The estimated cost of reconstruction following the 7.8 magnitude earthquake that hit Turkey and Syria on February 6, killing over 50,000 people, is more than $100 billion, the UN said on Tuesday.
The Turkish government estimates that more than 200,000 buildings were destroyed alongside critical infrastructure in a zone of devastation spanning 500km.
The new estimate is nearly three times that given by the World Bank a week ago, putting the reconstruction cost at $35 billion.
Louisa Vinton of the UN Development Programme said the Turkish government, with support from her organisation, the World Bank and the EU, had calculated a far higher cost of damage.
“Already it is clear that just the damages alone will amount to more than $100 billion,” she said via video link from Gaziantep in Turkey. Recovery costs will be on top of that, she added.
As many as 14 million people have been displaced or had their livelihoods severely disrupted by the earthquake.
Once completed, the estimate will be the basis for a recovery and reconstruction donor conference in Brussels next week, she said.
Recovery costs, including efforts to build improved and more environmentally sustainable infrastructure, “will obviously exceed that amount”, Ms Vinton said.
The UNDP was “very disappointed and saddened” by the response to funding appeals until now, she added.
A $1 billion flash appeal made on February 16 is currently at just 9.6 per cent of the total, she said.
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Tugay Tuncer said Turkey needs container cities to house earthquake survivors. Reuters -
Hasan Arslan and his daughter Zeynep, 14, in the container home where they live by a petrol station after being rescued from the rubble of their home in Nurdagi. Reuters -
Members of the Arslan family pray at dinner in one of the three container homes where they live. Reuters -
Mr Arslan, his wife Havva and children Saltuk and Fatmagul walk among what remains of their home, where they were trapped for five days until they were rescued. Reuters -
A woman sits in front of her tent inside a camp in the Iskenderun district of Hatay. EPA -
Children play at a playground in the Orhanli tent city following the deadly earthquake in Antakya, Hatay province. Reuters -
Earthquake survivors wait for breakfast in front of their tent inside a camp. EPA
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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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Unresolved crisis
Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.
Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.
The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
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In criminal cases, you can contact the police for additional support
