Left to right: Turkish Foreign Minister Mevlut Cavusoglu, the EU's Ursula von der Leyen and Sweden's Prime Minister Ulf Kristersson at the donors' conference in Brussels. EPA
Left to right: Turkish Foreign Minister Mevlut Cavusoglu, the EU's Ursula von der Leyen and Sweden's Prime Minister Ulf Kristersson at the donors' conference in Brussels. EPA
Left to right: Turkish Foreign Minister Mevlut Cavusoglu, the EU's Ursula von der Leyen and Sweden's Prime Minister Ulf Kristersson at the donors' conference in Brussels. EPA
Left to right: Turkish Foreign Minister Mevlut Cavusoglu, the EU's Ursula von der Leyen and Sweden's Prime Minister Ulf Kristersson at the donors' conference in Brussels. EPA

EU and international donors pledge €7bn in post-quake aid for Turkey and Syria


Sunniva Rose
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  • Arabic

EU Commission President Ursula von der Leyen on Monday announced that the EU and the international community had pledged €7 billion ($7.5 billion) in post-earthquake aid for Turkey and Syria at the end of a day-long donor conference in Brussels.

“I think this is a very strong signal,” Ms von der Leyen told reporters.

This includes €6.05 billion in grants and loans for Turkey and €950 million in grants for Syria, according to a statement by the EU Commission. Pledges from the EU represented more than 50 per cent of the total.

The EU Commission alone, which co-hosted the donor conference with the Swedish presidency, pledged €1.1 billion for Turkey.

The EU's lending arm, the European Investment Bank, will also provide €500 million for Turkey, suspending an almost-total ban on financing for Turkey after a row over oil and gas drilling off Cyprus nearly four years ago.

The 7.8-magnitude February 6 earthquake and its aftershocks killed more than 48,000 in Turkey and close to 6,000 in neighbouring Syria.

The total cost of the damage incurred in Turkey is estimated at $103.6 billion — the equivalent to 9 per cent of the country's gross domestic product (GDP) — said vice-president of strategy and budget at the Turkish presidency, Kutluhan Taskin.

Speaking via video link, Turkish President Recep Tayyip Erdogan said international financial help was crucial for the country’s recovery.

“It’s impossible for any country regardless of its economic state to cope with a disaster of this scope alone,” he said. “Our real struggle starts now. We will reconstruct and revive all our cities destroyed in the earthquake.”

“The pledges made today will definitely contribute to our recovery and reconstruction efforts,” said Turkey's Foreign Affairs Minister Mevlüt Cavusoglu, who attended the conference.

Asked whether Turkey and Syria were normalising relations, Mr Cavusoglu said there was engagement between the two countries, not normalisation. Turkey backs rebel groups that control north-west Syria.

“We are planning a meeting at a foreign ministry level and the main purpose of all these meetings is to go in an engagement with the Syrian administration,” Mr Cavusoglu told reporters.

No Syrian government officials were present because the EU has no diplomatic relations with Damascus since the start of the 2011 civil war. The EU will not finance rebuilding efforts in the war-scarred country.

An EU official on Monday reaffirmed the bloc's stance that it would not reopen diplomatic channels with Syria or lift sanctions until a political end to the conflict was negotiated at a UN level.

The Syria Campaign in Brussels. Photo: The Syria Campaign
The Syria Campaign in Brussels. Photo: The Syria Campaign

Estimates of the aid needed for post-earthquake Syria vary between $7.9 billion — a World Bank assessment — and $14.8 billion — a UN assessment — said Mustafa Benlamlih, interim UN resident co-ordinator and humanitarian co-ordinator in Syria.

“The next 24 months are crucial. We need both life sustenance and early recovery,” he said.

While international rescue teams and aid flowed quickly to Turkey, humanitarian organisations faced major hurdles reaching stricken areas in northern Syria, which is still a war zone.

UN investigators last week called for an independent investigation into the failure of the international community, the UN and the Syrian government to help people in the region in the days following the earthquake.

Their criticism was echoed by human rights organisation The Syria Campaign, which set up a billboard on a lorry outside the building where the donor conference was held in Brussels that read: “Investigate UN Earthquake Aid Failures Now” and “The Failed Earthquake Response Cost Syrian Lives.”

“We’re asking why the UN, the EU and international donors missed the critical window to bring life-saving aid into Syria after the earthquake,” Rebecca Falcon, campaign manager at The Syrian Campaign, told The National. “It looks like a failure of decision-making.”

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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.

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“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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Updated: March 21, 2023, 10:41 AM