, 5.0 to 5.9 as “moderate”, 6.0 to 6.9 as “strong”, 7.0 to 7.9 as “major” and 8.0 and above as “great”.
Micro earthquakes, such as the kind the UAE experienced this month, occur more than 100,000 times a year and are typically detected by local instruments — but not people.
The Afghanistan earthquake was at the upper end of the moderate category and there are between about 200 and 2,000 such events each year.
These usually cause damage only to poorly constructed buildings, which helps to explain the devastation seen in Afghanistan, as many houses and other buildings in the country are not built to survive earthquakes.
“There’s no reinforcement. There’s not even any cement [in some buildings],” said Peter Styles, professor emeritus of applied and environmental geophysics at Keele University in the UK, who has seen first-hand the damage earthquakes have caused in countries such as Pakistan.
“Unfortunately, there’s very little we can do in terms of stopping these earthquakes. The buildings fall down and you build them up again.”
By contrast, in the Gulf, building codes are more stringent, Mr Styles said, so even if an earthquake of a high magnitude were to occur, the consequences would not be as severe.
“If you have sufficient money, you can withstand a magnitude six without problems,” Mr Styles said.
Why does Afghanistan suffer more severe earthquakes?
To understand why Afghanistan, and neighbouring Pakistan, are at risk of earthquakes, it is necessary to look to India.
The earth has more than a dozen major tectonic plates and the area around Afghanistan lies close to the border of three of them — the Arabian Plate, the Indian Plate and the Eurasian Plate. The Indian Plate is moving north and colliding with the Eurasian Plate.
“India is trying to move northwards,” Mr Styles said. “It’s shaped like a gigantic wedge; it’s forcing its way into Asia. That’s why we have the Himalayas, the Hindu Kush [mountain ranges].
“These earthquakes are on the main Himalayan fault. [Afghanistan and Pakistan] are on a major tectonic boundary.”
The area that was hit is part of the Alpide Belt, which stretches all the way to the Atlantic and is one of the most seismically active regions in the world.
By contrast, the UAE's location means it is not as vulnerable to movements of tectonic plates.
“The Arabian Plate is mostly being pushed sideways because of the opening of the Red Sea. That’s a slightly different process,” Mr Styles said.
“Arabia was joined to Africa, although in the last 30 million years, Arabia has slid northwards.”
Jordan, Palestine, Israel and Syria are more likely than the UAE to experience tremors because they lie close to the border of the Arabian Plate and the African Plate. Both are migrating northwards, but the movement of the Arabian Plate is faster.
The UAE and surrounding states are “not anywhere near as vulnerable as even the western part of Saudi Arabia", Mr Styles said.
“Arabia and the Gulf states are slightly protected because the whole block is moving northwards,” he added.
Iran, however, lies in the region where the Arabian Plate and the Eurasian Plate meet, putting it at risk of earthquakes. Like Afghanistan, it is on the Alpide Belt.
This month, Iran experienced a 5.9-magnitude quake, which was felt in the Emirates.
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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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