A view of a water canal running from the Euphrates river into the semi-desert region of eastern Syria November 11, 2010. The ancient Inezi tribe of Syria reared camels in the sandswept lands north of the Euphrates river from the time of the Prophet Mohammad. Now water shortages have consigned that way of life to distant memory. Drought in the past five years has also killed 85 percent of livestock in eastern Syria, the Inezis' ancestral land. Up to half a million people have left the region in one of Syria's largest internal migrations since France and Britain carved the country out of the Ottoman Empire in 1920. 
Picture taken November 11, 2010. REUTERS/ Khaled al-Hariri (SYRIA - Tags: AGRICULTURE ENVIRONMENT) - RTXUNXX
A view of a water canal running from the Euphrates river into the semi-desert region of eastern S Khaled Al Hariri / Reuters.

Nasa study shows alarming water loss in the Middle East



DOHA, Qatar // An amount of freshwater almost the size of the Dead Sea has been lost in parts of the Middle East due to poor management, increased demands for groundwater and the effects of a 2007 drought, according to a Nasa study.

The study, to be published tomorrow in Water Resources Research, a journal of the American Geophysical Union, examined data over seven years from 2003 from a pair of gravity-measuring satellites, which is a part of Nasa's Gravity Recovery and Climate Experiment.

Researchers found freshwater reserves in parts of Turkey, Syria, Iraq and Iran along the Tigris and Euphrates river basins had lost 144 cubic kilometres of its total stored freshwater, the second fastest loss of groundwater storage after India.

About 60 per cent of the loss resulted from pumping underground reservoirs for ground water, including 1,000 wells in Iraq, and another fifth was due to impacts of the drought including declining snow packs and soil drying up.

Loss of surface water from lakes and reservoirs accounted for about another fifth of the decline, the study found.

"This rate of water loss is among the largest liquid freshwater losses on the continents," the authors wrote in the study, noting the declines were most obvious after a drought.

The study is the latest evidence of a worsening water crisis in the Middle East, where demands from growing populations, war and the worsening effects of climate change are raising the prospect that some countries could face severe water shortages in the decades to come.

Some, like Yemen, blame their water woes on the semi-arid conditions and the grinding poverty, while the richer Arabian Gulf countries face water shortages mostly due to the fast pace of development and growth of their cities.

In a report released during the November UN climate talks in Qatar, the World Bank concluded that among the most critical problems in the Middle East and North Africa will be worsening water shortages.

The region already has the lowest amount of freshwater in the world. With climate change, droughts in the region are expected to turn more extreme. Water runoff is expected to decline by 10 per cent by 2050, while demand for water is expected to increase by 60 per cent by 2045.

One of the biggest challenges to improving water conservation is competing demands, which has worsened the problem in the Tigris and Euphrates river basins.

Turkey controls the Tigris and Euphrates headwaters, as well as the reservoirs and infrastructure of Turkey's Greater Anatolia Project, which dictates how much water flows downstream into Syria and Iraq, the researchers said.

There is no coordinated water management between the three countries, and tensions have intensified since the 2007 drought because Turkey continues to divert water to irrigate farmland.

"That decline in stream flow put a lot of pressure on northern Iraq," Kate Voss, lead author of the study and a water policy fellow with the University of California Centre for Hydrological Modeling in Irvine, said.

"Both the UN and anecdotal reports from area residents note that once stream flow declined, this northern region of Iraq had to switch to groundwater. In an already fragile social, economic and political environment, this did not help the situation."

Jay Famiglietti, principle investigator of the new study and a hydrologist and UC Irvine professor of Earth system science, plans to visit the region later this month, along with Ms Voss and two other UC Irvine colleagues, to discuss their findings and raise awareness of the problem and the need for a regional approach to solve the problem.

"They just do not have that much water to begin with, and they're in a part of the world that will be experiencing less rainfall with climate change," Mr Famiglietti said.

"Those dry areas are getting dryer. They and everyone else in the world's arid regions need to manage their available water resources as best they can."

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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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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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