RAMALLAH // Like many Gazans, Fadi Abu Shammala is preparing his family for a difficult winter.
The chronic power shortages plaguing this besieged Palestinian territory have worsened recently, sometimes leaving its 1.7 million residents, such as the Abu Shammalas, with less than six hours of electricity a day.
Fuel supplies have become scarcer as a result of an Israeli-imposed siege that has intensified since Egypt in June began systematically destroying most of the smuggling tunnels that have become Gaza’s lifeblood.
The shortage of diesel that is used to power generators has exacerbated the crisis while cooking oil, which is being used by taxi drivers as an alternative to petrol, is also in short supply.
“It’s so cold,” said Mr Abu Shammala, 29, a father of two young boys who works as a manager at a non-governmental organisation in Gaza City.
He recently spent Dh1,572 on a rechargeable battery to light his small apartment in Gaza City. But that has hardly helped. He and his family still spend much of their time huddling for warmth under layers of blankets, he said.
“I don’t know how much longer the people of Gaza can endure this situation,” he said.
Gaza needs about 400 megawatts of power a day for the lights to be on all the time, according to officials in the territory. The territory receives about 120 megawatts from Israel and 30 megawatts from Egypt every day, while diesel smuggled through the tunnels had been enough to produce another 85 megawatts a day. Gaza has at least power station but no current figures are available of its output.
Officials in the Hamas-run government of Gaza appear at a loss in terms of how to resolve the crisis, which worsened after the Muslim Brotherhood government in Egypt was removed from power in June. The fall of fellow Islamists in Cairo gave rise to a military-backed government that has punished Hamas and Gaza’s residents, in large part by destroying most of the tunnels that had sprung as a result of Israel’s blockade.
Until recently, they were a crucial artery for bringing into the territory such essentials as diesel fuel, petrol and cooking gas, as well as food and construction materials.
Israel imposed its blockade after Hamas, which officially calls for Israel’s destruction, took control of Gaza seven years ago.
Officials in the territory now warn that power may only be available to residents for less than six hours a day.
“It has become impossible for the electricity company to meet the minimum power needs of the population of the Gaza Strip,” Jamal Dardasawi, spokesman for Gaza’s electricity authority, was quoted as saying by the unofficial Palestinian news agency Maan.
Ghazi Hamad, deputy foreign minister for the Gaza government, said officials had appealed to Qatar for assistance. Discussions also are being held with Cairo, he said.
“We are sparing no effort to help our people exit the current crisis. We are speaking to every country and every party to find a solution,” Mr Hamad said.
In the meantime, frustrations are boiling over. The lack of power has forced employers to cut back expenses and lay off workers, causing unemployment to rise, residents and aid organisations say.
The fuels brought in from Israel, moreover, are often far more expensive to buy than the Egyptian-subsidised fuel that had arrived from the tunnels.
“No electricity. No power to heat the house when it pours with rain,” said Ahmed Hamid, who works as a taxi driver.
“We blame everyone. Leaders in Gaza, in the West Bank, even Obama. Whoever sees us and does nothing is responsible for our tragedy.”
Mr Abu Shammala also is angry. But that emotion comes second to the most important issue facing him right now — how to keep his family warm and fed.
“It’s like life stops when you don’t have electricity,” he said.
hnaylor@thenational.ae
* With additional reporting by Reuters
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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.”
