Food security and water use are linked



A rainy week may seem like the wrong time to worry about efficient use of water, but every resident of the UAE knows that wet weather is the exception in this dry country. Even in the rain, water security is always a vital issue.

Fortunately, water-saving techniques and technologies have been developed at an increasing pace in recent years, in response to the growing urgency of the issue. The UN's Food and Agriculture Organisation says the UAE's renewable water resources have dwindled by 42 per cent over the last 15 years.

As The National reported yesterday, real progress is being made in making farming more water-efficient. Every farm in the Western Region of Abu Dhabi is receiving new irrigation equipment, and farm workers are being trained to use it. Meanwhile, as another story reported yesterday, even more efficient high-tech solutions are being developed: Masdar Institute researchers are working on a super-absorbent material that could reduce water use per kilo of farm produce still further.

These are welcome developments, but they address just part of the country's food problem. The UAE imports fully 85 per cent of the food it consumes, and agriculture here will always be at a disadvantage compared with countries that have more rainfall, more temperate climates and more fertile soil.

For the UAE, then, sound food-security policy will always depend on factors beyond optimum water use. And sound water policy can be framed only by asking some hard questions about agriculture. We must choose our domestic crops, seed varieties and livestock prudently, measuring the cost and benefit of each drop of water without any preconceptions about the inherent desirability of a large farm sector.

On the food security side, our reliance on imports alarms many people, who see risks of sudden shortages in the event of supply disruptions. Some countries have become enthusiastic in recent years about buying farmland abroad; this may be commercially sound under normal conditions but in time of serious worldwide shortage, such farms could always be nationalised, or their produce barred from export.

A more robust solution to the problem begins with a stockpile of essential foods but can be centred on prudent diversification among many foreign suppliers. We must not get all our eggs from one basket.

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
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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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UAE currency: the story behind the money in your pockets
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The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat