UAE will need new food production techniques to make up for lack of rainfall



ABU DHABI // With an average annual rainfall of 120 millimetres, new techniques for producing food with less water will have to be introduced in the UAE to cater for its growing population, experts have said.

According to a study by UAE University, new irrigation techniques such as surface and sprinkler have allowed the country to save around 60 per cent of water compared to the old applied methods, such as flood, furrow and aflaj.

“Water-intensive crop production has to cease,” said consultant Nicholas Lodge. “Only technologies for minimal water uses should be adopted and encouraged, as is the case in certain other arid countries.”

The FAO is also working with the Ministry of Environment and Water to ensure the security of water, food and energy.

“This includes protected agriculture,” said Ad Spijkers. “And the introduction of new generation greenhouses and other measures such as climate-smart agriculture, water-efficient crops and the use of treated wastewater for agriculture.”

The study also suggested looking at crops that can tolerate high temperatures to guarantee sustainability.

It mentioned using nuclear and solar energy as sustainable resources to power seawater desalination.

“Positive results of studies could open the doors for new significant resources for irrigating the green sector of the UAE,” it read.

Mr Lodge agreed.

“The UAE is blessed with significant capital reserves and ample solar energy,” he said. “These should be deployed carefully to create sustainable solutions.”

Mr Spijkers said that although the UAE was very food secure, security based solely on domestic production was impossible.

“Food security entails four dimensions,” he said. “Availability, which is production and trade; accessibility - physical and economic; use; nutritional and safe food – and stability of all these through time. The UAE is among the best-performing countries and it met [one of the] Millennium Development Goals of halving the proportion of hungry people and managed to maintain the undernourishment levels below five percent since 1990-1992.”

Mr Lodge said global trading and supply relationships remained important to provide multiple, secure and stable sources of commodities and raw materials.

cmalek@thenational.ae

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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