Water levels of the Tigris and Euphrates rivers in Iraq — the headwaters of which originate in Turkey — have plunged 30 per cent in recent days, according to Iraq’s Ministry of Water Resources.
Iraq has long accused Turkey of holding back water in a network of giant dams, built between the 1970s and the present day. Since then, flows from both rivers have declined by about 40 per cent, cutting off a significant percentage of Iraq’s freshwater, although climate change has also been blamed for declines.
One of the largest of the dams on the Tigris, the Ilisu dam, can hold more than 10 billion cubic metres of water, while the river has an annual flow of around 27 billion cubic metres, although this varies dramatically in times of drought.
On the Euphrates, Turkey’s Attaturk dam has an even larger capacity of 27 billion cubic metres, approaching the volume of the river’s annual flow.
Turkey releases water through both dams, powering hydroelectric power stations, and claims the dams are important to preserve and regulate Iraq’s water supply, the majority of which comes from the two great rivers.
But critics of the dams point out the sharp drop in water flows from both rivers over the decades. Turkey also says Iraq’s dilapidated water infrastructure and wasteful flood irrigation for agriculture leads to unnecessary water losses, something the Iraqi government has acknowledged, while noting that Iraq is recovering from decades of conflict.
Iraq has also accused Iran of building dams on the tributaries of the Tigris, including vital rivers such as the Diyala river, which is dammed in Iran by the Daryan Dam, and the Lower Zaab river, which is dammed in Iran at Sardasht.
Images on social media taken in Nasiriyah in southern Iraq showed sections of the Tigris’ river bed visible in Dhi Qar province as well as in Maysan province, near Iran.
The water ministry blamed the situation in some southern provinces on “the low quantity of water reaching Iraq from neighbouring Turkey”.
“This has triggered a sharp drop in the country's water reserves,” it said in a statement.
Water ministry spokesman Khaled Chamal said on Sunday that Iraq was getting only 30 per cent of the water it expected from the Tigris and the Euphrates.
Authorities will increase levels by releasing water from Iraqi dams in the northern areas of Mosul, Dukan and Darbandikhan, he added, AFP reported on Sunday.
“There should be positive results within the next two days,” he said.
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.”
